UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
For
the quarterly period ended
For the transition period from to
Commission
file number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
High-Tech Zone Chengdu, | ||
(Address of principal executive offices) | (Zip Code) |
Registrant’s
telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: | Trading Symbol | Name of each exchange on which registered: | ||
The |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files).
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 ☐ |
Smaller reporting company | |
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 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b 2 of the Exchange Act). Yes ☐ No
As of February 10, 2025,
there were
TABLE OF CONTENTS
i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (the “Report”), including, without limitation, statements under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” includes 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”). These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “will,” “potential,” “projects,” “predicts,” “continues,” or “should,” or, in each case, their negative or other variations or comparable terminology. There can be no assurance that actual results will not materially differ from expectations. Such statements include, but are not limited to, any statements relating to our ability to consummate any acquisition or other business combination and any other statements that are not statements of current or historical facts. These statements are based on management’s current expectations, but actual results may differ materially due to various factors, including, but not limited to:
● | our goals and strategies, including our ability to maintain our automobile transaction and related 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; |
● | 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 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. |
You should read this Report and the documents that we refer to in this Report with the understanding that our actual future results may be materially different from and worse than what we expect. Other sections of this Report and our other reports filed with the Securities and Exchange Commission (the “SEC”) include additional factors which could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emerge from time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements.
You should not rely upon forward-looking statements as predictions of future events. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
This Report also contains statistical data and estimates that we obtained from industry publications and reports generated by third-parties. Although we have not independently verified the data, we believe that the publications and reports are reliable. The market data contained in this Report involves a number of assumptions, estimates and limitations. The ride-hailing and automobile financing markets in China may not grow at the rates projected by market data, or at all. The failure of these markets to grow at the projected rates may have a material adverse effect on our business and the market price of our common stock. If any one or more of the assumptions underlying the market data turns out to be incorrect, actual results may differ from the projections based on these assumptions. In addition, projections, assumptions and estimates of our future performance and the future performance of the industries in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described herein or our other reports filed with the SEC. You should not place undue reliance on these forward-looking statements.
ii
PART I – FINANCIAL INFORMATION
Item 1. Unaudited Condensed Consolidated Financial Statements
SENMIAO TECHNOLOGY LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in U.S. dollar, except for the number of shares)
December 31, | March 31, | |||||||
2024 | 2024 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | $ | ||||||
Restricted cash | ||||||||
Accounts receivable, net | ||||||||
Finance lease receivables, current | ||||||||
Prepayments, other receivables and other current assets, net | ||||||||
Prepayment - a related party | ||||||||
Due from related parties, net, current | ||||||||
Current assets - discontinued operations | ||||||||
Total current assets | ||||||||
Property and equipment, net | ||||||||
Property and equipment, net - discontinued operations | ||||||||
Total Property and equipment, net | ||||||||
Other assets | ||||||||
Operating lease right-of-use assets, net | ||||||||
Operating lease right-of-use assets, net, a related party | ||||||||
Financing lease right-of-use assets, net | ||||||||
Intangible assets, net | ||||||||
Finance lease receivable, non-current | ||||||||
Due from a related party, net, non-current | ||||||||
Other non-current assets | ||||||||
Other assets - discontinued operations | ||||||||
Total other assets | ||||||||
Total assets | $ | $ | ||||||
LIABILITIES, MEZZANNIE EQUITY AND EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | $ | ||||||
Advances from customers | ||||||||
Income tax payable | ||||||||
Accrued expenses and other liabilities | ||||||||
Due to related parties | ||||||||
Operating lease liabilities, current | ||||||||
Operating lease liabilities - a related party | ||||||||
Financing lease liabilities, current | ||||||||
Derivative liabilities | ||||||||
Current liabilities - discontinued operations | ||||||||
Total current liabilities | ||||||||
Other liabilities | ||||||||
Operating lease liabilities, non-current | ||||||||
Financing lease liabilities, non-current | ||||||||
Other liabilities - discontinued operations | ||||||||
Total other liabilities | ||||||||
Total liabilities | ||||||||
Commitments and contingencies (note 17) | ||||||||
Mezzanine Equity | ||||||||
Series A convertible preferred stock (par value $ | ||||||||
Stockholders' (deficit) equity | ||||||||
Common stock (par value $ | ||||||||
Additional paid-in capital | ||||||||
Accumulated deficit | ( | ) | ( | ) | ||||
Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
Total Senmiao Technology Limited stockholders' (deficit) equity | ( | ) | ||||||
Non-controlling interests | ||||||||
Total equity | ||||||||
Total liabilities, mezzanine equity and equity | $ | $ |
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements
1
SENMIAO TECHNOLOGY LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Expressed in U.S. dollar, except for the number of shares)
For the Three Months Ended December 31, | For the Nine Months Ended December 31, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
Revenues | ||||||||||||||||
Revenues | $ | $ | $ | $ | ||||||||||||
Revenues, a related party | ||||||||||||||||
Total revenues | ||||||||||||||||
Cost of revenues | ||||||||||||||||
Cost of revenues | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Cost of revenues, a related party | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Total cost of revenues | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Gross profit | ||||||||||||||||
Operating expenses | ||||||||||||||||
Selling, general and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Provision for credit losses | ( | ) | ( | ) | ( | ) | ||||||||||
Stock-based compensation | ( | ) | ( | ) | ||||||||||||
Total operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Other income (expense) | ||||||||||||||||
Other income, net | ||||||||||||||||
Interest expense | ( | ) | ||||||||||||||
Interest expense on finance leases | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Change in fair value of derivative liabilities | ||||||||||||||||
Total other income, net | ||||||||||||||||
Loss before income tax expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Income tax expense | ||||||||||||||||
Net loss from continuing operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Net loss from discontinued operations | ( | ) | ( | ) | ( | ) | ||||||||||
Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Net loss (income) attributable to non-controlling interests from operations | ( | ) | ( | ) | ||||||||||||
Net loss attributable to the Company's stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Other comprehensive income (loss) | ||||||||||||||||
Foreign currency translation adjustment | ( | ) | ( | ) | ( | ) | ||||||||||
Comprehensive loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
less: Total comprehensive income (loss) attributable to non-controlling interests | ( | ) | ( | ) | ||||||||||||
Total comprehensive loss attributable to stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Weighted average number of common stock | ||||||||||||||||
Basic and diluted | ||||||||||||||||
Net loss per share - basic and diluted | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Net loss per share - basic and diluted | ||||||||||||||||
Continuing operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Discontinued operations | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) |
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements
2
SENMIAO TECHNOLOGY LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Nine Months Ended December 31, 2024 and 2023
(Expressed in U.S. dollar, except for the number of shares)
For the Nine Months Ended December 31, 2023 | ||||||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||||||
Common stock | Additional paid-in | Accumulated | other comprehensive | Non-controlling | Total | |||||||||||||||||||||||
Shares | Par value | capital | deficit | loss | interest | equity | ||||||||||||||||||||||
BALANCE, March 31, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
Net income (loss) | — | ( | ) | ( | ) | |||||||||||||||||||||||
Conversion of preferred stock into common stock | ||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | ( | ) | ( | ) | |||||||||||||||||||||||
BALANCE, June 30, 2023 (Unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
Net loss | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Conversion of preferred stock into common stock | ||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
BALANCE, September 30, 2023 (Unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
Net income (loss) | — | ( | ) | ( | ) | |||||||||||||||||||||||
Issuance of common stock for consulting services | ||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | ( | ) | |||||||||||||||||||||||||
BALANCE, December 31, 2023 (Unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ |
For the Nine Months Ended December 31, 2024 | ||||||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||||||
Common stock | Additional paid-in | Accumulated | other comprehensive | Non-controlling | Total | |||||||||||||||||||||||
Shares | Par value | capital | deficit | loss | interest | equity | ||||||||||||||||||||||
BALANCE, March 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
Net loss | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Foreign currency translation adjustments | — | ( | ) | ( | ) | |||||||||||||||||||||||
BALANCE, June 30, 2024 (Unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
Net income (loss) | — | ( | ) | ( | ) | |||||||||||||||||||||||
Foreign currency translation adjustments | — | |||||||||||||||||||||||||||
BALANCE, September 30, 2024 (Unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
Net loss | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Foreign currency translation adjustment | — | ( | ) | ( | ) | |||||||||||||||||||||||
BALANCE, December 31, 2024 (Unaudited) | ( | ) | ( | ) |
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements
3
SENMIAO TECHNOLOGY LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in U.S. dollar, except for the number of shares)
For the Nine Months Ended December 31, | ||||||||
2024 | 2023 | |||||||
(Unaudited) | (Unaudited) | |||||||
Cash Flows from Operating Activities: | ||||||||
Net loss | $ | ( | ) | $ | ( | ) | ||
Net loss from discontinued operations | ( | ) | ( | ) | ||||
Net loss from continuing operations | ( | ) | ( | ) | ||||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Depreciation and amortization of property and equipment | ||||||||
Stock-based compensation | ||||||||
Amortization of right-of-use assets | ||||||||
Amortization of intangible assets | ||||||||
Provision for credit losses | ||||||||
Gain on disposal of equipment | ( | ) | ( | ) | ||||
Gain from deconsolidation | ( | ) | ||||||
Change in fair value of derivative liabilities | ( | ) | ( | ) | ||||
Loss from lease modification | ||||||||
Change in operating assets and liabilities | ||||||||
Accounts receivable | ( | ) | ||||||
Accounts receivable, a related party | ||||||||
Inventories | ||||||||
Finance lease receivables | ||||||||
Prepayments, other receivables and other assets | ||||||||
Prepayment - a related party | ( | ) | ||||||
Due from a related party | ||||||||
Accounts payable | ||||||||
Advances from customers | ( | ) | ( | ) | ||||
Accrued expenses and other liabilities | ||||||||
Due to a related party | ||||||||
Operating lease liabilities | ( | ) | ( | ) | ||||
Operating lease liabilities - related parties | ( | ) | ( | ) | ||||
Net Cash Provided by Operating Activities from Continuing Operations | ||||||||
Net Cash Used in Operating Activities from Discontinued Operations | ( | ) | ( | ) | ||||
Net Cash Provided by Operating Activities | ||||||||
Cash Flows from Investing Activities: | ||||||||
Purchases of property and equipment | ( | ) | ( | ) | ||||
Cash received from disposal of property and equipment | ||||||||
Loan to a related party | ( | ) | ||||||
Cash released upon disposal of subsidiaries | ( | ) | ||||||
Net Cash Used in Investing Activities from Continuing Operations | ( | ) | ( | ) | ||||
Net Cash Provided by Investing Activities from Discontinued Operations | ||||||||
Net Cash Used in Investing Activities | ( | ) | ( | ) | ||||
Cash Flows from Financing Activities: | ||||||||
Borrowings from a related party | ||||||||
Repayments from a related party | ||||||||
Repayment of current borrowings to a financial institution | ( | ) | ||||||
Repayments to related parties and affiliates | ( | ) | ||||||
Principal payments of finance lease liabilities | ( | ) | ( | ) | ||||
Net Cash (Used in) Provided by Financing Activities from Continuing Operations | ( | ) | ||||||
Net Cash (Used in) Provided by Financing Activities from Discontinued Operations | ( | ) | ||||||
Net Cash Used in Financing Activities | ( | ) | ( | ) | ||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | ( | ) | ||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | ( | ) | ||||||
Cash, cash equivalents and restricted cash, beginning of the period | ||||||||
Cash, cash equivalents and restricted cash, end of the period | ||||||||
Less: Cash and cash equivalents from discontinued operations | ( | ) | ||||||
Cash, Cash equivalents and Restricted Cash from continuing operations, end of Period | ||||||||
Supplemental Cash Flow Information | ||||||||
Cash paid for interest expense | $ | $ | ||||||
Cash paid for income tax | $ | $ | ||||||
Non-cash Transaction in Investing and Financing Activities | ||||||||
Recognition of right-of-use assets and lease liabilities, related parties | $ | $ | ||||||
Termination of right-of use assets and lease liabilities, related parties | $ | $ |
The following tables provides a reconciliation of cash, cash equivalent and restricted cash reported within the unaudited condensed consolidated balance sheets that sum to the total of the same amounts shown in the unaudited condensed consolidated statements of cash flows:
December 31, | December 31, | |||||||
2024 | 2023 | |||||||
(Unaudited) | (Unaudited) | |||||||
Cash and cash equivalent from continuing operations, end of the period | $ | $ | ||||||
Restricted cash from continuing operations, end of the period | $ | $ | ||||||
Cash and cash equivalent from discontinued operations, end of the period | $ | $ |
December 31, | December 31, | |||||||
2024 | 2023 | |||||||
(Unaudited) | (Unaudited) | |||||||
Cash and cash equivalent from continuing operations, beginning of the period | $ | $ | ||||||
Restricted cash from continuing operations, beginning of the period | $ | $ | ||||||
Cash and cash equivalent from discontinued operations, beginning of the period | $ | $ |
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements
4
SENMIAO TECHNOLOGY LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND PRINCIPAL ACTIVITIES
Senmiao
Technology Limited (the “Company”) is a U.S. holding company incorporated in the State of Nevada on
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. The Company also has been engaged in operating leasing services through Hunan Ruixi, Jiekai and its equity investee company, Jinkailong since March 2019. Jinkailong used to facilitate automobile sales and financing transactions for its clients, who are primarily ride-hailing drivers and provides them operating lease and relevant after-transaction services.
The
Company also used to operate online ride-hailing platform services through its own platform (known as Xixingtianxia) from October
2020 to August 2024, through Hunan Xixingtianxia Technology Co., Ltd., a PRC limited liability company (“XXTX”), which was
a wholly owned subsidiary of Sichuan Senmiao Zecheng Business Consulting Co., Ltd. (“Senmiao Consulting”), a PRC limited
liability company and wholly-owned subsidiary of the Company. The Company’s ride hailing platform enabled qualified ride-hailing
drivers to provide transportation services in several cities in China. On August 8, 2024, Senmiao Consulting entered into a certain Acquisition
Agreement with Debt Assumption Takeover (the “Acquisition Agreement”) with Jiangsu Yuelaiyuexing Technology Co., Ltd. (the
“Purchaser”), and other parties thereto, in connection with the acquisition (the “Acquisition”) by the Purchaser
of
The following diagram illustrates the Company’s corporate structure as of the filing date of these unaudited condensed 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
5
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 was 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. Starting from April 1, 2022, 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 has determined that
Jinkailong was deconsolidated from the Company’s Unaudited condensed consolidated financial statements effective as of March 31,
2022. However, as Hunan Ruixi still holds
As of December 31, 2024, the Company has outstanding
balance due from Jinkailong amounted to $
As
of December 31, 2024 and March 31, 2024, allowance for credit losses due from Jinkailong amounted to $
During
the three and nine months ended December 31, 2023, the Company recorded provision for credit losses against the balance due from Jinkailong
of
2. GOING CONCERN
In assessing the Company’s liquidity, the Company monitors and analyzes its cash on-hand and its operating and capital expenditure commitments. The Company’s liquidity needs are to meet its working capital requirements, operating expenses and capital expenditure obligations. Debt financing from financial institutions and equity financings have been utilized to finance the working capital requirements of the Company.
The
Company’s business is capital intensive. The Company’s management has considered whether there is substantial doubt about
its ability to continue as a going concern due to (1) the net loss of approximately $
Management has determined there is substantial doubt about its ability to continue as a going concern. If the Company is unable to generate significant revenue, the Company may be required to curtail or cease its operations. Management is trying to alleviate the going concern risk through the following sources:
● | Equity financing to support its working capital; |
● | Other available sources of financing (including debt) from PRC banks and other financial institutions; and |
● | Financial support and credit guarantee commitments from the Company’s related parties. |
6
There is no assurance that the Company will be successful in implementing the foregoing plans or that additional financing will be available to the Company on commercially reasonable terms, or at all. There are a number of factors that could potentially arise that could undermine the Company’s plans, such as (i) changes in the demand for the Company’s services, (ii) PRC government policies, (iii) economic conditions in China and worldwide, (iv) competitive pricing in the automobile transaction and related service and ride-hailing industries, (v) changes in the Company’s relationships with key business partners, (vi) the ability of financial institutions in China to provide continued financial support to the Company’s customers, and (vii) the perception of PRC-based companies in the U.S. capital markets. The Company’s inability to secure needed financing when required could require material changes to the Company’s business plans and could have a material adverse effect on the Company’s ability to continue as a going concern and results of operations. The unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of such uncertainties.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of presentation
The unaudited condensed consolidated financial statements, including the unaudited condensed consolidated balance sheets as of December 31, 2024, the unaudited condensed consolidated statements of operations and comprehensive loss, the unaudited condensed consolidated statements of changes in equity, and the unaudited condensed consolidated statements of cash flows for the nine months ended December 31, 2024 and 2023, as well as other information disclosed in the accompanying notes, have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and pursuant to the rules and regulations of the SEC and pursuant to Regulation S-X. The interim unaudited condensed consolidated financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and the notes thereto, included in the Form 10-K for the fiscal year ended March 31, 2024, which was filed with the SEC on June 27, 2024.
The interim unaudited condensed consolidated financial statements and the accompanying notes have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the results of operations for the periods presented. The consolidated results of operations for any interim period are not necessarily indicative of the results to be expected for the full year or for any other future years or interim periods.
(b) Foreign currency translation
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing on the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates on the date of the balance sheet. The resulting exchange differences are recorded in the statement of operations.
The reporting currency of the Company and its subsidiaries is U.S. dollars (“US$”) and the unaudited condensed consolidated financial statements have been expressed in US$. However, the Company maintains the books and records in its functional currency, Chinese Renminbi (“RMB”), being the functional currency of the economic environment in which its operations are conducted.
In general, for consolidation purposes, assets and liabilities of the Company and its subsidiaries whose functional currency is not the US$, are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of the Company and its subsidiaries are recorded as a separate component of accumulated other comprehensive loss within the unaudited condensed consolidated statements of changes in equity.
7
Translation of amounts from RMB into US$ has been made at the following exchange rates for the respective periods:
December 31, | March 31, | |||||||
2024 | 2024 | |||||||
Balance sheet items, except for equity accounts – RMB: US$1: |
For
the three months ended December 31, | ||||||||
2024 | 2023 | |||||||
Items in the statements of operations and comprehensive loss, and cash flows – RMB: US$1: |
For
the nine months ended December 31, | ||||||||
2024 | 2023 | |||||||
Items in the statements of operations and comprehensive loss, and cash flows – RMB: US$1: |
(c) Use of estimates
In presenting the unaudited condensed consolidated financial statements in accordance with U.S. GAAP, management makes estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. The Company bases its estimates on past experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Estimates are used when accounting for items and matters including, but not limited to, revenue recognition, residual values of property and equipment, lease liabilities, right-of-use assets, determinations of the useful lives and valuation of long-lived assets, estimates of allowances for credit losses for receivables and due from related parties, estimates of impairment of long-lived assets, and valuation of deferred tax assets.
(d) Fair values of financial instruments
Accounting Standards Codification (“ASC”) Topic 825, Financial Instruments (“Topic 825”) requires disclosure of fair value information of financial instruments, whether or not recognized in the balance sheets, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Topic 825 excludes certain financial instruments and all nonfinancial assets and liabilities from its disclosure requirements. Accordingly, the aggregate fair value amounts do not represent the underlying value of the Company. The three levels of valuation hierarchy are defined as follows:
Level 1 Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.
Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value.
8
The following table sets forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2024 and March 31, 2024:
Carrying Value as of | Fair Value Measurement as of | |||||||||||||||
December 31, | December 31, 2024 | |||||||||||||||
2024 | Level 1 | Level 2 | Level 3 | |||||||||||||
(Unaudited) | ||||||||||||||||
Derivative liabilities | $ | $ | $ | $ |
Carrying Value as of | Fair Value Measurement as of | |||||||||||||||
March 31, | March 31, 2024 | |||||||||||||||
2024 | Level 1 | Level 2 | Level 3 | |||||||||||||
Derivative liabilities | $ | $ | $ | $ |
The following is a reconciliation of the beginning and ending balance of the assets and liabilities measured at fair value on a recurring basis for the nine months ended December 31, 2024 and for the year ended March 31, 2024:
2019 Registered Direct Offering | August 2020 Underwritten Public | February 2021 Registered Direct | May
2021 Registered Direct Offering | November
2021 Private Placement | ||||||||||||||||||||||||||||||||
Series A Warrants | Placement Warrants | Offering Warrants | Offering Warrants | Investors Warrants | Placement Warrants | Investors Warrants | Placement Warrants | Total | ||||||||||||||||||||||||||||
BALANCE as of March 31, 2023 | $ | | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||
Change in fair value of derivative liabilities | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
Warrant forfeited due to expiration | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
BALANCE as of March 31, 2024 | ||||||||||||||||||||||||||||||||||||
Change in fair value of derivative liabilities | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
BALANCE as of December 31, 2024 (Unaudited) | $ | $ | $ | $ | $ | $ | $ | $ | $ |
The August 2020 Underwriters’ Warrants, the February 2021 Placement Agent Warrants, the February 2021 ROFR Warrants, the May 2021 Investors Warrants, the May 2021 Placement Agent Warrants, and the November 2021 Investors Warrants and November 2021 Placement Agent Warrants (all discussed below) are not traded in an active securities market; therefore, the Company estimates the fair value to those warrants using the Black-Scholes valuation model as of December 31, 2024 and March 31, 2024.
9
As of December 31, 2024 | ||||||||||||||||||||||||||||
August 4, 2020 | February 10, 2021 | May 13, 2021 | November 10, 2021 | |||||||||||||||||||||||||
Placement | Placement | Placement | ||||||||||||||||||||||||||
Underwriters’ | Agent | ROFR | Investor | Agent | Investor | Agent | ||||||||||||||||||||||
Granted Date | Warrants | Warrants | Warrants | Warrants | Warrants | Warrants | Warrants | |||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||||
# of shares exercisable | ||||||||||||||||||||||||||||
Valuation date | ||||||||||||||||||||||||||||
Exercise price | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Stock price | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Expected term (years) | ||||||||||||||||||||||||||||
Risk-free interest rate | % | % | % | % | % | % | % | |||||||||||||||||||||
Expected volatility | % | % | % | % | % | % | % |
As of March 31, 2024 | ||||||||||||||||||||||||||||
August 4, 2020 | February 10, 2021 | May 13, 2021 | November 10, 2021 | |||||||||||||||||||||||||
Placement | Placement | Placement | ||||||||||||||||||||||||||
Underwriters’ | Agent | ROFR | Investor | Agent | Investor | Agent | ||||||||||||||||||||||
Granted Date | Warrants | Warrants | Warrants | Warrants | Warrants | Warrants | Warrants | |||||||||||||||||||||
# of shares exercisable | ||||||||||||||||||||||||||||
Valuation date | ||||||||||||||||||||||||||||
Exercise price | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Stock price | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Expected term (years) | ||||||||||||||||||||||||||||
Risk-free interest rate | % | % | % | % | % | % | % | |||||||||||||||||||||
Expected volatility | % | % | % | % | % | % | % |
* | Giving retroactive effect to the |
10
As of December 31, 2024 and March 31, 2024, financial instruments of the Company comprised primarily current assets and current liabilities including cash and cash equivalents, restricted cash, accounts receivable, finance lease receivables, prepayments, other receivables and other assets, due from related parties, accounts payable, advance from customers, lease liabilities, accrued expenses and other liabilities, due to related parties, and operating and financing lease liabilities, which approximate their fair values because of the short-term nature of these instruments, and current liabilities of borrowings from a financial institution, which approximate their fair values because of the stated loan interest rate to the rate charged by similar financial institutions.
The non-current portion of finance lease receivables, operating and financing lease liabilities were recorded at the gross amount adjusted for the interest using the effective interest rate method. The Company believes that the effective interest rates underlying these instruments approximate their fair values because the Company used its incremental borrowing rate to recognize the present value of these instruments as of December 31, 2024 and March 31, 2024.
Other than as listed above, the Company did not identify any assets or liabilities that are required to be presented on the balance sheet at fair value.
(e) Segment reporting
Operating
segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (the “CODM”),
which is comprised of certain members of the Company’s management team. During the years ended March 31, 2019 and 2021, the Company
acquired Hunan Ruixi and XXTX, respectively, and disposed XXTX in August 2024. The Company evaluated how the CODM manages the businesses
of the Company to maximize efficiency in allocating resources and assessing performance. The Company has
(f) Cash and cash equivalents
Cash and cash equivalents primarily consist of bank deposits with original maturities of three months or less, which are unrestricted as to withdrawal and use. Cash and cash equivalents also consist of funds received from automobile purchasers as payments for automobiles, funds received from automobile lessees as payments for rentals, which were held at the third-party platforms’ fund accounts and which are unrestricted and immediately available for withdrawal and use.
(g) Accounts receivable, net
Accounts
receivable are recorded at the invoiced amount less an allowance for any uncollectible accounts and do not bear interest, and are due
on demand. The carrying value of accounts receivable is reduced by an allowance that reflects the Company’s best estimate of the
amounts that will not be collected. An allowance for credit losses is recorded in the period when a loss is probable based on an assessment
of specific evidence indicating collection is unlikely, historical bad debt rates, accounts aging, financial conditions of the customer
and industry trends. Starting from April 1, 2023, the Company adopted ASU No.2016-13 “Financial Instruments – Credit Losses
(Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASC Topic 326”). Management also periodically
evaluates individual customer’s financial condition, credit history, and the current economic conditions to make adjustments in
the allowance when it is considered necessary. Account balances are charged off against the allowance after all means of collection have
been exhausted and the potential for recovery is considered remote. The Company’s management continues to evaluate the reasonableness
of the valuation allowance policy and update it if necessary. As of December 31, 2024 and March 31, 2024,
the Company record allowance for credit losses of $
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(h) Finance lease receivables
Finance lease receivables, which result from sales-type leases, are measured at discounted present value of (i) future minimum lease payments, (ii) any residual value not subject to a bargain purchase option as finance lease receivables on its balance sheet and (iii) accrued interest on the balance of the finance lease receivables based on the interest rate inherent in the applicable lease over the term of the lease. Management also periodically evaluates individual customer’s financial condition, credit history and the current economic conditions to make adjustments in the allowance for credit losses when necessary. Finance lease receivables is charged off against the allowance for credit losses after all means of collection have been exhausted and the potential for recovery is considered remote. As of December 31, 2024 and March 31, 2024, the Company determined allowance for credit losses was necessary for finance lease receivables.
As of December 31, 2024 and March 31, 2024, finance lease receivables consisted of the following:
December 31, | March 31, | |||||||
2024 | 2024 | |||||||
(Unaudited) | ||||||||
Minimum lease payments receivable | $ | $ | ||||||
Less: Unearned interest | ( | ) | ( | ) | ||||
Financing lease receivables | $ | $ | ||||||
Finance lease receivables, current | $ | $ | ||||||
Finance lease receivables, non-current | $ | $ |
Future scheduled minimum lease payments for investments in sales-type leases as of December 31, 2024 are as follows:
Minimum future payments receivable | ||||
Twelve months ending December 31, 2025 | $ | |||
Twelve months ending December 31, 2026 | ||||
Twelve months ending December 31, 2027 | ||||
Total | $ |
(i) Property and equipment, net
Property
and equipment primarily consist of leasehold improvements, computer equipment, office equipment, fixtures and furniture and automobiles,
which are stated at cost less accumulated depreciation and amortization less any provision required for impairment in value. Depreciation
and amortization is computed using the straight-line method with no residual value based on the estimated useful life.
Categories | Useful life | |
Leasehold improvements | ||
Computer equipment | ||
Office equipment, fixture and furniture | ||
Automobiles |
The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An asset is considered impaired if its carrying amount exceeds the future net undiscounted cash flows that the asset is expected to generate. If such asset is considered to be impaired, the impairment recognized is the amount by which the carrying amount of the asset, if any, exceeds its fair value determined using a discounted cash flow model. For the three and nine months ended December 31, 2024 and 2023, the Company did not recognize impairment for property and equipment.
Costs of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The cost and related accumulated depreciation and amortization of assets disposed of or retired are removed from the accounts, and any resulting gain or loss is reflected in the unaudited condensed consolidated statements of operations and comprehensive loss.
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(j) Loss per share
Basic loss per share is computed by dividing net loss attributable to stockholders by the weighted average number of outstanding shares of common stock, adjusted for outstanding shares of common stock that are subject to repurchase.
For the calculation of diluted loss per share, net loss attributable to stockholders for basic loss per share is adjusted by the effect of dilutive securities, including share-based awards, under the treasury stock method and convertible securities under the if-converted method. Potentially dilutive securities, of which the amounts are insignificant, have been excluded from the computation of diluted net loss per share if their inclusion is anti-dilutive.
As
of December 31, 2024, the Company’s dilutive securities from the outstanding series A convertible preferred stock are convertible
into
(k) Derivative liabilities
A contract is designated as an asset or a liability and is carried at fair value on the Company’s balance sheet, with any changes in fair value recorded in the Company’s results of operations. The Company then determines which options, warrants and embedded features require liability accounting and records the fair value as a derivative liability. The changes in the values of these instruments are shown in the unaudited condensed consolidated statements of operations and comprehensive loss as “change in fair value of derivative liabilities”.
(l) Revenue recognition
The Company recognized its revenue under Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (ASC 606). ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. It also requires the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer.
To achieve that core principle, the Company applies the five steps defined under ASC 606: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation.
The Company accounts for a contract with a customer when the contract is entered into by the parties, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration to collect is substantially probable.
13
Disaggregated information of revenues by business lines are as follows:
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
Automobile Transaction and Related Services | ||||||||||||||||
- Operating lease revenues from automobile rentals | $ | $ | $ | $ | ||||||||||||
- Service fees from NEVs leasing | ||||||||||||||||
- Monthly services commissions | ||||||||||||||||
- Financing revenues | ||||||||||||||||
- Service fees from automobile purchase services | ||||||||||||||||
- Other revenues | ||||||||||||||||
Total Revenues | $ | $ | $ | $ |
Automobile transaction and related services
Operating lease revenues from automobile rentals –The Company generates revenue from sub-leasing automobiles to some online ride-hailing drivers or third-parties and leasing its own automobiles. The Company recognizes revenue wherein an automobile is transferred to the lessees and the lessees has the ability to control the asset, is accounted for under ASC Topic 842. Rental transactions are satisfied over the rental period and is recognized over time. As the operating lease revenue are variable in nature which is based on online ride-hailing drivers or third-parties’ performance for a certain period, the Company recognized the revenue from operating lease by using the output method based on periodic settlement between the Company and the online ride-hailing drivers or third-parties when such revenue is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Rental periods are short term in nature, generally are twelve months or less.
Service fees from NEVs leasing and automobile purchase services - Services fees from NEVs leasing are paid by some lessees who rent new energy electric vehicles from the Company, which based on the product solutions.
Automobile purchase services are paid by automobile purchasers 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, which is based on the sales price of the automobiles and relevant services provided.
Monthly services commissions – Commissions from the services generated from the management and related services provided to Partner Platforms and other companies, which are settled on a monthly basis. The Company recognizes revenues at a point in time when performance obligations are completed and the commission amount is confirmed by the Partner Platforms and other companies, based on their evaluations on the services provided by the Company.
Financing revenues – Interest income from the lease arising from the Company’s sales-type leases and bundled lease arrangements are recognized as financing revenues over the lease term based on the effective rate of interest in the lease.
The Company recognizes those revenues at a point in time when above mentioned services are completed, and corresponding an automobile is delivered to the lessee or purchaser. Accounts receivable related to the revenue from NEVs leasing and automobile purchase services is collected upon the automobiles are delivered to lessees or purchaser.
Other revenues – The Company generated other revenues such as miscellaneous service fees charged to its customers for some supporting services provided to online ride-hailing drivers and sales of automobiles. The Company recognizes revenues at a point in time when performance obligations are completed and the collectability is probable from the customers.
14
Leases - Lessor
The
Company recognized revenue as lessor in accordance with ASC 842. The two primary accounting provisions the Company uses to classify transactions
as sales-type or operating leases are: (i) a review of the lease term to determine if it is for the major part of the economic life of
the underlying equipment (defined as greater than
The Company excludes from the measurement of its lease revenues any tax assessed by a governmental authority that is both imposed on and concurrent with a specific revenue-producing transaction and collected from a customer.
The Company considers the economic life of most of the automobiles to be to years, since this represents the most common long-term lease term for its automobiles and the automobiles will be used for online ride-hailing services. The Company believes three to years is representative of the period during which an automobile is expected to be economically usable, with normal service, for the purpose for which it is intended.
The
Company’s lease pricing interest rates, which are used in determining customer payments in a bundled lease arrangement, are developed
based upon the local prevailing rates in the marketplace where its customer will be able to obtain an automobile loan under similar terms
from the bank. The Company reassesses its pricing interest rates quarterly based on changes in the local prevailing rates in the marketplace.
As of December 31, 2024, the Company’s pricing interest rate was
(m) Discontinued operations
A discontinued operation may include a component of an entity or a group of components of an entity, or a business or nonprofit activity. A disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operation if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when any of the following occurs: (1) the component of an entity or group of components of an entity meets the criteria to be classified as held for sale; (2) the component of an entity or group of components of an entity is disposed of by sale; (3) the component of an entity or group of components of an entity is disposed of other than by sale (for example, by abandonment or in a distribution to owners in a spinoff).
(n) Significant risks and uncertainties
1) | Credit risk |
a. | Assets that potentially subject the Company to significant concentration of credit risk primarily consist of cash and cash equivalents. The maximum exposure of these assets to credit risk is their carrying amounts as of the balance sheet dates. As of December 31, 2024 and March 31, 2024, approximately $ |
The Company’s operations are carried out entirely in mainland China. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the social, political, economic and legal environments in the PRC as well as by the general state of the PRC economy. In addition, the Company’s business may be influenced by changes in PRC government laws, rules and policies with respect to, among other matters, anti-inflationary measures, currency conversion and remittance of currency outside of China, rates and methods of taxation and other factors.
15
b. | In measuring the credit risk of accounts receivable due from the automobile purchasers (the “customers”), the Company mainly reflects the “probability of default” by the customer on its contractual obligations and considers the current financial position of the customer and the risk exposures to the customer and its likely future development. |
Historically,
most of the automobile purchasers would pay the Company their previously defaulted amounts within one to three months. As a result, the
Company would provide full provisions on accounts receivable if the customers default on repayments for over three and nine months. As
of December 31, 2024 and March 31, 2024, the Company record allowance for credit losses of $
2) | Foreign currency risk |
As
of December 31, 2024 and March 31, 2024 substantially all of the Company’s operating activities and major assets and liabilities,
except for the cash deposit of approximately $
(o) Comparability and reclassification adjustments
The Company has reclassified certain comparative balances in the consolidated balance sheets as of March 31, 2024 and certain comparative amounts in the unaudited condensed consolidated statements of operations and comprehensive loss for the three and nine months ended December 31, 2023 to conform to the current period’s presentation. The assets and liabilities of the discontinued operations have been classified as current assets of discontinued operations, property and equipment, net of discontinued operations, other assets of discontinued operations, current liabilities of discontinued operations, and other liabilities of discontinued operations in the consolidated balance sheets as of March 31, 2024. The results of discontinued operations for the three and nine months ended December 31, 2023 have been reflected separately in the unaudited condensed consolidated statements of operations and comprehensive loss as a single line item for all periods presented in accordance with U.S. GAAP. Cash flows from discontinued operations of the three categories for the nine months ended December 31, 2023 were separately presented in the unaudited condensed consolidated statements of cash flows for all periods presented in accordance with U.S. GAAP.
(p) Recent accounting pronouncements not yet adopted
The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.
16
In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements — codification amendments in response to SEC’s disclosure Update and Simplification initiative which amend the disclosure or presentation requirements of codification subtopic 230-10 Statement of Cash Flows—Overall, 250-10 Accounting Changes and Error Corrections— Overall, 260-10 Earnings Per Share— Overall, 270-10 Interim Reporting— Overall, 440-10 Commitments—Overall, 470-10 Debt—Overall, 505-10 Equity—Overall, 815-10 Derivatives and Hedging—Overall, 860-30 Transfers and Servicing—Secured Borrowing and Collateral, 932-235 Extractive Activities— Oil and Gas—Notes to Financial Statements, 946-20 Financial Services— Investment Companies— Investment Company Activities, and 974-10 Real Estate—Real Estate Investment Trusts—Overall. The amendments represent changes to clarify or improve disclosure and presentation requirements of above subtopics. Many of the amendments allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the SEC’s requirements. Also, the amendments align the requirements in the Codification with the SEC’s regulations. For entities subject to existing SEC disclosure requirements or those that must provide financial statements to the SEC for securities purposes without contractual transfer restrictions, the effective date aligns with the date when the SEC removes the related disclosure from Regulation S-X or Regulation S-K. Early adoption is not allowed. For all other entities, the amendments will be effective two years later from the date of the SEC’s removal. The Company is currently evaluating the impact of the update on the Company’s unaudited condensed consolidated financial statements and related disclosures.
In November 2023, the FASB issued ASU 2023-07, which is an update to Topic 280, Segment Reporting: Improvements to reportable Segment Disclosures (“ASU 2023-07”), which enhances the disclosure required for reportable segments in annual and interim consolidated financial statements, including additional, more detailed information about a reportable segment’s expenses. ASU 2023-07 will be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of the pending adoption of AUS 2023-07 on its unaudited condensed consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, which is an update to Topic 740, Income Taxes. The amendments in this update enhances the transparency and decision usefulness of income tax disclosures. ASU 2023-09 will be effective for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this Update should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating the impact the adoption of ASU 2023-07 will have on its annual and interim disclosures.
4. DISCONTINUED OPERATIONS
Discontinued operations - P2P lending services business
Since October 2019, the Company has discontinued its online P2P lending services business. Carrying amounts of major classes of liabilities was included as part of discontinued operations of Online P2P lending services, whose change was due to the effect of exchange rate changes as of December 31, 2024 and March 31, 2024:
December 31, | March 31, | |||||||
2024 | 2024 | |||||||
(Unaudited) | ||||||||
Current liabilities | ||||||||
Accrued expenses and other liabilities | $ | $ |
Discontinued operations – Online ride-hailing platform service
The
Company used to operate online ride-hailing platform services through its own platform from October 2020 to August 2024, through XXTX,
which was a wholly owned subsidiary of Senmiao Zecheng, a wholly-owned subsidiary of the Company. On August 8, 2024, Senmiao Consulting
entered into a certain Acquisition Agreement with Debt Assumption Takeover (the “Acquisition Agreement”) with Jiangsu Yuelaiyuexing
Technology Co., Ltd. (the “Purchaser”), and other parties thereto, in connection with the acquisition (the “Acquisition”)
by the Purchaser of
17
Reconciliation of the carrying amounts of major classes of assets and liabilities from discontinued operations of online ride-hailing platform service in consolidated balance sheets as of December 31, 2024 and March 31, 2024 are as follows:
December 31, 2024 | March 31, 2024 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | $ | ||||||
Accounts receivable | ||||||||
Prepayments, other receivables, and other current assets, net | ||||||||
Due from a related party | ||||||||
Total current assets | ||||||||
Property and equipment, net: | ||||||||
Other Assets | ||||||||
Intangible assets, net | ||||||||
Total assets | $ | $ | ||||||
LIABILITIES | ||||||||
Current liabilities | ||||||||
Borrowings from financial institutions | $ | $ | ||||||
Accounts payable | ||||||||
Accrued expenses and other liabilities | ||||||||
Total current liabilities | ||||||||
Other liabilities: | ||||||||
Borrowings from financial institutions, noncurrent | ||||||||
Deferred tax liability | ||||||||
Total Other liabilities | ||||||||
Total liabilities | $ | $ |
The following table sets forth the reconciliation of the amounts of major classes of income and losses from discontinued operations of online ride-hailing platform service in the unaudited condensed consolidated statements of operations and comprehensive loss for the three and nine months ended December 31, 2024 and 2023.
For the Three Months Ended | For the nine Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
Revenues | $ | $ | $ | $ | ||||||||||||
Cost of revenues | ( | ) | ( | ) | ( | ) | ||||||||||
Gross profit | ||||||||||||||||
Operating expenses | ||||||||||||||||
Selling, general and administrative expenses | ( | ) | ( | ) | ( | ) | ||||||||||
Provision for credit losses | ( | ) | ||||||||||||||
Total operating expenses | ( | ) | ( | ) | ( | ) | ||||||||||
Loss from operations | ( | ) | ( | ) | ( | ) | ||||||||||
Other income (expenses), net | ( | ) | ( | ) | ||||||||||||
Interest expense | ( | ) | ( | ) | ( | ) | ||||||||||
Loss before income taxes | ( | ) | ( | ) | ( | ) | ||||||||||
Income tax benefit | ||||||||||||||||
Net loss from discontinued operations | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) |
18
Reconciliation of the amount of cash flows from discontinued operations in the unaudited condensed consolidated statements of cash flows for the nine months ended December 31, 2024 and 2023 are as follows:
For the Nine Months Ended December 31, | ||||||||
2024 | 2023 | |||||||
(Unaudited) | (Unaudited) | |||||||
Net cash used in operating activities from discontinued operations | $ | ( | ) | $ | ( | ) | ||
Net cash provided by investing activities from discontinued operations | $ | $ | ||||||
Net cash (used in) provided by financing activities from discontinued operations | $ | ( | ) | $ |
5. ACCOUNTS RECEIVABLE, NET
Accounts receivable includes rental receivables due from operating lessees. It also includes a portion of bundled lease arrangements on fixed minimum monthly payments to be paid by the automobile purchasers arising from automobile sales and services fees, net of unearned interest income, discounted using the Company’s lease pricing interest rates.
As of December 31, 2024 and March 31, 2024, accounts receivable were comprised of the following:
December 31, | March 31, | |||||||
2024 | 2024 | |||||||
(Unaudited) | ||||||||
Receivables of operating lease | $ | $ | ||||||
Receivables of automobile sales due from automobile purchasers | ||||||||
Less: Allowance for credit losses | ( | ) | ( | ) | ||||
Accounts receivable, net | $ | $ |
Movement of allowance for credit losses for the nine months ended December 31, 2024 and for year ended March 31, 2024 are as follows:
December 31, | March 31, | |||||||
2024 | 2024 | |||||||
(Unaudited) | ||||||||
Beginning balance | $ | $ | ||||||
Addition | ||||||||
Translation adjustment | ( | ) | ( | ) | ||||
Ending balance | $ | $ |
19
6. PREPAYMENTS, OTHER RECEIVABLES AND OTHER CURRENT ASSETS, NET
As of December 31, 2024 and March 31, 2024, the prepayments, other receivables and other current assets, net were comprised of the following:
December 31, | March 31, | |||||||
2024 | 2024 | |||||||
(Unaudited) | ||||||||
Deposits (i) | $ | $ | ||||||
Prepaid expenses (ii) | ||||||||
Value added tax (“VAT”) recoverable (iii) | ||||||||
Due from automobile purchasers, net (iv) | ||||||||
Employee advances | ||||||||
Others | ||||||||
Less: Allowance for credit losses | ( | ) | ( | ) | ||||
Total prepayments, other receivables and other current assets, net | $ | $ |
Movement of allowance for credit losses for the nine months ended December 31, 2024 and for year ended March 31, 2024 are as follows:
December 31, | March 31, | |||||||
2024 | 2023 | |||||||
(Unaudited) | ||||||||
Beginning balance | $ | $ | ||||||
Addition | ||||||||
Translation adjustment | ( | ) | ( | ) | ||||
Ending balance | $ | $ |
(i) | Deposits |
The
balance of deposits mainly represented the security deposit made by the Company to various automobile leasing companies, financial institutions
and Didi Chuxing Technology Co., Ltd., who runs an online ride-hailing platform. As of December 31, 2024 and March 31, 2024,
the allowance for credit losses of $
(ii) | Prepaid expense |
The balance of prepaid expense represented automobile purchase prepayments, automobile liability insurance premium for automobiles for operating lease and other miscellaneous expense such as office lease, office remodel expense, etc. that will expire within one year.
(iii) | Value added tax (“VAT”) recoverable |
The balance represented the amount of VAT, which resulted from historical purchasing activities and could be further used for deducting future VAT in PRC.
(iv) | Due from automobile purchasers, net |
The
balance due from automobile purchasers represented the payments of automobiles and related insurances and taxes made on behalf of the
automobile purchasers. The balance is expected to be collected from the automobile purchasers in installments. As of December 31, 2024
and March 31, 2024, the allowance for credit losses recorded against receivables due from automobile purchasers was $
20
7. PROPERTY AND EQUIPMENT, NET
Property and equipment as of December 31, 2024 and March 31, 2024 consist of the following:
December 31, | March 31, | |||||||
2024 | 2024 | |||||||
(Unaudited) | ||||||||
Leasehold improvements | $ | $ | ||||||
Computer equipment | ||||||||
Office equipment, fixtures and furniture | ||||||||
Automobiles | ||||||||
Subtotal | ||||||||
Less: accumulated depreciation and amortization | ( | ) | ( | ) | ||||
Total property and equipment, net | $ | $ |
Depreciation
expense for the three and nine months ended December 31, 2024 were amounted to $
Depreciation
and amortization expense for the three and nine months ended December 31, 2023 were amounted to $
8. INTANGIBLE ASSETS, NET
Intangible assets as of December 31, 2024 and March 31, 2024 consisted of the following:
December 31, | March 31, | |||||||
2024 | 2024 | |||||||
(Unaudited) | ||||||||
Software | $ | $ | ||||||
Less: accumulated amortization | ( | ) | ( | ) | ||||
Total intangible assets, net | $ | $ |
Amortization
expense for the three and nine months ended December 31, 2024 were amounted to $
Amortization
expense for the three and nine months ended December 31, 2023 were amounted to $
The following table sets forth the Company’s amortization expense for the next five years as of December 31, 2024:
Amortization
expenses | ||||
Twelve months ending December 31, 2025 | $ | |||
Twelve months ending December 31, 2026 | ||||
Twelve months ending December 31, 2027 | ||||
Twelve months ending December 31, 2028 | ||||
Twelve months ending December 31, 2029 | ||||
Thereafter | ||||
$ |
21
9. OTHER NON-CURRENT ASSETS
December 31, | March 31, | |||||||
2024 | 2024 | |||||||
(Unaudited) | ||||||||
Prepayments of automobiles purchased (i) | $ | $ |
(i) |
10. ACCRUED EXPENSES AND OTHER LIABILITIES
December 31, | March 31, | |||||||
2024 | 2024 | |||||||
(Unaudited) | ||||||||
Accrued payroll and welfare | $ | $ | ||||||
Payables to drivers from aggregation platforms (i) | ||||||||
Deposits (ii) | ||||||||
Accrued expenses (iii) | ||||||||
Other taxes payable | ||||||||
Payables for expenditures on automobile transaction and related services | ||||||||
Other payables | ||||||||
Total accrued expenses and other liabilities | $ | $ |
(i) | Payables to drivers from aggregation platforms |
The balance of payables to drivers from aggregation platforms represented the amount the Company collected on behalf of drivers who completed their transaction through the Company’s online ride-hailing platform base on the confirmed billings.
(ii) | Deposits |
The balance of deposits represented the security deposit from operating and finance lease customers to cover lease payment and related automobile expense in case the customers’ accounts are in default. The balance is refundable at the end of the lease term, after deducting any missed lease payment and applicable fee.
(iii) | Accrued expenses |
The balance of accrued expenses represented the unbilled or payable balances to the expenses related to the daily operations of automobiles and services fees to professional institutions.
11. EMPLOYEE BENEFIT PLAN
The Company has made employee benefit plan in accordance with relevant PRC regulations, including retirement insurance, unemployment insurance, medical insurance, housing fund, work injury insurance and maternity insurance.
The contributions made by the Company were $
As
of December 31, 2024 and March 31, 2024, the Company did not make adequate employee benefit contributions in the amount of $
22
12. EQUITY
Warrants
Warrants in Offerings
The Company adopted the provisions of ASC 815 on determining what types of instruments or embedded features in an instrument held by a reporting entity can be considered indexed to its own stock for the purpose of evaluating the first criteria of the scope exception in ASC 815. Warrants issued in connection with the direct equity offering with exercise prices denominated in US dollars are no longer considered indexed to the Company’s stock, as their exercise prices are not in the Company’s functional currency (RMB), and therefore no longer qualify for the scope exception and must be accounted for as a derivative. These warrants are classified as liabilities under the caption “Derivative liabilities” in the unaudited condensed consolidated statements of balance sheets and recorded at estimated fair value at each reporting date, computed using the Black-Scholes valuation model. Changes in the liability from period to period are recorded in the unaudited condensed consolidated statements of operations and comprehensive loss under the caption “Change in fair value of derivative liabilities.”
August 2020 Underwriters’ Warrants
As
of December 31, 2024 and March 31, 2024, there were
February 2021 Registered Direct Offering Warrants
As
of December 31, 2024 and March 31, 2024, there were
May 2021 Registered Direct Offering Warrants
As
of December 31, 2024 and March 31, 2024, there were
23
November 2021 Private Placement Warrants
As
of December 31, 2024 and March 31, 2024, there were
Weighted | Average | |||||||||||||||
Average | Remaining | |||||||||||||||
Warrants | Warrants | Exercise | Contractual | |||||||||||||
Outstanding | Exercisable | Price | Life | |||||||||||||
Balance, March 31, 2023 | $ | |||||||||||||||
Forfeited | ( | ) | ( | ) | ||||||||||||
Balance, March 31, 2024 | $ | |||||||||||||||
Exercised | ||||||||||||||||
Balance, December 31, 2024 (unaudited) | $ |
Restricted Stock Units
On
October 29, 2020, the Board approved the issuance of an aggregate of
Equity Incentive Plan
At
the 2018 Annual Meeting of Stockholders of the Company held on November 8, 2018, the Company’s stockholders approved the
Company’s 2018 Equity Incentive Plan for employees, officers, directors and consultants of the Company and its affiliates. In
March 2023 and April 2024, the Annual Meeting of Stockholders of Company for the years ended March 31, 2022 and 2023 further
approved the amendments to the 2018 Equity Incentive Plan, to increase the number of shares of common stock reserved under the Plan
to
24
Conversion Price Adjustment for November 2021 Preferred Shares
Pursuant
to the Certificate of Designation for the series A convertible preferred stock signed by the Company and certain institutional investors
in November 2021 Private Placement, the initial conversion price of the series A Convertible Preferred Shares was $
13. INCOME TAXES
The United States of America
The
Company is incorporated in the State of Nevada in the U.S., and is subject to U.S. federal corporate income taxes with tax rate of
On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act imposes a one-time transition tax on deemed repatriation of historical earnings of foreign subsidiaries, and future foreign earnings are subject to U.S. taxation. The Tax Act also established the Global Intangible Low-Taxed Income (GILTI), a new inclusion rule affecting non-routine income earned by foreign subsidiaries. For the three and nine months ended December 31, 2024 and 2023, the Company’s foreign subsidiaries in China were operating at loss and as such, did not record a liability for GILTI tax.
The Company’s net operating loss for U.S.
income taxes from U.S amounted to approximately $
PRC
Senmiao
Consulting, Sichuan Senmiao Ronglian Technology Co., Ltd. (“Sichuan Senmiao”), Hunan Ruixi, Sichuan Senmiao Yicheng Assets
Management Co., Ltd. (“Yicheng”), Corenel, and Jiekai are subject to PRC Enterprise Income Tax (“EIT”) on the
taxable income in accordance with the relevant PRC income tax laws. The EIT rate for companies operating in the PRC is
25
Net loss before income tax by jurisdiction as follows:
For the Three Months Ended | For the nine Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
U.S. | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
PRC | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Total net loss before income tax | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
For the three and nine months ended December 31, 2024 and 2023, the Company had no current tax expense or deferred tax expense.
The tax effects of temporary differences from continuing operations that give rise to the Company’s deferred tax assets and liabilities are as follows:
December 31, | March 31, | |||||||
2024 | 2024 | |||||||
Deferred Tax Assets | (Unaudited) | |||||||
Net operating loss carryforwards in the PRC | $ | $ | ||||||
Net operating loss carryforwards in the U.S. | ||||||||
Allowance for credit losses | ||||||||
Others | ||||||||
Less: valuation allowance | ( | ) | ( | ) | ||||
Deferred tax assets, net | $ | $ |
As
of both December 31, 2024 and March 31, 2024, the Company’s PRC entities associated with discontinued operations had net operating
loss carryforwards of approximately $
The tax effects of temporary differences from discontinued operations that give rise to the Company’s deferred tax assets are as follows:
December
31, 2024 | March 31, 2024 | |||||||
(Unaudited) | ||||||||
Net operating loss carry forwards in the PRC | $ | $ | ||||||
Less: valuation allowance | ( | ) | ( | ) | ||||
Total | $ | $ |
Uncertain tax positions
The
Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical
merits, and measure the unrecognized benefits associated with the tax positions. As of December 31, 2024 and March 31, 2024, the Company
did not have any unrecognized uncertain tax positions and the Company does not believe that its unrecognized tax benefits will change
over the next twelve months. For the three and nine months ended December 31, 2024 and 2023, the Company did not incur any interest and
penalties related to potential underpaid income tax expenses. According to PRC Tax Administration and Collection Law, the statute of
limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or withholding agent. The
statute of limitations will be extended five years under special circumstances, which are not clearly defined (but an underpayment of
tax liability exceeding RMB
26
14. CONCENTRATION
Major Suppliers
For the three months ended December 31, 2024, three suppliers
accounted for approximately
For the three months ended December 31, 2023, four suppliers accounted
for approximately
15. RELATED PARTY TRANSACTIONS AND BALANCES
1. Related Party Balances
1) Prepayment, a related party
As
of December 31, 2024 and March 31, 2024, the balance of prepayment to a related party represented automobile lease prepayment made by
the Company to Jinkailong, the Company’s equity investee company, with amount of $
2) Due from related parties
As of December 31, 2024 and March 31, 2024, balances due from related parties from the Company’s operations were comprised of the following:
December 31, | March 31, | |||||||
2024 | 2024 | |||||||
(Unaudited) | ||||||||
Total due from related parties | $ | $ | ||||||
Less: Allowance for credit losses | ( | ) | ( | ) | ||||
Due from related parties, net | $ | $ | ||||||
Due from related parties, net, current | $ | $ | ||||||
Due from a related party, net, non-current | $ | $ |
As
of December 31, 2024, balances due from Jinkailong, the Company’s equity investee company, was $
As
of March 31, 2024, balances due from Jinkailong, the Company’s equity investee company was $
27
Movement of allowance for credit losses due from Jinkailong for the nine months ended December 31, 2024 and for the year ended March 31, 2024 are as follows:
December 31, | March 31, | |||||||
2024 | 2024 | |||||||
(Unaudited) | ||||||||
Beginning balance | $ | $ | ||||||
Addition | ||||||||
Translation adjustment | ( | ) | ( | ) | ||||
Ending balance | $ | $ |
On
January 3, 2024, Xiang Hu, the Legal Representative of Sichuan Senmiao and a shareholder of the Company, entered into a loan agreement
wherein the Company agreed to provide an interest-free special reserve loan of $
3)
December 31, | March 31, | |||||||
2024 | 2024 | |||||||
(Unaudited) | ||||||||
Loan payable to a related party (i) | $ | $ | ||||||
Other payable due to a related party (ii) | ||||||||
Total due to related parties | $ | $ |
(i) |
(ii) |
4)
December 31, | March 31, | |||||||
2024 | 2024 | |||||||
(Unaudited) | ||||||||
Operating lease right-of-use assets – a related party | $ | $ | ||||||
Operating lease liabilities – a related party | $ | $ |
In
November 2018, Hunan Ruixi entered into an office lease agreement with Hunan Dingchentai Investment Co., Ltd. (“Dingchentai”),
a company where one of the Company’s independent directors serves as the legal representative and general manager. The term of
the lease agreement was from November 1, 2018 to October 31, 2023 and the rent was approximately $
28
2. Related Party Transactions
For
the three and nine months ended December 31, 2024, the Company incurred $
For
the three and nine months ended December 31, 2024, the Company incurred $
During
the three months ended December 31, 2024 and 2023, Corenel leased automobiles to Jinkailong and generated revenue of $
During
the nine months ended December 31, 2024 and 2023, Corenel leased automobiles to Jinkailong and generated revenue of $
16. LEASES
Lessor
The Company’s operating leases for automobile rentals have rental periods that are typically short term, generally is twelve months or less. Revenue recognition section of Note 3 (l), the Company discloses that revenue earned from automobile rentals, wherein an identified asset is transferred to the customer and the customer has the ability to control that asset, is accounted for under Topic 842 upon adoption for the three and nine months ended December 31, 2024.
Lessee
As of December 31, 2024 and March 31, 2024, the Company has engaged in offices and showroom leases which were classified as operating leases.
The Company leased automobiles under operating lease agreements with a term shorter than twelve months which it elected not to recognize lease assets and lease liabilities under ASC 842. Instead, the Company recognized the lease payments in profit or loss on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred. In addition, the Company had automobiles leases which were classified as finance lease.
The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The Company recognized lease expense on a straight-line basis over the lease term for operating lease. Meanwhile, the Company recognized the finance leases ROU assets and interest on an amortized cost basis. The amortization of finance ROU assets is recognized on a straight-line basis as amortization expense, while the lease liability is increased to reflect interest on the liability and decreased to reflect the lease payments made during the period. Interest expense on the lease liability is determined each period during the lease term as the amount that results in a constant periodic interest rate of the automobile loans on the remaining balance of the liability.
As
of December 31, 2024, the weighted-average remaining operating and finance lease term of its existing leases is approximately
29
Operating and finance lease expenses consist of the following:
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||
Classification | December
31, 2024 | December
31, 2023 | December
31, 2024 | December
31, 2023 | ||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||
Operating lease cost | ||||||||||||||||||
Automobile lease costs | Cost of revenues | $ | $ | $ | $ | |||||||||||||
Lease expenses | Selling, general and administrative | |||||||||||||||||
Finance lease cost | ||||||||||||||||||
Amortization of leased asset | Cost of revenue | |||||||||||||||||
Amortization of leased asset | General and administrative | |||||||||||||||||
Interest on lease liabilities | Interest expenses on finance leases | |||||||||||||||||
Total lease expenses | $ | $ | $ | $ |
Operating
lease costs for automobiles totaled $
Operating lease expenses for offices and showroom
leases totaled $
Interest
expenses on finance leases totaled $
The following table sets forth the Company’s minimum lease payments in future periods:
Operating lease | Finance lease | |||||||||||
payments* | payments | Total | ||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
Twelve months ending December 31, 2025 | $ | $ | $ | |||||||||
Total lease payments | ||||||||||||
Less: discount | ( | ) | ( | ) | ( | ) | ||||||
Present value of lease liabilities | $ | $ | $ |
* |
30
17. COMMITMENTS AND CONTINGENCIES
Contingencies
In measuring the credit risk of automobile purchasers, the Company primarily reflects the “probability of default” by the automobile purchasers on its contractual obligations and considers the current financial position of the automobile purchasers and its likely future development.
The Company manages the credit risk of automobile purchasers by performing preliminary credit checks of each automobile purchaser and ongoing monitoring every month. By using the current credit loss model, management is of the opinion that the Company is bearing the credit risk to repay the principal and interests to the financial institutions if automobile purchasers’ default on their payments for more than three months. Management also periodically re-evaluates probability of default of automobile purchasers to make adjustments in the allowance, when necessary.
Purchase commitments
On
September 23, 2022, the Company entered into a purchase contract with an automobile dealer to purchase a total
of
Contingent liability of Jinkailong
Pursuant
to the Regulations of the State Council on Implementing the Management System for Registered Capital Registration in the Company Law
of the People's Republic of China issued on July 1, 2024 (the “Registered Capital Registration Implementing Rules”),
as Jinkailong was registered and established before June 30, 2024, its shareholders should fully pay their unpaid subscribed capital
before June 30, 2032. As of December 31, 2024, Hunan Ruixi holds
18. SUBSEQUENT EVENTS
The Company evaluated all events and transactions that occurred after December 31, 2024 up through the date the Company filed these unaudited condensed consolidated financial statements. No events require adjustment to or disclosure in the unaudited condensed consolidated financial statements.
31
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our results of operations and financial condition should be read together with our unaudited condensed consolidated financial statements and the notes thereto, which are included elsewhere in this Report and our Annual Report on Form 10-K for the year ended March 31, 2024 (the “Annual Report”) filed with the SEC. Our unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Overview
We are a provider of automobile transaction and related services, connecting consumers, who are mostly existing and prospective ride-hailing drivers affiliated with different operators of online ride-hailing platforms in the People’s Republic of China (“PRC” or “China”). We provide automobile transaction and related services through our wholly owned subsidiary, Chengdu Corenel Technology Limited, a PRC limited liability company (“Corenel”), and our majority owned subsidiaries, Chengdu Jiekai Technology Ltd. (“Jiekai”), and Hunan Ruixi Financial Leasing Co., Ltd. (“Hunan Ruixi”), a PRC limited liability company. Substantially all of our operations are conducted in China.
From October 2020 to August 2024, we also operated an online ride-hailing platform through Hunan Xixingtianxia Technology Co., Ltd. (“XXTX”), a wholly-owned subsidiary of Sichuan Senmiao Zecheng Business Consulting Co., Ltd., our wholly-owned subsidiary (“Senmiao Consulting”). The platform enabled qualified ride-hailing drivers to provide application-based transportation services mainly in Chengdu, Changsha and other 20 cities in China. As more fully discussed below under “– Our Discontinued Ride-Hailing Platform Services,” we ceased our online ride-hailing Platform Services on August 20, 2024.
Our Automobile Transactions and Related Services
Our Automobile Transaction and Related Services are mainly comprised of (i) automobile operating lease where we 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) monthly services where we provide management and related services to other online ride-hailing platforms we cooperated with (“Partner Platforms”) and other companies and earn commission from them (the “Auto Commissions”); (iii) automobile financing where we provide our customers with auto finance solutions through financing leases (the “Auto Financing”); (iv) service fees from new energy vehicles (“NEVs”) leasing, automobile purchase 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 “NEVs and Purchase Services”); and (v) automobile sales (the “Auto Sales”) and other supporting services provided to online ride-hailing drivers, including auto management and other related services (the “Auto Management Services”). We started our facilitation and supporting services in November 2018, the sale of automobiles in January 2019, and financial and operating leasing in March 2019, respectively.
Since November 22, 2018, the acquisition date of Hunan Ruixi, and as of December 31, 2024, we have facilitated financing for an aggregate of 312 automobiles with a total value of approximately $5.3 million, sold an aggregate of 1,516 automobiles with a total value of approximately $14.5 million and delivered 1,977 automobiles under operating leases and 182 automobiles under financing leases to customers, the vast majority of whom are online ride-hailing drivers.
32
The table below provides a breakdown of the number of vehicles sold or delivered under different leasing arrangements or managed by us and corresponding revenue generated for the three and nine months ended December 31, 2024 and 2023:
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||||||||||||||||||
Number of | Number of | Number of | Number of | |||||||||||||||||||||||||||||
Vehicles | Revenue* | Vehicles | Revenue* | Vehicles | Revenue* | Vehicles | Revenue* | |||||||||||||||||||||||||
Auto Operating Leasing | 662 | $ | 747,000 | 871 | $ | 992,000 | 704 | 2,088,000 | 1,466 | $ | 3,069,000 | |||||||||||||||||||||
Auto Commissions | — | $ | 44,000 | — | $ | 51,000 | — | 101,000 | — | $ | 168,000 | |||||||||||||||||||||
Auto Financing | 51 | $ | 24,000 | 40 | $ | 12,000 | 53 | 73,000 | 57 | $ | 37,000 | |||||||||||||||||||||
Other Services | >670 | $ | 105,000 | >480 | $ | 53,000 | >690 | 283,000 | >860 | $ | 206,000 |
During the three months ended December 31, 2024, our Auto Operating Leasing, Auto Commissions, Auto Financing and other services income accounted for approximately 81.2%, 4.8%, 2.6%, and 11.4% of our total revenue from our automobile transactions and related services, respectively, while our Auto Operating Leasing, Auto Commissions, Auto Financing, and other services income accounted for approximately 89.5%, 4.6%, 1.1%, and 4.8% for the three months ended December 31, 2023, respectively. During the nine months ended December 31, 2024, our Auto Operating Leasing, Auto Commissions, Auto Financing and other services income accounted for approximately 82.1%, 4.0%, 2.9%, and 11.0% of our total revenue from our automobile transactions and related services, respectively, while our Auto Operating Leasing, Auto Commissions, Auto Financing, and other services income accounted for approximately 88.2%, 4.8%, 1.1%, and 5.9% for the nine months ended December 31, 2023, respectively.
Our Discontinued Online Ride-Hailing Platform Services
From October 2020 to August 2024, we operated our own online ride-hailing platform in China. 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. XXTX operated Xixingtianxia and held a national online reservation taxi operating license, which served online ride-hailing drivers in 22 cities in China, providing them with a platform to view and take customer orders for rides. XXTX generated 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 earned 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.
Due the fierce competition of the online ride-hailing industry, XXTX had been suffered loss. Since December 2023, XXTX had engaged Anhui Lianma Technology Co., Ltd. (“Anhui Lianma”), a third-party to co-operate the online ride-hailing platform by outsourcing certain daily operation work to Anhui Lianma in most of cities it operates platform in XXTX and Anhui Lianma will jointly share the operational profits, with the specific calculation method being defined in the cooperation agreement. However, considering the changes in online ride-hailing industry and development plan of the Company, on August 8, 2024, we entered into an acquisition agreement with debt assumption takeover (“Acquisition Agreement”) with a third party named Jiangsu Yuelaiyuexing Technology Co., Ltd. (“Yuelai”), and certain other parties thereto. Pursuant to the Acquisition Agreement, Yuelai acquired all of the equity interests the XXTX at a total purchase price of zero, while taking over certain liabilities of XXTX as defined in the Acquisition Agreement. On August 20, 2024, the acquisition was completed and we ceased the online ride-hailing platform services.
Key Factors and Risks Affecting Results of Operations
Ability to Increase Our Automobile Lessee and Active Driver Base
Our revenue growth has been largely driven by the expansion of our automobile lessee base and the corresponding revenue generated from operating and financial leasing. We acquire customers for our Automobile Transaction and Related Services through the network of third-party sales teams, referral from online ride-hailing platforms and our own efforts including online advertising and billboard advertising. We also send out fliers and participate in trade shows to advertise our services. We plan to maintain the number of our customers by marketing our companies to our existing and prospective automobile lessees in the cities we now operate in. We expect to keep our Active Driver base to promote the growth of our automobile rental business because we offer automobile rental solutions/incentives specifically targeted at drivers using our Partner Platforms. An effective cross-selling strategies between our automobile leasing business and our Partner Platforms is important to our expansion and revenue growth. We also plan to strengthen our marketing efforts through the collaboration with certain automobile dealers and through our own team by employing more experienced staff, sharing market resources with our equity investee company, and improving the quality and variety of our services. As of December 31, 2024, we had 4 employees in our own sales department.
33
Management of Automobile Rentals
Due to the fierce competition of online ride-hailing industry in those cities we operated in, we have witnessed a high turn-over rate on the short-term car rentals during the nine months ended December 31, 2024. To meet the demand in Chengdu and Changsha, we have purchased and leased automobiles from third parties for our operating lease. The daily management and timely maintenance of leased automobiles will have a significant effect on the stability and potential growth of our income from leasing automobiles in the next twelve months. The effective management, including maintaining the high turn-over rate of our automobiles through our proprietary system and experienced auto-management team could provide in-time delivery and qualified automobiles to potential lessees, either for personal use or providing online ride-hailing services. As of December 31, 2024, for parking and management of automobiles for operating lease, we had one parking lot, an exhibition hall and 3 employees in Changsha, and we also share the parking lot with our equity investee company, Jinkailong in Chengdu. During the three months ended December 31, 2024 and 2023, the average utilization of the automobiles for operating lease was approximately 85.9% and 80.6%, respectively. During the nine months ended December 31, 2024 and 2023, the average utilization of the automobiles for operating lease was approximately 84.8% and 77.6%, respectively.
Our Service Offerings and Pricing
The growth of our revenue depends on our ability to improve existing solutions and services provided, continue identifying evolving business needs, refine our collaborations with business partners and provide value-added services to our customers. The attraction of new automobile leases depends on our leasing solutions with attractive rental price and flexible leasing terms. We have also adopted a series of pricing formulas to adopt the market changes, considering the historical and future expenditure, remaining available leasing months and market price to determine our rental price for varied rental solutions. Furthermore, our product designs affect the type of automobile leases we attract, which in turn affect our financial performance. The attraction of new customers depends on the comprehensive income they could earn from our own or Partner Platforms, which is mainly affected by the number of orders distributed to them through our platform and the amount of the incentives paid to them from platforms. Our revenue growth also depends on our abilities to effectively price our services, which enables us to attract more customers and improve our profit margin.
Ability to Retain Key Business Cooperators
Historically, we have set up a series of strategy and business relationships with certain affiliates of some famous and leading companies of NEVs manufacturers, online ride-hailing platforms, local NEVs leasing companies, and travel service providers to develop our Automobile Transaction and Related Services. We earned commission or services fee from them, purchased and leased automobiles for our business at a favorable price. The close relationships have provided us with the necessary capacity to support the development of our online ride-hailing platform and leasing business. To retain these valuable cooperators and continuously explore opportunities to collaborate with them in more areas is important to us to have considerable resources to support the exploration and expansion of our business into new cities.
Meanwhile, in order to strengthen our market position in certain cities, our subsidiaries, Hunan Ruixi and Jiekai, have built up cooperation relationships with Partner Platforms, such as Hunan Didi Technology Co., Ltd., Chengdu Anma Zhixing Technology Co., Ltd., Sichuan Peitu Kuaixing Technology Co., Ltd. and Chongqing Yiqizhao Technology Co., Ltd. Chengdu Branch, whereby the online ride-hailing requests and orders shall be completed on Partner Platforms utilizing the network of cars and drivers of us while Hunan Ruixi and Jiekai earned rental income from drivers and earned commissions from Partner Platforms.
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Ability to Collect Receivables on a Timely Basis
For receivables from Auto Operating Leasing, we usually settle the rental income with each online ride-hailing driver monthly based on the product solutions they chose. In accordance with the development of the operating lease business, our Partner Platforms, such as Gaode, agree to temporarily “lock-up” the fares of the rides which the driver earned from the platform to ensure the timely collection of our rental receivables from them. As of December 31, 2024, we had accounts receivable of operating lease of approximately $40,000 in total. Besides, during the nine months ended December 31, 2024, we settled our commissions with the Partner Platforms for our online ride-hailing platform services and automobile rental income on a monthly basis.
The efficiency of collection of the monthly and weekly payments has a material impact on our daily operation. Our risk and asset management department has set up a series of procedures to monitor the collection from drivers. Our business department has also set up a stable and close relationship with Partner Platforms to ensure the timely collection of commissions. The accounts receivable and advance payments may increase our liquidity risk. We have used the majority of the proceeds from our equity offerings and plan to seek equity and/or debt financings to pay for the expenditure related to the automobile purchase. To pay for the expenditure in advance will enhance the stability of our daily operation and lower the liquidity risk, and attract more customers.
Ability to Manage Defaults Effectively
We manage the credit risk arising from the default of automobile purchasers and lessees by performing credit checks on each automobile purchaser or lessee based on the credit reports from People’s Bank of China and third-party credit rating companies, and personal information including residence, ethnicity group, driving history and involvement in legal proceeding. Our risk department continuously monitors the payment by each purchaser and sends them payment reminders. We also keep monitoring the daily gross fare earned by the online ride-hailing drivers, who are our majority customers and run their business through our online ride-hailing platform during the nine months ended December 31, 2024. We do this so that we can evaluate their financial conditions and provide them with assistance including the transfer of automobile to a new driver if they are no longer interested in providing ride-hailing services or are unable to earn enough income to make monthly lease/loan payments.
Further, the automobiles subject to our financing leases are not collateralized by us. As of December 31, 2024, the total value of non-collateralized automobiles was approximately $216,000. We believe our risk exposure of financing leasing is immaterial as we have experienced limited default cases and we are able to re-lease those automobiles to drivers under financing leases.
Ability to Compete Effectively
Our business and results of operations depend on our ability to compete effectively. Overall, our competitive position may be affected by, among other things, our service quality and our ability to price our solutions and services competitively. We will set up and continuously optimize our own business system to improve our service quality and user experience. Our competitors may have more resources than we do, including financial, technological, marketing and others and may be able to devote greater resources to the development and promotion of their services. We will need to continue to introduce new or enhance existing solutions and services to continue to attract automobile dealers, financial institutions, car buyers, lessees, ride-hailing drivers and other industry participants. Whether and how quickly we can do so will have a significant impact on the growth of our business.
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Market Opportunity and Government Regulations in China
The demand for our 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 emerging online platforms have created good opportunities for the development of the online ride-hailing service market. The market value is expected to increase from RMB354.7 billion in 2024 to RMB751.3 billion in 2028, owing to rising consumer demand for economical mobility options and an amplified penetration of shared mobility services, especially in lower-tier cities. According to the 54th Statistical report on Internet Development in China published in August 2024 by the China Internet Network Information Center (the “CNNIC”), the number of online ride-hailing service users had reached 503 million by the end of December 2023, and took approximately 45.7% of the total number of Chinese internet users. In addition, in recent years, aggregation platforms have gained rising significance in the shared mobility industry. According to Frost & Sullivan, the portion of ride hailing orders fulfilled through aggregation platforms increased from 3.5% in 2018 to 30.0% in 2023, and is expected to further increase to 49.0% by 2028. The online ride-hailing industry is also facing increasing competition in China and is attracting more capital investment. For example, Dida Inc., Chenqi Technology Limited and CaoCao Inc. have filed their prospectuses to the Stock Exchange of Hong Kong Limited in March 2024 and April 2024, respectively.
However, the participants in the online ride-hailing industry are facing increasingly fierce competitions. According to the Ministry of Transportation (the “MOT”) of the People’s Republic of China, as of October 30, 2024, approximately 362 online ride-hailing platforms have obtained booking taxi operating licenses and the total volume of online ride-hailing orders was approximately 1,007 million in October 2024 in China, representing an increase of approximately 8% and 24% as compared with the ones as of October 30, 2023, respectively. Meanwhile, approximately 3.21 million online booking taxi transportation certificates and approximately 7.48 million online booking taxi driver’s licenses were issued nationwide in China, both representing an increase of approximately 18% as compared with the ones as of December 31, 2023. Since 2023, the municipal transportation bureaus in a series of cities in China have released operational dynamics and risk warnings for the online ride-hailing industry, stating that the online ride-hailing market has become saturated. They remind enterprises and practitioners who intend to engage in online ride-hailing services should have a detailed understanding of relevant regulations, conduct market research, fully consider changes in operating income due to factors such as supply and demand, market conditions, fluctuations or continuous declines, objectively evaluate the actual income level of industry practitioners, and make rational and prudent career choices.
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 average income of individual and intensify the competition between platforms. 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.
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 guidelines on compliance requirements for online ride-hailing businesses, including Working Process for the Online Appointment of Taxi Drivers Qualification Examination and Issuance and Online Appointment 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 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.
However, approximately 41% of our ride-hailing drivers have not obtained the driver’s license for online ride-hailing services as of December 31, 2024 while all of the cars used for online ride-hailing services which we provided management services 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. Meanwhile, during the nine months ended December 31, 2024, Gaode conducted several rounds of compliance checks in Chengdu and other cities. Gaode reduced the number of orders dispatched to XXTX platform as it found certain drivers who provide their online ride-hailing services through our platform without obtaining the driver’s licenses during the check. We had assisted the drivers to obtain the required certificate and license for our Automobile Transaction and Related Services. However, there was no guarantee that all of the drivers who run their online ride-hailing business would be able to obtain all the certificates and licenses. These Partner Platforms may not allow unqualified drivers who lease our automobiles to drive through these platforms, or reduce their commission income, so that they may not be able to earn enough income from those Partner Platforms to pay our rental fees. Our business and results of operations shall be materially and adversely affected if we could not serve qualified drivers or our served drivers are suspended from providing ride-hailing services.
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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, during the nine months ended December 31, 2024, XXTX was fined by approximately $3,000 by Traffic Management Bureaus in Changsha for providing online ride-hailing platform services to unqualified drivers. Since October 2020, XXTX had been fined by approximately $311,000 by Traffic Management Bureaus in Changsha, Chengdu, Guangzhou and other cities, of which, approximately $62,000 was further compensated by drivers or cooperated third parties.
The Chinese government has exercised and continued 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.
Results of Continuing Operations for the three months ended December 31, 2024 Compared to the three months ended December 31, 2023
For the Three Months Ended | ||||||||||||
December 31, | ||||||||||||
2024 | 2023 | Change | ||||||||||
(unaudited) | (unaudited) | |||||||||||
Revenues | $ | 919,836 | $ | 1,108,207 | $ | (188,371 | ) | |||||
Cost of revenues | (743,449 | ) | (819,757 | ) | 76,308 | |||||||
Gross profit | 176,387 | 288,450 | (112,063 | ) | ||||||||
Operating expenses | ||||||||||||
Selling, general and administrative expenses | (515,366 | ) | (746,514 | ) | 231,148 | |||||||
Provision for credit losses | (367,245 | ) | — | (367,245 | ) | |||||||
Stock-based compensation | — | (444,300 | ) | 444,300 | ||||||||
Total operating expenses | (882,611 | ) | (1,190,814 | ) | 308,203 | |||||||
Loss from operations | (706,224 | ) | (902,364 | ) | 196,140 | |||||||
Other income, net | 4,897 | 159,933 | (155,036 | ) | ||||||||
Interest expense on finance leases | (3,365 | ) | (6,791 | ) | 3,426 | |||||||
Change in fair value of derivative liabilities | 121,314 | 46,188 | 75,126 | |||||||||
Loss before income taxes | (583,378 | ) | (703,034 | ) | 119,656 | |||||||
Income tax expense | — | — | — | |||||||||
Net loss from continuing operations | $ | (583,378 | ) | $ | (703,034 | ) | $ | 119,656 |
Revenues
We started generating revenue from Automobile Transaction and Related Services from our acquisition of Hunan Ruixi on November 22, 2018. Revenue for the three months ended December 31, 2024 decreased by $188,371, or approximately 17.0%, as compared with the three months ended December 31, 2023. The decrease was mainly due to the decrease number of the automobiles for operating lease.
As we focus on our automobile rental business currently, we expect revenue from our automobile rental to continuously account for a majority of our revenues. We plan to provide a series of product solutions to sustain and further increase the number of our automobiles for operating leases.
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The following table sets forth the breakdown of revenues by revenue source for the three months ended December 31, 2024 and 2023:
For the Three Months Ended | ||||||||
December 31, | ||||||||
2024 | 2023 | |||||||
(unaudited) | (unaudited) | |||||||
Revenue from automobile transactions and related services | ||||||||
- Operating lease revenues from automobile rentals | $ | 747,253 | $ | 992,071 | ||||
- Service fees from NEVs leasing | 68,963 | 8,412 | ||||||
- Monthly services commissions | 43,755 | 51,388 | ||||||
- Financing revenues | 23,668 | 12,195 | ||||||
- Service fees from automobile purchase services | 2,959 | 19,122 | ||||||
- Other revenues | 33,238 | 25,019 | ||||||
Total Revenue | $ | 919,836 | $ | 1,108,207 |
Revenue from our automobile transaction and related services mainly includes operating lease revenues from automobile rentals, service fees from NEVs leasing, monthly services commissions, financing revenues, service fees from automobile purchase services, and other services fees, which accounted for approximately 81.2%, 7.5%, 4.8%, 2.6%, 0.3% and 3.6%, respectively, of the total revenue from automobile transaction and related services during the three months ended December 31, 2024. Meanwhile, operating lease revenues from automobile rentals, service fees from NEVs leasing, monthly services commissions, financing revenues, sales revenue of automobiles and other services fees, which accounted for approximately 89.5%, 0.8%, 4.6%, 1.1%, 1.7% and 2.3%, respectively, of the total revenue from automobile transaction and related services during the three months ended December 31, 2023.
Operating lease revenues from automobile rentals
We generate revenues from leasing our own automobiles, sub-leasing automobiles leased from third-parties or rendered by online ride-hailing drivers with their authorization for a lease term of no more than twelve months. The decrease of rental income of $244,818 or approximately 24.7% during the three months ended December 31, 2024 was mainly due to the decrease in the number of the automobiles leased for operating lease as well as average monthly rental income per automobile. We leased approximately 662 automobiles with an average monthly rental income of approximately $383 per automobile, resulting in a rental income of $747,253, including rental income of $2,882 from Jinkailong, for the three months ended December 31, 2024. While we leased over 870 automobiles with an average monthly rental income of approximately $477 per automobile, resulting in a rental income of $992,071, including rental income of $7,133 from Jinkailong, for the three months ended December 31, 2023.
Service fees from NEVs leasing
We generated revenues of $68,963 and $8,412 from leasing NEVs by charging leases service fees during the three months ended December 31, 2024 and 2023, respectively. The amount of services fees for NEVs leasing were based on our product solutions in accordance which adjusted with different market conditions.
Monthly services commissions
We generated revenues of $43,755 and $51,388 from the monthly management and related services provided to our Partner Platforms and other companies during the three months ended December 31, 2024 and 2023, respectively. The decrease of $7,633 or approximately 14.9% was due to decrease in the number of the automobiles and drivers we served, who ran their business through the Partner Platforms.
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Financing revenues
We started our financial leasing business in March 2019 and began to generate interest income from providing financial leasing services to ride-hailing drivers in April 2019. We also charge the customers of our automobile financing facilitation services interest on their monthly payments which cover purchase price of automobile and our services fees and facilitation fees for terms of 36 or 48 months. We recognized a total interest income of $23,668 from an average monthly number of 49 automobiles and $12,195 from an average monthly number of 26 automobiles during the three months ended December 31, 2024 and 2023, respectively. The increase was due to the monthly payment we charged to customers and the average number of automobiles served for financial leasing increased during the three months ended December 31, 2024.
Service fees from automobile purchase services and Other revenues
We generated revenues of $2,959 and $19,122 from the automobile purchase services during the three months ended December 31, 2024 and 2023, respectively. The decrease was due to the number of the automobiles purchase transactions decreased to 2 during the three months ended December 31, 2024 from 14 in the same period in 2023. We generate other revenues from other miscellaneous service fees charged to our customers. Other services fees mainly include the maintenance fees charged to our customers pursuant to certain new production solutions.
We generate other revenues from other miscellaneous service fees charged to our customers during the three months ended December 31, 2024 and 2023. Other services fees mainly include the maintenance fees charged to our customers pursuant to certain new production solutions.
Cost of Revenues
Cost of revenues represents the amortization of ROUs, depreciation and rental cost of automobiles, daily maintenance and insurance expense of automobiles which related to our Auto Operating Leasing. Cost of revenues decreased by $76,308 or approximately 9.3% during the three months ended December 31, 2024 as compared with the same period in 2023, mainly due to the monthly average number of the automobiles leased for operating lease decreased to 324 in the three months ended December 31, 2024 from 444 in the three months ended December 31, 2023. During the three months ended December 31, 2024 and 2023, the costs of automobiles under operating leases with amount of $44,479 and $80,973, respectively, was from a related party.
Gross Profit
We had gross profit of $176,387 and $288,450, respectively, during the three months ended December 31, 2024 and 2023. The decrease of $112,063 was mainly due to the decrease in gross profit from Auto Operating Leasing. The following table sets forth the breakdown of gross profit by major revenue source for the three months ended December 31, 2024 and 2023:
For the Three Months Ended | ||||||||
December 31, | ||||||||
2024 | 2023 | |||||||
(unaudited) | (unaudited) | |||||||
- Auto Operating Leasing | $ | 3,804 | $ | 172,314 | ||||
- Other Automobile transaction and related Services | 172,583 | 116,136 | ||||||
Total Gross Profit | $ | 176,387 | $ | 288,450 |
We had a gross profit of $3,804 in our Auto Operating Leasing during the three months ended December 31, 2024, which decreased by $168,510 from a gross profit of $172,314 in the three months ended December 31, 2023. The decrease was attributable to the average monthly rental income decreased from approximately $477 for the three months ended December 31, 2023 to approximately $383 for the three months ended December 31, 2024 while the related cost did not decrease that much. As a result, the gross profit margin of the revenues from our Auto Business decreased from approximately 17.4% to approximately 0.5% during the three months ended December 31, 2024, led our overall gross profit margin decreased to approximately 19.2% from approximately 26.0% during the three months ended December 31, 2023 since the revenue generated from auto operating lease accounted over 80% of our total revenues.
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Selling, General and Administrative Expenses
Selling, general and administrative expenses primarily consist of salary and employee benefits, office rental expense, travel expenses, and other costs. Selling, general and administrative expenses decreased from $746,514 for the three months ended December 31, 2023 to $515,366 for the three months ended December 31, 2024, representing a decrease of $231,148, or approximately 31.0%. The decrease was attributable to our continuous control on costs and streamline expenses during the three months ended December 31, 2024. The decrease mainly consisted of (1) a decrease of $158,567 in offices rental and charges; and (2) a decrease of $87,303 in in salary and employee benefits as the average monthly number of our employees decreased from 65 for the three months ended December 31, 2023 to 46 for the three months ended December 31, 2024.
Provision for credit losses
We re-evaluated the possibility of collection of unsettled balances from customers/suppliers of our automobile transactions and related services, and provided provision for credit losses of $367,245 against receivables from Jinkailong for the three months ended December 31, 2024. While we did not provide additional provision for credit losses against receivables during the three months ended December 31, 2023.
Stock-based compensation
In October 2023, we entered into three different consulting and services agreements (the “Consulting Agreements”) with three consultants (the “Consultants”), pursuant to which we engaged the Consultant to provide certain merger and acquisition consulting service, market research and business development advisory services, and financial consulting services, respectively. We issued an aggregate of 1,500,000 shares of our common stock in November 2023 to settle the compensation for the services. We did not have similar transaction during the three months ended December 31, 2024.
Other income, net
For the three months ended December 31, 2024, we had other income, net of $4,897, which primarily consist of (1) penalty income of approximately $20,000 from the customers; partially offset by (2) the loss of approximately $2,000 from the disposal of our own fixture and furniture used for operating leases;(3) the miscellaneous expense of approximately $13,000.
For the three months ended December 31, 2023, we had other income, net of $159,933, which primarily consist of (1) the income of approximately $5,000 from the disposal of our right-of-use assets and our own vehicles used for operating leases; (2) penalty income of approximately $102,000 from the customers; and (3) the miscellaneous income of approximately $53,000.
Interest Expense on Finance Leases
Interest expense on finance leases for the three months ended December 31, 2024 and 2023 was $3,365 and $6,791, respectively, representing the interest expense accrued under financing leases for the leased automobiles Corenel leased from a third-party company, and the leased automobiles rendered to us for sublease or sale by the online ride-hailing drivers who exited the ride-hailing business.
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Change in Fair Value of Derivative Liabilities
Warrants issued in our registered direct offerings that took place in February 2021 and May 2021, and the August 2020 underwritten public offering, and the November 2021 private placement were classified as liabilities under the caption “Derivative Liabilities” in the consolidated balance sheet and recorded at estimated fair value at each reporting date, computed using the Black-Scholes valuation model. The change in fair value of derivative liabilities for the three months ended December 31, 2024 and 2023 was a gain of $121,314 and $46,188, respectively. The following table sets forth the breakdown of the gain in fair value of derivative liabilities for the three months ended December 31, 2024 and 2023:
For the Three Months Ended | ||||||||
December 31, | ||||||||
2024 | 2023 | |||||||
(unaudited) | (unaudited) | |||||||
- August 2020 underwritten public offering | $ | 1,630 | $ | 774 | ||||
- February 2021 registered direct offering | 2,077 | 986 | ||||||
- May 2021 registered direct offering | 40,663 | 15,942 | ||||||
- November 2021 private placement | 76,944 | 28,486 | ||||||
Total Change in Fair Value of Derivative Liabilities | $ | 121,314 | $ | 46,188 |
Income Tax Expense
Generally, our subsidiaries are subject to enterprise income tax on their taxable income in China at a rate of 25%. The enterprise income tax is calculated based on the entity’s global income as determined under PRC tax laws and accounting standards. All the subsidiaries in China suffered losses and no tax expense was recorded for the three months ended December 31, 2024 and 2023.
Net loss from continuing operations
As a result of the foregoing, net loss from continuing operations for the three months ended December 31, 2024 was $583,378, representing a decrease of $119,656 from net loss of $703,034 for the three months ended December 31, 2023.
Results of Continuing Operations for the nine months ended December 31, 2024 Compared to the nine months ended December 31, 2023
For the Nine Months Ended | ||||||||||||
December 31, | ||||||||||||
2024 | 2023 | Change | ||||||||||
(unaudited) | (unaudited) | |||||||||||
Revenues | $ | 2,544,725 | $ | 3,480,453 | $ | (935,728 | ) | |||||
Cost of revenues | (2,018,469 | ) | (2,738,690 | ) | 720,221 | |||||||
Gross profit | 526,256 | 741,763 | (215,507 | ) | ||||||||
Operating expenses | ||||||||||||
Selling, general and administrative expenses | (1,899,515 | ) | (2,434,146 | ) | 534,631 | |||||||
Provision for credit losses | (722,681 | ) | (680,396 | ) | (42,285 | ) | ||||||
Stock-based compensation | — | (444,300 | ) | 444,300 | ||||||||
Total operating expenses | (2,622,196 | ) | (3,558,842 | ) | 936,646 | |||||||
Loss from operations | (2,095,940 | ) | (2,817,079 | ) | 721,139 | |||||||
Other income, net | 444,761 | 275,736 | 169,025 | |||||||||
Interest expense | — | (525 | ) | 525 | ||||||||
Interest expense on finance leases | (12,723 | ) | (23,107 | ) | 10,384 | |||||||
Change in fair value of derivative liabilities | 105,900 | 410,027 | (304,127 | ) | ||||||||
Loss before income taxes | (1,558,002 | ) | (2,154,948 | ) | 596,946 | |||||||
Income tax expense | — | — | — | |||||||||
Net loss from continuing operations | $ | (1,558,002 | ) | $ | (2,154,948 | ) | $ | 596,946 |
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Revenues
We started generating revenue from Automobile Transaction and Related Services from our acquisition of Hunan Ruixi on November 22, 2018.
Revenue for the nine months ended December 31, 2024 decreased by $935,728, or approximately 26.9%, as compared with the nine months ended December 31, 2023. The decrease was mainly due to the decrease of $981,472 of operating lease revenues from automobile rentals resulted from the decrease number of the automobiles for operating lease.
The following table sets forth the breakdown of revenues by revenue source for the nine months ended December 31, 2024 and 2023:
For the Nine Months Ended | ||||||||
December 31, | ||||||||
2024 | 2023 | |||||||
(unaudited) | (unaudited) | |||||||
Revenue from automobile transactions and related services | ||||||||
- Operating lease revenues from automobile rentals | $ | 2,087,986 | $ | 3,069,458 | ||||
- Service fees from NEVs leasing | 142,751 | 33,309 | ||||||
- Monthly services commissions | 100,690 | 168,199 | ||||||
- Financing revenues | 72,697 | 37,135 | ||||||
- Service fees from automobile purchase services | 29,862 | 31,354 | ||||||
- Other revenues | 110,739 | 140,998 | ||||||
Total Revenue | $ | 2,544,725 | $ | 3,480,453 |
Revenue from our automobile transaction and related services mainly includes operating lease revenues from automobile rentals, service fees from NEVs leasing, monthly services commissions, financing revenues, service fees from automobile purchase services, and other services fees, which accounted for approximately 82.1%, 5.6%, 4.0%, 2.9%, 1.2%, and 4.2%, respectively, of the total revenue from automobile transaction and related services during the nine months ended December 31, 2024. Meanwhile, operating lease revenues from automobile rentals, service fees from NEVs leasing, monthly services commissions, financing revenues, service fees from automobile purchase services, and other services fees, which accounted for approximately 88.2%, 1.0%, 4.8%, 1.1%, 0.9%, and 4.0%, respectively, of the total revenue from automobile transaction and related services during the nine months ended December 31, 2023.
Operating lease revenues from automobile rentals
We generate revenues from leasing our own automobiles, sub-leasing automobiles leased from third-parties or rendered by online ride-hailing drivers with their authorization for a lease term of no more than twelve months. The decrease of rental income of $981,472 or approximately 32.0% during the nine months ended December 31, 2024 was mainly due to the decrease in the number of the automobiles leased for operating lease as well as average monthly rental income per automobile. We leased approximately 704 automobiles with an average monthly rental income of approximately $409 per automobile, resulting in a rental income of $2,087,986, including rental income of $11,747 from Jinkailong, for the nine months ended December 31, 2024. While we leased over 1,400 automobiles with an average monthly rental income of approximately $485 per automobile, resulting in a rental income of $3,069,458, including rental income of $29,280 from Jinkailong, for the nine months ended December 31, 2023.
Service fees from NEVs leasing
We generated revenues of $142,751and $33,309 from leasing NEVs by charging leases service fees during the nine months ended December 31, 2024 and 2023, respectively. The amount of services fees for NEVs leasing is based on our product solutions which adjusted in accordance with different market conditions.
Monthly services commissions
We generated revenues of $100,690 and $168,199 from the monthly management and related services provided to our Partner Platforms and other companies during the nine months ended December 31, 2024 and 2023, respectively. The decrease of $67,509 or approximately 40.1% was due to decrease in the number of the automobiles and drivers we served, who ran their business through the Partner Platforms.
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Financing revenues
We started our financial leasing business in March 2019 and began to generate interest income from providing financial leasing services to ride-hailing drivers in April 2019. We also charge the customers of our automobile financing facilitation services interest on their monthly payments which cover purchase price of automobile and our services fees and facilitation fees for terms of 36 or 48 months. We recognized a total interest income of $72,697 from an average monthly number of 45 automobiles and $37,135 from an average monthly number of 34 automobiles during the nine months ended December 31, 2024 and 2023, respectively. The increase was due to the monthly payment we charged to customers and the average number of automobiles served for financial leasing increased during the nine months ended December 31, 2024.
Service fees from automobile purchase services and Other revenues
We generate revenues from providing a series of automobile purchase services throughout the automobile purchase transaction process, including sales-type lease. We had revenue from 21 and 19 automobiles purchase transaction during the nine months ended December 31, 2024 and 2023, respectively. The related service fees income slightly decreased $1,492 from $31,354 during the nine months ended December 31, 2023 to $29,862 during the nine months ended December 31, 2024 due to the different services we provided.
We generate other revenues from other miscellaneous service fees charged to our customers and sales of automobile. Other services fees mainly include the maintenance fees charged to our customers pursuant to certain new production solutions.
Cost of Revenues
Cost of revenues represents the amortization of ROUs, depreciation and rental cost of automobiles, daily maintenance and insurance expense of automobiles which related to our Auto Operating Leasing. Cost of revenues decreased by $720,221 or approximately 26.3% during the nine months ended December 31, 2024 as compared with the same period in 2023, mainly due to the monthly average number of the automobiles leased for operating lease decreased to 293 in the nine months ended December 31, 2024 from 513 in the nine months ended December 31, 2023. During the nine months ended December 31, 2024 and 2023, the costs of automobiles under operating leases with amount of $63,440 and $473,317, respectively, was from a related party.
Gross Profit
We had gross profit of $526,256 and $741,763, respectively, during the nine months ended December 31, 2024 and 2023. The decrease of $215,507 was mainly due to the decrease in profit from Auto Operating Leasing. The following table sets forth the breakdown of gross profit by major revenue source for the nine months ended December 31, 2024 and 2023:
For the Nine Months Ended | ||||||||
December 31, | ||||||||
2024 | 2023 | |||||||
(unaudited) | (unaudited) | |||||||
- Auto Operating Leasing | $ | 69,517 | $ | 330,768 | ||||
- Other Automobile transaction and related Services | 456,739 | 410,995 | ||||||
Total Gross Profit | $ | 526,256 | $ | 741,763 |
We had a gross profit of $69,517 in our Auto Operating Leasing during the nine months ended December 31, 2024, which decreased by $261,251 from a gross profit of $330,768 in the nine months ended December 31, 2023. The decrease was mainly attributable to the decrease in the number of the automobiles leased for operating lease from approximately 1,400 for the nine months ended December 31, 2023 to approximately 700 for the nine months ended December 31, 2024, respectively while the related cost did not decrease that much. As a result, the gross profit margin of the revenues from our Auto Business decreased from approximately 10.8% for the nine months ended December 31, 2023 to approximately 3.3% for the nine months ended December 31, 2024, led our overall gross profit margin slightly decreased to approximately 20.7% from approximately 21.3% during the nine months ended December 31, 2023.
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Selling, General and Administrative Expenses
Selling, general and administrative expenses primarily consist of salary and employee benefits, office rental expense, travel expenses, and other costs. Selling, general and administrative expenses decreased from $2,434,146 for the nine months ended December 31, 2023 to $1,899,515 for the nine months ended December 31, 2024, representing a decrease of $534,631, or approximately 22.0%. The decrease was attributable to our continuous control on costs and streamline expenses during the nine months ended December 31, 2024. The decrease mainly consisted of (1) a decrease of $183,944 in salary and employee benefits as the average monthly number of our employees decreased from 67 to 54; and (2) a decrease of $ $276,727 in offices rental and charges; and (3) a decrease of $125,122 in professional service fees such as financial, legal and market consulting in the nine months ended December 31, 2024.
Provision for credit losses
We re-evaluated the possibility of collection of unsettled balances from customers/suppliers of our automobile transactions and related services, and provided provision for credit losses of $722,681 and $680,396 against receivables from Jinkailong for the nine months ended December 31, 2024 and 2023, respectively.
Stock-based compensation
In October 2023, we entered into three different consulting and services agreements (the “Consulting Agreements”) with three consultants (the “Consultants”), pursuant to which we engaged the Consultant to provide certain merger and acquisition consulting service, market research and business development advisory services, and financial consulting services, respectively. We issued an aggregate of 1,500,000 shares of our common stock in November 2023 to settle the compensation for the services. We did not have similar transaction during the nine months ended December 31, 2024.
Other income, net
For the nine months ended December 31, 2024, we had other income, net of $444,761, which primarily consist of the (1) a gain of $397,775 from deconsolidation of XXTX; (2) penalty income of approximately $80,000 from the customers; (3) income of approximately $4,000 from the disposal of our own vehicles used for operating leases; partially offset by (4) the expense of approximately $20,000 from the termination of our right-of-use assets for an exhibition hall we leased in Changsha, and (5) the miscellaneous expense of approximately $17,000.
For the nine months ended December 31, 2023, we had other income, net of $275,736, which primarily consist of (1) the income of approximately $32,000 from the disposal of our right-of-use assets and our own vehicles used for operating leases; (2) penalty income of approximately $154,000 from the customers; and (3) the miscellaneous income of approximately $90,000.
Interest Expense and Interest Expense on Finance Leases
Interest expense on finance leases for the nine months ended December 31, 2024 and 2023 was $12,723 and $23,107, respectively, representing the interest expense accrued under financing leases for the leased automobiles Corenel leased from a third-party company, and the leased automobiles rendered to us for sublease or sale by the online ride-hailing drivers who exited the ride-hailing business.
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Change in Fair Value of Derivative Liabilities
Warrants issued in our registered direct offerings that took place in June 2019, February 2021 and May 2021, and the August 2020 underwritten public offering, and the November 2021 private placement were classified as liabilities under the caption “Derivative Liabilities” in the consolidated balance sheet and recorded at estimated fair value at each reporting date, computed using the Black-Scholes valuation model. The change in fair value of derivative liabilities for the nine months ended December 31, 2024 and 2023 was a gain of $105,900 and $410,027, respectively. The following table sets forth the breakdown of the gain in fair value of derivative liabilities for the nine months ended December 31, 2024 and 2023:
For the Nine Months Ended | ||||||||
December 31, | ||||||||
2024 | 2023 | |||||||
(unaudited) | (unaudited) | |||||||
- June 2019 registered direct offering | $ | — | $ | 6 | ||||
- August 2020 underwritten public offering | 2,654 | 7,577 | ||||||
- February 2021 registered direct offering | 3,125 | 10,266 | ||||||
- May 2021 registered direct offering | 45,085 | 148,067 | ||||||
- November 2021 private placement | 55,036 | 244,111 | ||||||
Total Change in Fair Value of Derivative Liabilities | $ | 105,900 | $ | 410,027 |
Income Tax Expense
Generally, our subsidiaries are subject to enterprise income tax on their taxable income in China at a rate of 25%. The enterprise income tax is calculated based on the entity’s global income as determined under PRC tax laws and accounting standards. All the subsidiaries in China suffered losses and no tax expense was recorded for the nine months ended December 31, 2024 and 2023.
Net loss from continuing operations
As a result of the foregoing, net loss from continuing operations for the nine months ended December 31, 2024 was $1,558,002, representing a decrease of $596,946 from net loss of $2,154,948 for the nine months ended December 31, 2023.
Results of Discontinued Operations for the three and nine months ended December 31, 2024 Compared to the three and nine months ended December 31, 2023
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
Revenues | $ | — | $ | 510,203 | $ | 344,241 | $ | 2,059,622 | ||||||||
Cost of revenues | — | (381,085 | ) | (247,025 | ) | (1,427,766 | ) | |||||||||
Gross profit | — | 129,118 | 97,216 | 631,856 | ||||||||||||
Operating expenses | ||||||||||||||||
Selling, general and administrative expenses | — | (306,461 | ) | (166,937 | ) | (964,851 | ) | |||||||||
Provision for credit losses | — | — | (173,278 | ) | — | |||||||||||
Total operating expenses | — | (306,461 | ) | (340,215 | ) | (964,851 | ) | |||||||||
Loss from operations | — | (177,343 | ) | (242,999 | ) | (332,995 | ) | |||||||||
Other income (expenses), net | — | (5,699 | ) | 33,214 | (24,699 | ) | ||||||||||
Interest expense | — | (7,852 | ) | (8,372 | ) | (10,085 | ) | |||||||||
Loss before income taxes | — | (190,894 | ) | (218,157 | ) | (367,779 | ) | |||||||||
Income tax benefit | — | — | 4,510 | — | ||||||||||||
Net loss from discontinued operations | $ | — | $ | (190,894 | ) | $ | (213,647 | ) | $ | (367,779 | ) |
The results of discontinued operations mainly consist of the financial figures of our former subsidiary, XXTX. As of August 20, 2024, we deconsolidated XXTX and its business result was included in our online ride-hailing platform services before we deconsolidated its financial figures.
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Revenues
XXTX generated revenue from providing services to online ride-hailing drivers to assist them in providing transportation service to the riders though our platform and earned commissions for each completed order equal to 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 since October 2020.
During the three months ended December 31, 2023, approximately 1.2 million rides with gross fare of approximately $3.6 million were completed through Xixingtianxia platform and an average of over 4,900 Active Drivers each month. XXTX earned online ride-hailing platform service fees of $510,203, after netting off approximately $40,000 incentives paid to Active Drivers.
During the nine months ended December 31, 2024, approximately 0.6 million rides with gross fare of approximately $1.8 million were completed through our Xixingtianxia platform and an average of over 2,100 Active Drivers each month. XXTX earned online ride-hailing platform service fees of $344,241, after netting off approximately $32,000 incentives paid to Active Drivers.
During the nine months ended December 31, 2023, approximately 4.1 million rides with gross fare of approximately $12.5 million were completed through our Xixingtianxia platform and an average of over 5,400 Active Drivers each month. XXTX earned online ride-hailing platform service fees of $2,059,622, after netting off approximately $0.2 million incentives paid to Active Drivers.
Cost of Revenues
Cost of revenues from discontinued operations represents technical service charges, insurance and other expenses related to Online Ride-Hailing Platform Services. During each of the three and nine months ended December 31, 2024, cost of revenues decreased as compared with the same period in 2023, mainly due to the decrease in direct expense and technical service fees of online ride-hailing platform services due to the decrease in the number of completed orders.
Selling, General and Administrative Expenses
Selling, general and administrative expenses from discontinued operations primarily consisted of (1) $64,859 in salary and employee benefits; (2) $32,187 in entertainment, advertising and promotion; and (3) other miscellaneous expenses in the nine months ended December 31, 2024.
While it primarily consisted of (1) $116,458 in salary and employee benefits; (2) $108,649 in entertainment, advertising and promotion; and (3) other miscellaneous expenses in the three months ended December 31, 2023. It primarily consisted of (1) $392,744 in salary and employee benefits; (2) $398,474 in entertainment, advertising and promotion and (3) other miscellaneous expenses in the nine months ended December 31, 2023.
Provision for credit losses
For the nine months ended December 31, 2024, XXTX provided provision for credit losses of $173,278 against receivables from a prepaid software development fee and a deposit due to the termination on the development which resulting from the discontinuing of the business.
Other income (expense), net
For the nine months ended December 31, 2024, XXTX had other income, net of $33,214, which primarily due to the miscellaneous other income in its daily operations.
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For the three and nine months ended December 31, 2023, XXTX had other expense, net of $5,699 and $24,699, respectively, which primarily due to the miscellaneous other expense in its daily operations.
Interest Expense
Interest expense from discontinued operations was resulted from the borrowings of XXTX from a financial institution for its working capital turnover.
Income Tax Benefit
For the nine months ended December 31, 2024, XXTX had deferred tax benefit of $4,510, resulted from deferred tax, while all the subsidiaries of XXTX suffered losses for the three and nine months ended December 31, 2024 and 2023, no income taxes were recorded for the corresponding period accordingly.
Net loss from discontinued operations
As a result of the foregoing, the net loss from discontinued operations for the nine months ended December 31, 2024 was $213,647. While the net loss from discontinued operations for the three and nine months ended December 31, 2023 was $190,894 and $367,779, respectively.
Liquidity and Going Concern
We have financed our operations primarily through proceeds from our equity offerings, stockholder loans, commercial debt and cash flow from operations.
We had cash and cash equivalents of $949,224 as of December 31, 2024 as compared to $737,719 as of March 31, 2024. We primarily hold our excess unrestricted cash in short-term interest-bearing bank accounts at financial institutions.
Our business is capital intensive. We have considered whether there is substantial doubt about our ability to continue as a going concern due to (1) the net loss of approximately $1.8 million for the nine months ended December 31, 2024; (2) accumulated deficit of approximately $43.3 million as of December 31, 2024; (3) the working capital deficit of approximately $3.4 million as of December 31, 2024; and (4) a purchase commitment of approximately $0.9 million for 100 automobiles. As of the filing date of this Report, we have entered into a purchase contract with an automobile dealer to purchase a total of 100 automobiles in the amount of approximately $1.5 million, of which, approximately $0.6 million has been remitted as purchase prepayments. The remaining purchase commitment of approximately $0.9 million shall be remitted in installment to be completed before March 31, 2025.
We do not believe that the proceeds from our public offerings and our anticipated cash flows would be sufficient to meet our anticipated working capital requirements and capital expenditures in the ordinary course of business for the next 12 months from the date of this Report. We have determined there is substantial doubt about our ability to continue as a going concern. If we are unable to generate significant revenue, we may be required to cease or curtail our operations. We are trying to alleviate the going concern risk through the following sources:
● | equity financing to support our working capital; |
● | other available sources of financing (including debt) from PRC banks and other financial institutions; and |
● | financial support and credit guarantee commitments from our related parties. |
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Based on the above considerations, we are of the opinion that we will probably not have sufficient funds to meet our working capital requirements and debt obligations as they become due one year from the filing date of this Report, if we are unable to obtain additional financing. In addition, there is no assurance that we will be successful in implementing the foregoing plans or that additional capitals will be available to us on commercially reasonable terms, or at all. There are a number of factors that could potentially arise that could undermine our plans, such as (i) changes in the demand for our services, (ii) PRC government policies, (iii) economic conditions in China and worldwide, (iv) competitive pricing in the automobile transaction and related service and ride-hailing industries, (v) changes in our relationships with key business partners, (vi) that financial institutions in China may not able to provide continued financial support to our customers, and (vii) the perception of PRC-based companies in the U.S. capital markets. Our inability to secure needed financing when required could require material changes to our business plans and could have a material adverse effect on our viability and results of operations.
For the Nine Months Ended | ||||||||
December 31, | ||||||||
2024 | 2023 | |||||||
(unaudited) | (unaudited) | |||||||
Net Cash Provided by Operating Activities | $ | 548,442 | $ | 254,749 | ||||
Net Cash Used in Investing Activities | (448,208 | ) | (541,204 | ) | ||||
Net Cash Used in Financing Activities | (17,528 | ) | (194,523 | ) | ||||
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash | 71,882 | (61,915 | ) | |||||
Cash, Cash Equivalents and Restricted Cash at Beginning of the Period | 794,636 | 1,610,090 | ||||||
Cash, Cash Equivalents and Restricted Cash at End of the Period | 949,224 | 1,067,197 | ||||||
Less: Cash and cash equivalents from discontinued operations | — | (44,087 | ) | |||||
Cash, Cash equivalents and Restricted Cash from continuing operations, end of Period | $ | 949,224 | $ | 1,023,110 |
Cash Flow in Operating Activities
For the nine months ended December 31, 2024, net cash provided by operating activities was $548,442, which consisted of net cash inflows of $621,883 from continuing operations and net cash outflows of $73,441 from discontinued operations. While for the nine months ended December 31, 2023, net cash provided by operating activities was $254,749, which consisted of net cash inflows of $603,079 from continuing operations and net cash outflows of $348,330 from discontinued operations.
The decrease of $18,804 in net cash provided by operating activities from continuing operations for the nine months ended December 31, 2024 as compared with the nine months ended December 31, 2023 was primarily attributable to (1) decrease of $596,946 in net loss; (2) decrease of $304,127 in gains resulted from change of fair value of derivative liabilities; (3) increase of $182,019 in the change of accrued expenses and other liabilities (both third parties and due to a related party); and partially offset by (4) non-incurrence of $444,300 in stock-based compensation in the nine months ended December 31, 2024 as compared with it in the same period in 2023; (5) the gain of $397,775 from deconsolidation of XXTX; (6) decrease of $101,025 in amortization of right-of-use assets; and (7) decrease of $98,806 in the change of accounts payable.
Cash Flow in Investing Activities
For the nine months ended December 31, 2024, we had net cash used in investing activities of $448,208, which consisted of the net cash outflows of $448,257 from continuing operations and net cash inflows of $49 from discontinued operations. The majority of net cash used in investing activities from continuing operations was (1) a loan to a related party of $320,703; (2) the cash of $142,751 released upon disposal of XXTX, (3) the purchase furniture for office purpose of $1,607, partially offset by (4) the proceeds from sales of the used-automobiles of $16,804.
For the nine months ended December 31, 2023, we had net cash used in investing activities of $541,204, which consisted of the net cash outflows of $541,363 from continuing operations and net cash inflows of $159 from discontinued operations. The majority of net cash used in investing activities was $643,376 paid for the purchase of automobiles for operating lease purpose, and partially offset by the proceeds from sales of the used-automobiles and rendered automobiles of $102,013.
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Cash Flow in Financing Activities
For the nine months ended December 31, 2024, we had net cash used in financing activities of $17,528, which consisted of net cash inflows of $64,546 from continuing operations and net cash outflows of $82,074 from discontinued operations. The majority of net cash provided by financing activities was consisted of: (1) borrowings from a related party of $79,872; and (2) repayments from a related party of $13,893; partially offset by (3) principal payments made for finance lease liabilities of $29,219.
For the nine months ended December 31, 2023, we had net cash used in financing activities of $194,523, which consisted of the net cash outflows of $430,725 from continuing operations and net cash inflows of $236,202 from discontinued operations. The net cash used in financing activities from continuing operations primarily consisted of: (1) principal payments made for finance lease liabilities of $171,388; (2) repayments to related parties and affiliates of $572,113; and (3) repayment of current borrowings to a financial institution of $8,453; partially offset by (4) repayment from a related party of $321,229. While the net cash provided by financing activities from discontinued operations primarily attributable to the borrowings from a financial institution of $251,397.
Off-Balance Sheet Arrangements
As of the filing date of this Report, we have the following off-balance sheet arrangements that are likely to have a future effect on our financial condition, revenues or expenses, results of operations and liquidity:
● | Purchase Commitments |
On September 23, 2022, we entered into a purchase contract with an automobile dealer to purchase a total of 100 automobiles for the amount of approximately $1.5 million, of which approximately $0.6 million has been remitted as purchase prepayments, and we expect to fulfill the purchase commitment before March 31, 2025.
● | Contingent Liabilities |
Pursuant to the Regulations of the State Council on Implementing the Management System for Registered Capital Registration in the Company Law of the People's Republic of China issued on July 1, 2024 (the “Registered Capital Registration Implementing Rules”), as Jinkailong was registered and established before June 30, 2024, its shareholders should fully pay their unpaid subscribed capital before June 30, 2032. As of December 31, 2024, Hunan Ruixi holds 35% of equity interest of Jinkailong and has not made any payments towards to the investment amounted to RMB3.5 million (approximately $479,000). According to the Registered Capital Registration Implementing Rules, Hunan Ruixi shall pay the subscribed capital of Jinkailong before June 30, 2032.
Inflation
We do not believe our business and operations have been materially affected by inflation.
Critical Accounting Estimates
Our unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements and accompanying notes requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We have identified certain accounting estimates that are significant to the preparation of our financial statements. These estimates are important for an understanding of our financial condition and results of operation. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments. We believe the following critical accounting estimates involve the most significant estimates and judgments used in the preparation of our financial statements.
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In presenting the unaudited condensed consolidated financial statements in accordance with U.S. GAAP, management make estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgement and available information. Accordingly, actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause us to revise our estimates. we base our estimates on past experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Estimates are used when accounting for items and matters including, but not limited to the critical accounting estimates as follows.
When reading our unaudited condensed consolidated financial statements, you should consider our selection of critical accounting policies, the judgment and other uncertainties affecting the application of such policies and the sensitivity of reported results to changes in conditions and assumptions. Our critical accounting policies and practices include the following: (i) fair values of financial instruments, including derivative liabilities; (ii) accounts receivable, net; (iii) property and equipment, net; (iv) intangible assets, net; (v) revenue recognition; and (vi) leases - lessee. See Note 3—Summary of Significant Accounting Policies to our consolidated financial statements in our 2024 Form 10-K for the disclosure of these accounting policies. We believe the following accounting estimates involve the most significant judgments used in the preparation of our financial statements.
(a) | Derivative liabilities |
A contract is designated as an asset or a liability and is carried at fair value on a company’s balance sheet, with any changes in fair value recorded in a company’s results of operations. We then determine which options, warrants and embedded features require liability accounting and records the fair value as a derivative liability by using Black-Scholes model. The changes in the values of these instruments are shown in the accompanying consolidated statements of operations and comprehensive loss as “change in fair value of derivative liabilities”.
(b) | Allowance for credit losses |
In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which requires us to measure and recognize expected credit losses for financial assets held and not accounted for at fair value through net income. We adopted this guidance effective April 1, 2023. ASC 326 introduces an approach based on expected losses to estimate the allowance for credit losses, which replaces the previous incurred loss impairment model. The adoption of this guidance did not have a material impact on our consolidated financial statements. Accounts receivable are recognized and carried at original invoiced amount less an estimated allowance for credit losses. We estimate the allowance for credit losses based on an analysis of the aging of accounts receivable, assessment of collectability, including any known or anticipated economic conditions, customer-specific circumstances, recent payment history and other relevant factors.
The balance of other receivables is unsecured and is reviewed periodically to determine whether their carrying value has become impaired. We consider the balances to be impaired if the collectability of the balances becomes doubtful. We use the individual specific valuation method to estimate the allowance for uncollectible balances. The allowance is also based on management’s best estimate of specific losses on individual exposures, as well as a provision on historical trends of collections and utilizations. Actual amounts received or utilized may differ from management’s estimate of credit worthiness and the economic environment.
As of December 31, 2024 and March 31, 2024, the allowance for credit losses represented approximately 3.7% and 7.2% of gross accounts receivable balances, respectively. The provision is recorded against accounts receivable balances, with a corresponding charge recorded in the consolidated statements of operations and comprehensive loss. Delinquent account balances are written-off against the allowance for credit losses after management has determined that the likelihood of collection is not probable. Allowance for credit losses balances amounted to $1,529 and $1,545 as of December 31, 2024 and March 31, 2024, respectively for accounts receivable. Allowance for credit losses balances amounted to $20,252 and $20,474 as of December 31, 2024 and March 31, 2024, respectively for deposits and other receivables. Allowance for credit losses balances amounted to $3,778,815 and $3,099,701 as of December 31, 2024 and March 31, 2024, respectively, for amount due from a related party.
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(c) | Leases - Lessee |
Finance and operating lease ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Since the implicit rate for our leases is not readily determinable, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that we would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a similar economic environment and over a similar term.
Lease terms used to calculate the present value of lease payments generally do not include any options to extend, renew, or terminate the lease, as we do not have reasonable certainty at lease inception that these options will be exercised. We generally consider the economic life of its operating lease ROU assets to be comparable to the useful life of similar owned assets. We have elected the short-term lease exception; therefore, operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. The leases generally do not provide a residual guarantee. The finance or operating lease ROU asset also excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term for operating lease. Meanwhile, we recognize the finance leases ROU assets and interest on an amortized cost basis. The amortization of finance ROU assets is recognized on a straight-line basis as amortization expense, while the lease liability is increased to reflect interest on the liability and decreased to reflect the lease payments made during the period. Interest expense on the lease liability is determined each period during the lease term as the amount that results in a constant periodic interest rate of the automobile loans on the remaining balance of the liability.
We review the impairment of our ROU assets consistent with the approach applied for our other long-lived assets. We review the recoverability of its long-lived assets when events or changes in circumstances occur, indicating that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. We have elected to include the carrying amount of operating lease liabilities in any tested asset group and include the associated operating lease payments in the undiscounted future pre-tax cash flows.
(d) | Impairment of long-lived assets |
Long-lived assets, including property and equipment and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. We assess the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, we would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. For the three and nine months ended December 31, 2024 and 2023, we did not recognize impairment for property and equipment and intangible assets.
(e) | Valuation of deferred tax assets |
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities.
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Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Based on an evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended), as of December 31, 2024, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective due to the following material weaknesses in our internal control over financial reporting:
● | We did not have sufficient personnel with appropriate levels of accounting knowledge and experience to address complex U.S. GAAP accounting issues and to prepare and review financial statements and related disclosures under U.S. GAAP. Specifically, our control did not operate effectively to ensure the appropriate and timely analysis of and accounting for unusual and non-routine transactions and certain financial statement accounts; |
● | We are lacking adequate policies and procedures in internal audit function to ensure that our policies and procedures have been carried out as planned; and |
● | We had deficiencies in our IT general controls, regarding to the Logical Access Security, Change Management, IT Operations and Cybersecurity of our financial system and key application system, etc. |
We are improving our IT environment and daily management to ensure network and information security. In addition, we plan to address the weaknesses identified above by implementing the following measures:
(i) | Continuously seeking and hiring additional accounting staff with comprehensive knowledge of U.S. GAAP and SEC reporting requirements; |
(ii) | Ameliorating our internal audit to assist with assessment of Sarbanes-Oxley compliance requirements and improvement of internal controls related to financial reporting; and |
(iii) | improving our IT environment and daily management. |
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting that occurred during the quarter ended December 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
52
PART II - OTHER INFORMATION
Item 6. Exhibits.
31.1 | Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
31.2 | Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
32.1 | Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
53
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Dated: February 14, 2025 | Senmiao Technology Limited | ||
By: | /s/ Xi Wen | ||
Name: | Xi Wen | ||
Title: | Chief Executive Officer | ||
(Principal Executive Officer) |
Dated: February 14, 2025 | By: | /s/ Xiaoyuan Zhang | |
Name: | Xiaoyuan Zhang | ||
Title: | Chief Financial Officer | ||
(Principal Financial Officer and Principal Accounting Officer) |
54
Exhibit 31.1
Certification Pursuant to
Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Amended
I, Xi Wen, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Senmiao Technology Limited.
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: February 14, 2025 | |
/s/ Xi Wen | |
Xi Wen | |
Chief Executive Officer | |
(Principal Executive Officer) |
Exhibit 31.2
Certification Pursuant to
Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Amended
I, Xiaoyuan Zhang, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Senmiao Technology Limited.
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: February 14, 2025 | |
/s/ Xiaoyuan Zhang | |
Xiaoyuan Zhang | |
Chief Financial Officer | |
(Principal Financial Officer and | |
Principal Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q for the quarter ended December 31, 2024 (the “Report”) of Senmiao Technology Limited (the “Company”) as filed with the Securities and Exchange Commission on the date hereof, we, Xi Wen, President and Chief Executive Officer, and Xiaoyuan Zhang, Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Xi Wen | |
Xi Wen | |
Chief Executive Officer | |
(Principal Executive Officer) | |
/s/ Xiaoyuan Zhang | |
Xiaoyuan Zhang | |
Chief Financial Officer | |
(Principal
Financial Officer and Principal Accounting Officer) |
|
February 14, 2025 |
Unaudited Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares |
Dec. 31, 2024 |
Mar. 31, 2024 |
---|---|---|
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 500,000,000 | 500,000,000 |
Common stock, issued | 10,518,040 | 10,518,040 |
Common stock, outstanding | 10,518,040 | 10,518,040 |
Series A Convertible Preferred Stock | ||
Preferred stock, par value (in Dollars per share) | $ 1,000 | $ 1,000 |
Preferred stock, authorized | 5,000 | 5,000 |
Preferred stock, issued | 991 | 991 |
Preferred stock, outstanding | 991 | 991 |
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
Revenues | ||||
Revenues | $ 916,954 | $ 1,101,074 | $ 2,532,978 | $ 3,451,173 |
Revenues, a related party | 2,882 | 7,133 | 11,747 | 29,280 |
Total revenues | 919,836 | 1,108,207 | 2,544,725 | 3,480,453 |
Cost of revenues | ||||
Cost of revenues | (698,970) | (738,784) | (1,955,029) | (2,265,373) |
Cost of revenues, a related party | (44,479) | (80,973) | (63,440) | (473,317) |
Total cost of revenues | (743,449) | (819,757) | (2,018,469) | (2,738,690) |
Gross profit | 176,387 | 288,450 | 526,256 | 741,763 |
Operating expenses | ||||
Selling, general and administrative expenses | (515,366) | (746,514) | (1,899,515) | (2,434,146) |
Provision for credit losses | (367,245) | (722,681) | (680,396) | |
Stock-based compensation | (444,300) | (444,300) | ||
Total operating expenses | (882,611) | (1,190,814) | (2,622,196) | (3,558,842) |
Loss from operations | (706,224) | (902,364) | (2,095,940) | (2,817,079) |
Other income (expense) | ||||
Other income, net | 4,897 | 159,933 | 444,761 | 275,736 |
Interest expense | (525) | |||
Interest expense on finance leases | (3,365) | (6,791) | (12,723) | (23,107) |
Change in fair value of derivative liabilities | 121,314 | 46,188 | 105,900 | 410,027 |
Total other income, net | 122,846 | 199,330 | 537,938 | 662,131 |
Loss before income tax expense | (583,378) | (703,034) | (1,558,002) | (2,154,948) |
Income tax expense | ||||
Net loss from continuing operations | (583,378) | (703,034) | (1,558,002) | (2,154,948) |
Net loss from discontinued operations | (190,894) | (213,647) | (367,779) | |
Net loss | (583,378) | (893,928) | (1,771,649) | (2,522,727) |
Net loss (income) attributable to non-controlling interests from operations | 18,063 | (40,070) | (178,535) | 234,944 |
Net loss attributable to the Company's stockholders | (565,315) | (933,998) | (1,950,184) | (2,287,783) |
Other comprehensive income (loss) | ||||
Foreign currency translation adjustment | (138,657) | 172,393 | (51,870) | (318,529) |
Comprehensive loss | (722,035) | (721,535) | (1,823,519) | (2,841,256) |
less: Total comprehensive income (loss) attributable to non-controlling interests | (14,722) | 27,449 | 237,927 | (206,596) |
Total comprehensive loss attributable to stockholders | $ (707,313) | $ (748,984) | $ (2,061,446) | $ (2,634,660) |
Weighted average number of common stock | ||||
Weighted average number of common stock basic (in Shares) | 10,521,222 | 9,446,494 | 10,521,222 | 8,463,858 |
Weighted average number of common stock diluted (in Shares) | 10,521,222 | 9,446,494 | 10,521,222 | 8,463,858 |
Net loss per share - basic (in Dollars per share) | $ (0.05) | $ (0.1) | $ (0.19) | $ (0.27) |
Net loss per share - diluted (in Dollars per share) | (0.05) | (0.1) | (0.19) | (0.27) |
Net loss per share - basic and diluted | ||||
Continuing operations Net Loss per share basic (in Dollars per share) | (0.05) | (0.08) | (0.17) | (0.23) |
Continuing operations Net Loss per share diluted (in Dollars per share) | (0.05) | (0.08) | (0.17) | (0.23) |
Discontinued operations Net Loss per share basic (in Dollars per share) | (0.02) | (0.02) | (0.04) | |
Discontinued operations Net Loss per share diluted (in Dollars per share) | $ (0.02) | $ (0.02) | $ (0.04) |
Unaudited Condensed Consolidated Statements of Changes in Equity - USD ($) |
Common stock |
Additional paid-in capital |
Accumulated deficit |
Accumulated other comprehensive loss |
Non-controlling interest |
Total |
---|---|---|---|---|---|---|
Balance at Mar. 31, 2023 | $ 773 | $ 43,355,834 | $ (37,715,294) | $ (1,247,099) | $ 3,833,466 | $ 8,227,680 |
Balance (in Shares) at Mar. 31, 2023 | 7,743,040 | |||||
Net income (loss) | (427,828) | 6,481 | (421,347) | |||
Conversion of preferred stock into common stock | $ 25 | 26,914 | 26,939 | |||
Conversion of preferred stock into common stock (in Shares) | 250,000 | |||||
Foreign currency translation adjustments | (496,137) | 42,812 | (453,325) | |||
Balance at Jun. 30, 2023 | $ 798 | 43,382,748 | (38,143,122) | (1,743,236) | 3,882,759 | 7,379,947 |
Balance (in Shares) at Jun. 30, 2023 | 7,993,040 | |||||
Balance at Mar. 31, 2023 | $ 773 | 43,355,834 | (37,715,294) | (1,247,099) | 3,833,466 | 8,227,680 |
Balance (in Shares) at Mar. 31, 2023 | 7,743,040 | |||||
Net income (loss) | (2,522,727) | |||||
Foreign currency translation adjustments | (318,529) | |||||
Balance at Dec. 31, 2023 | $ 956 | 43,834,973 | (40,003,077) | (1,593,976) | 3,626,870 | 5,865,746 |
Balance (in Shares) at Dec. 31, 2023 | 9,568,040 | |||||
Balance at Jun. 30, 2023 | $ 798 | 43,382,748 | (38,143,122) | (1,743,236) | 3,882,759 | 7,379,947 |
Balance (in Shares) at Jun. 30, 2023 | 7,993,040 | |||||
Net income (loss) | (925,957) | (281,495) | (1,207,452) | |||
Conversion of preferred stock into common stock | $ 8 | 8,075 | 8,083 | |||
Conversion of preferred stock into common stock (in Shares) | 75,000 | |||||
Foreign currency translation adjustments | (35,754) | (1,843) | (37,597) | |||
Balance at Sep. 30, 2023 | $ 806 | 43,390,823 | (39,069,079) | (1,778,990) | 3,599,421 | 6,142,981 |
Balance (in Shares) at Sep. 30, 2023 | 8,068,040 | |||||
Net income (loss) | (933,998) | 40,070 | (893,928) | |||
Issuance of common stock for consulting services | $ 150 | 444,150 | 444,300 | |||
Issuance of common stock for consulting services (in Shares) | 1,500,000 | |||||
Foreign currency translation adjustments | 185,014 | (12,621) | 172,393 | |||
Balance at Dec. 31, 2023 | $ 956 | 43,834,973 | (40,003,077) | (1,593,976) | 3,626,870 | 5,865,746 |
Balance (in Shares) at Dec. 31, 2023 | 9,568,040 | |||||
Balance at Mar. 31, 2024 | $ 1,051 | 43,950,123 | (41,384,268) | (1,672,005) | 3,159,103 | 4,054,004 |
Balance (in Shares) at Mar. 31, 2024 | 10,518,040 | |||||
Net income (loss) | (673,420) | (89,398) | (762,818) | |||
Foreign currency translation adjustments | (62,320) | 29,284 | (33,036) | |||
Balance at Jun. 30, 2024 | $ 1,051 | 43,950,123 | (42,057,688) | (1,734,325) | 3,098,989 | 3,258,150 |
Balance (in Shares) at Jun. 30, 2024 | 10,518,040 | |||||
Balance at Mar. 31, 2024 | $ 1,051 | 43,950,123 | (41,384,268) | (1,672,005) | 3,159,103 | 4,054,004 |
Balance (in Shares) at Mar. 31, 2024 | 10,518,040 | |||||
Net income (loss) | (1,771,649) | |||||
Foreign currency translation adjustments | (51,870) | |||||
Balance at Dec. 31, 2024 | $ 1,051 | 43,950,123 | (43,334,452) | (1,783,267) | 3,397,030 | 2,230,485 |
Balance (in Shares) at Dec. 31, 2024 | 10,518,040 | |||||
Balance at Jun. 30, 2024 | $ 1,051 | 43,950,123 | (42,057,688) | (1,734,325) | 3,098,989 | 3,258,150 |
Balance (in Shares) at Jun. 30, 2024 | 10,518,040 | |||||
Net income (loss) | (711,449) | 285,996 | (425,453) | |||
Foreign currency translation adjustments | 93,056 | 26,767 | 119,823 | |||
Balance at Sep. 30, 2024 | $ 1,051 | 43,950,123 | (42,769,137) | (1,641,269) | 3,411,752 | 2,952,520 |
Balance (in Shares) at Sep. 30, 2024 | 10,518,040 | |||||
Net income (loss) | (565,315) | (18,063) | (583,378) | |||
Foreign currency translation adjustments | (141,998) | 3,341 | (138,657) | |||
Balance at Dec. 31, 2024 | $ 1,051 | $ 43,950,123 | $ (43,334,452) | $ (1,783,267) | $ 3,397,030 | $ 2,230,485 |
Balance (in Shares) at Dec. 31, 2024 | 10,518,040 |
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) |
9 Months Ended | |
---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
Cash Flows from Operating Activities: | ||
Net loss | $ (1,771,649) | $ (2,522,727) |
Net loss from discontinued operations | (213,647) | (367,779) |
Net loss from continuing operations | (1,558,002) | (2,154,948) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization of property and equipment | 689,794 | 697,485 |
Stock-based compensation | 444,300 | |
Amortization of right-of-use assets | 221,879 | 322,904 |
Amortization of intangible assets | 56,278 | 86,201 |
Provision for credit losses | 722,681 | 680,396 |
Gain on disposal of equipment | (4,030) | (32,076) |
Gain from deconsolidation | (397,775) | |
Change in fair value of derivative liabilities | (105,900) | (410,027) |
Loss from lease modification | 20,449 | |
Change in operating assets and liabilities | ||
Accounts receivable | (20,924) | 4,239 |
Accounts receivable, a related party | 608 | |
Inventories | 64,257 | |
Finance lease receivables | 106,866 | 133,988 |
Prepayments, other receivables and other assets | 48,710 | 89,596 |
Prepayment - a related party | (35,315) | |
Due from a related party | 69,463 | |
Accounts payable | 76,936 | 175,742 |
Advances from customers | (17,541) | (3,577) |
Accrued expenses and other liabilities | 792,948 | 615,472 |
Due to a related party | 4,543 | |
Operating lease liabilities | (7,574) | (53,776) |
Operating lease liabilities - related parties | (41,603) | (57,705) |
Net Cash Provided by Operating Activities from Continuing Operations | 621,883 | 603,079 |
Net Cash Used in Operating Activities from Discontinued Operations | (73,441) | (348,330) |
Net Cash Provided by Operating Activities | 548,442 | 254,749 |
Cash Flows from Investing Activities: | ||
Purchases of property and equipment | (1,607) | (643,376) |
Cash received from disposal of property and equipment | 16,804 | 102,013 |
Loan to a related party | (320,703) | |
Cash released upon disposal of subsidiaries | (142,751) | |
Net Cash Used in Investing Activities from Continuing Operations | (448,257) | (541,363) |
Net Cash Provided by Investing Activities from Discontinued Operations | 49 | 159 |
Net Cash Used in Investing Activities | (448,208) | (541,204) |
Cash Flows from Financing Activities: | ||
Borrowings from a related party | 79,872 | |
Repayments from a related party | 13,893 | 321,229 |
Repayment of current borrowings to a financial institution | (8,453) | |
Repayments to related parties and affiliates | (572,113) | |
Principal payments of finance lease liabilities | (29,219) | (171,388) |
Net Cash (Used in) Provided by Financing Activities from Continuing Operations | 64,546 | (430,725) |
Net Cash (Used in) Provided by Financing Activities from Discontinued Operations | (82,074) | 236,202 |
Net Cash Used in Financing Activities | (17,528) | (194,523) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 71,882 | (61,915) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 154,588 | (542,893) |
Cash, cash equivalents and restricted cash, beginning of the period | 794,636 | 1,610,090 |
Cash, cash equivalents and restricted cash, end of the period | 949,224 | 1,067,197 |
Less: Cash and cash equivalents from discontinued operations | (44,087) | |
Cash, Cash equivalents and Restricted Cash from continuing operations, end of Period | 949,224 | 1,023,110 |
Supplemental Cash Flow Information | ||
Cash paid for interest expense | 525 | |
Cash paid for income tax | ||
Non-cash Transaction in Investing and Financing Activities | ||
Recognition of right-of-use assets and lease liabilities, related parties | 349,532 | |
Termination of right-of use assets and lease liabilities, related parties | 46,762 | |
Cash and cash equivalent from continuing operations, end of the period | 949,224 | 1,020,735 |
Restricted cash from continuing operations, end of the period | 2,375 | |
Cash and cash equivalent from discontinued operations, end of the period | 44,087 | |
Cash and cash equivalent from continuing operations, beginning of the period | 737,719 | 1,485,100 |
Restricted cash from continuing operations, beginning of the period | 2,337 | |
Cash and cash equivalent from discontinued operations, beginning of the period | $ 54,580 | $ 124,990 |
Organization and Principal Activities |
9 Months Ended |
---|---|
Dec. 31, 2024 | |
Organization and Principal Activities [Abstract] | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | 1. ORGANIZATION AND PRINCIPAL ACTIVITIES
Senmiao Technology Limited (the “Company”) is a U.S. holding company incorporated in the State of Nevada on June 8, 2017. The Company operates its business in one segment: automobile transaction and related services focusing on the online ride-hailing industry in the People’s Republic of China (“PRC” or “China”) through the Company’s wholly owned subsidiary, Chengdu Corenel Technology Co., Ltd., a PRC limited liability company (“Corenel”), and its majority owned subsidiaries, Chengdu Jiekai Yunli Technology Co., Ltd. (“Jiekai”), and Hunan Ruixi Financial Leasing Co., Ltd., a PRC limited liability company (“Hunan Ruixi”), and its equity investee company (an entity 35% owned by Hunan Ruixi), Sichuan Jinkailong Automobile Leasing Co., Ltd., a PRC limited liability company (“Jinkailong”).
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. The Company also has been engaged in operating leasing services through Hunan Ruixi, Jiekai and its equity investee company, Jinkailong since March 2019. Jinkailong used to facilitate automobile sales and financing transactions for its clients, who are primarily ride-hailing drivers and provides them operating lease and relevant after-transaction services.
The Company also used to operate online ride-hailing platform services through its own platform (known as Xixingtianxia) from October 2020 to August 2024, through Hunan Xixingtianxia Technology Co., Ltd., a PRC limited liability company (“XXTX”), which was a wholly owned subsidiary of Sichuan Senmiao Zecheng Business Consulting Co., Ltd. (“Senmiao Consulting”), a PRC limited liability company and wholly-owned subsidiary of the Company. The Company’s ride hailing platform enabled qualified ride-hailing drivers to provide transportation services in several cities in China. On August 8, 2024, Senmiao Consulting entered into a certain Acquisition Agreement with Debt Assumption Takeover (the “Acquisition Agreement”) with Jiangsu Yuelaiyuexing Technology Co., Ltd. (the “Purchaser”), and other parties thereto, in connection with the acquisition (the “Acquisition”) by the Purchaser of 100% of the Company’s equity interest in XXTX and its subsidiaries. On August 20, 2024, the Acquisition was completed and Senmiao Consulting disposed its 100% equity interest in XXTX and its subsidiaries (refer to Note 4). After the disposition, the Company operates its business in one segment.
The following diagram illustrates the Company’s corporate structure as of the filing date of these unaudited condensed 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 was 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. Starting from April 1, 2022, 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 has determined that Jinkailong was deconsolidated from the Company’s Unaudited condensed 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 December 31, 2024, the Company has outstanding balance due from Jinkailong amounted to $2,847,738 net of allowance for credit losses, of which, $2,765,537 is to be repaid over a period from January 2026 to December 2026, classified as due from a related party, net, non-current. As of March 31, 2024, the Company has outstanding balance due from Jinkailong amounted to $3,245,907, net of allowance for credit losses, of which, $2,747,313 is to be repaid over a period from April 2025 to December 2026, classified as due from a related party, net, non-current. (refer to Note 15).
As of December 31, 2024 and March 31, 2024, allowance for credit losses due from Jinkailong amounted to $3,778,815 and $3,099,701, respectively. During the three and nine months ended December 31, 2024, the Company recorded provision for credit losses against the balance due from Jinkailong of $367,245 and $722,681, respectively.
During the three and nine months ended December 31, 2023, the Company recorded provision for credit losses against the balance due from Jinkailong of and $680,396, respectively. |
Going Concern |
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Going Concern [Abstract] | ||||||||||
GOING CONCERN | 2. GOING CONCERN
In assessing the Company’s liquidity, the Company monitors and analyzes its cash on-hand and its operating and capital expenditure commitments. The Company’s liquidity needs are to meet its working capital requirements, operating expenses and capital expenditure obligations. Debt financing from financial institutions and equity financings have been utilized to finance the working capital requirements of the Company.
The Company’s business is capital intensive. The Company’s management has considered whether there is substantial doubt about its ability to continue as a going concern due to (1) the net loss of approximately $1.8 million for the nine months ended December 31, 2024; (2) accumulated deficit of approximately $43.3 million as of December 31, 2024; (3) the working capital deficit of approximately $3.4 million as of December 31, 2024; and (4) one purchase commitment of approximately $0.9 million for 100 automobiles. As of the filing date of these unaudited condensed consolidated financial statements, the Company has entered into one purchase contract with an automobile dealer to purchase a total of 100 automobiles in the amount of approximately $1.5 million, of which approximately $0.6 million has been remitted as purchase prepayments. The remaining purchase commitment of approximately $0.9 million shall be remitted in installment to be completed before March 31, 2025.
Management has determined there is substantial doubt about its ability to continue as a going concern. If the Company is unable to generate significant revenue, the Company may be required to curtail or cease its operations. Management is trying to alleviate the going concern risk through the following sources:
There is no assurance that the Company will be successful in implementing the foregoing plans or that additional financing will be available to the Company on commercially reasonable terms, or at all. There are a number of factors that could potentially arise that could undermine the Company’s plans, such as (i) changes in the demand for the Company’s services, (ii) PRC government policies, (iii) economic conditions in China and worldwide, (iv) competitive pricing in the automobile transaction and related service and ride-hailing industries, (v) changes in the Company’s relationships with key business partners, (vi) the ability of financial institutions in China to provide continued financial support to the Company’s customers, and (vii) the perception of PRC-based companies in the U.S. capital markets. The Company’s inability to secure needed financing when required could require material changes to the Company’s business plans and could have a material adverse effect on the Company’s ability to continue as a going concern and results of operations. The unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of such uncertainties. |
Summary of Significant Accounting Policies |
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Summary of Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of presentation
The unaudited condensed consolidated financial statements, including the unaudited condensed consolidated balance sheets as of December 31, 2024, the unaudited condensed consolidated statements of operations and comprehensive loss, the unaudited condensed consolidated statements of changes in equity, and the unaudited condensed consolidated statements of cash flows for the nine months ended December 31, 2024 and 2023, as well as other information disclosed in the accompanying notes, have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and pursuant to the rules and regulations of the SEC and pursuant to Regulation S-X. The interim unaudited condensed consolidated financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and the notes thereto, included in the Form 10-K for the fiscal year ended March 31, 2024, which was filed with the SEC on June 27, 2024.
The interim unaudited condensed consolidated financial statements and the accompanying notes have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the results of operations for the periods presented. The consolidated results of operations for any interim period are not necessarily indicative of the results to be expected for the full year or for any other future years or interim periods.
(b) Foreign currency translation
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing on the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates on the date of the balance sheet. The resulting exchange differences are recorded in the statement of operations.
The reporting currency of the Company and its subsidiaries is U.S. dollars (“US$”) and the unaudited condensed consolidated financial statements have been expressed in US$. However, the Company maintains the books and records in its functional currency, Chinese Renminbi (“RMB”), being the functional currency of the economic environment in which its operations are conducted.
In general, for consolidation purposes, assets and liabilities of the Company and its subsidiaries whose functional currency is not the US$, are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of the Company and its subsidiaries are recorded as a separate component of accumulated other comprehensive loss within the unaudited condensed consolidated statements of changes in equity. Translation of amounts from RMB into US$ has been made at the following exchange rates for the respective periods:
(c) Use of estimates
In presenting the unaudited condensed consolidated financial statements in accordance with U.S. GAAP, management makes estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. The Company bases its estimates on past experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Estimates are used when accounting for items and matters including, but not limited to, revenue recognition, residual values of property and equipment, lease liabilities, right-of-use assets, determinations of the useful lives and valuation of long-lived assets, estimates of allowances for credit losses for receivables and due from related parties, estimates of impairment of long-lived assets, and valuation of deferred tax assets.
(d) Fair values of financial instruments
Accounting Standards Codification (“ASC”) Topic 825, Financial Instruments (“Topic 825”) requires disclosure of fair value information of financial instruments, whether or not recognized in the balance sheets, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Topic 825 excludes certain financial instruments and all nonfinancial assets and liabilities from its disclosure requirements. Accordingly, the aggregate fair value amounts do not represent the underlying value of the Company. The three levels of valuation hierarchy are defined as follows:
Level 1 Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.
Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value. The following table sets forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2024 and March 31, 2024:
The following is a reconciliation of the beginning and ending balance of the assets and liabilities measured at fair value on a recurring basis for the nine months ended December 31, 2024 and for the year ended March 31, 2024:
The August 2020 Underwriters’ Warrants, the February 2021 Placement Agent Warrants, the February 2021 ROFR Warrants, the May 2021 Investors Warrants, the May 2021 Placement Agent Warrants, and the November 2021 Investors Warrants and November 2021 Placement Agent Warrants (all discussed below) are not traded in an active securities market; therefore, the Company estimates the fair value to those warrants using the Black-Scholes valuation model as of December 31, 2024 and March 31, 2024.
As of December 31, 2024 and March 31, 2024, financial instruments of the Company comprised primarily current assets and current liabilities including cash and cash equivalents, restricted cash, accounts receivable, finance lease receivables, prepayments, other receivables and other assets, due from related parties, accounts payable, advance from customers, lease liabilities, accrued expenses and other liabilities, due to related parties, and operating and financing lease liabilities, which approximate their fair values because of the short-term nature of these instruments, and current liabilities of borrowings from a financial institution, which approximate their fair values because of the stated loan interest rate to the rate charged by similar financial institutions.
The non-current portion of finance lease receivables, operating and financing lease liabilities were recorded at the gross amount adjusted for the interest using the effective interest rate method. The Company believes that the effective interest rates underlying these instruments approximate their fair values because the Company used its incremental borrowing rate to recognize the present value of these instruments as of December 31, 2024 and March 31, 2024.
Other than as listed above, the Company did not identify any assets or liabilities that are required to be presented on the balance sheet at fair value.
(e) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (the “CODM”), which is comprised of certain members of the Company’s management team. During the years ended March 31, 2019 and 2021, the Company acquired Hunan Ruixi and XXTX, respectively, and disposed XXTX in August 2024. The Company evaluated how the CODM manages the businesses of the Company to maximize efficiency in allocating resources and assessing performance. The Company has one operating and reportable segment of automobile transaction and related services as set forth in Note 1, after discontinued the online ride-hailing platform services on August 20, 2024.
(f) Cash and cash equivalents
Cash and cash equivalents primarily consist of bank deposits with original maturities of three months or less, which are unrestricted as to withdrawal and use. Cash and cash equivalents also consist of funds received from automobile purchasers as payments for automobiles, funds received from automobile lessees as payments for rentals, which were held at the third-party platforms’ fund accounts and which are unrestricted and immediately available for withdrawal and use.
(g) Accounts receivable, net
Accounts receivable are recorded at the invoiced amount less an allowance for any uncollectible accounts and do not bear interest, and are due on demand. The carrying value of accounts receivable is reduced by an allowance that reflects the Company’s best estimate of the amounts that will not be collected. An allowance for credit losses is recorded in the period when a loss is probable based on an assessment of specific evidence indicating collection is unlikely, historical bad debt rates, accounts aging, financial conditions of the customer and industry trends. Starting from April 1, 2023, the Company adopted ASU No.2016-13 “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASC Topic 326”). Management also periodically evaluates individual customer’s financial condition, credit history, and the current economic conditions to make adjustments in the allowance when it is considered necessary. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company’s management continues to evaluate the reasonableness of the valuation allowance policy and update it if necessary. As of December 31, 2024 and March 31, 2024, the Company record allowance for credit losses of $1,529 and $1,545 against accounts receivable, respectively. (h) Finance lease receivables
Finance lease receivables, which result from sales-type leases, are measured at discounted present value of (i) future minimum lease payments, (ii) any residual value not subject to a bargain purchase option as finance lease receivables on its balance sheet and (iii) accrued interest on the balance of the finance lease receivables based on the interest rate inherent in the applicable lease over the term of the lease. Management also periodically evaluates individual customer’s financial condition, credit history and the current economic conditions to make adjustments in the allowance for credit losses when necessary. Finance lease receivables is charged off against the allowance for credit losses after all means of collection have been exhausted and the potential for recovery is considered remote. As of December 31, 2024 and March 31, 2024, the Company determined allowance for credit losses was necessary for finance lease receivables.
As of December 31, 2024 and March 31, 2024, finance lease receivables consisted of the following:
Future scheduled minimum lease payments for investments in sales-type leases as of December 31, 2024 are as follows:
(i) Property and equipment, net
Property and equipment primarily consist of leasehold improvements, computer equipment, office equipment, fixtures and furniture and automobiles, which are stated at cost less accumulated depreciation and amortization less any provision required for impairment in value. Depreciation and amortization is computed using the straight-line method with no residual value based on the estimated useful life. The useful life of property and equipment is summarized as follows:
The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An asset is considered impaired if its carrying amount exceeds the future net undiscounted cash flows that the asset is expected to generate. If such asset is considered to be impaired, the impairment recognized is the amount by which the carrying amount of the asset, if any, exceeds its fair value determined using a discounted cash flow model. For the three and nine months ended December 31, 2024 and 2023, the Company did not recognize impairment for property and equipment.
Costs of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The cost and related accumulated depreciation and amortization of assets disposed of or retired are removed from the accounts, and any resulting gain or loss is reflected in the unaudited condensed consolidated statements of operations and comprehensive loss. (j) Loss per share
Basic loss per share is computed by dividing net loss attributable to stockholders by the weighted average number of outstanding shares of common stock, adjusted for outstanding shares of common stock that are subject to repurchase.
For the calculation of diluted loss per share, net loss attributable to stockholders for basic loss per share is adjusted by the effect of dilutive securities, including share-based awards, under the treasury stock method and convertible securities under the if-converted method. Potentially dilutive securities, of which the amounts are insignificant, have been excluded from the computation of diluted net loss per share if their inclusion is anti-dilutive.
As of December 31, 2024, the Company’s dilutive securities from the outstanding series A convertible preferred stock are convertible into 495,706 shares of common stock. This amount is not included in the computation of dilutive loss per share because their impact is anti-dilutive.
(k) Derivative liabilities
A contract is designated as an asset or a liability and is carried at fair value on the Company’s balance sheet, with any changes in fair value recorded in the Company’s results of operations. The Company then determines which options, warrants and embedded features require liability accounting and records the fair value as a derivative liability. The changes in the values of these instruments are shown in the unaudited condensed consolidated statements of operations and comprehensive loss as “change in fair value of derivative liabilities”.
(l) Revenue recognition
The Company recognized its revenue under Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (ASC 606). ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. It also requires the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer.
To achieve that core principle, the Company applies the five steps defined under ASC 606: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation.
The Company accounts for a contract with a customer when the contract is entered into by the parties, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration to collect is substantially probable. Disaggregated information of revenues by business lines are as follows:
Automobile transaction and related services
Operating lease revenues from automobile rentals –The Company generates revenue from sub-leasing automobiles to some online ride-hailing drivers or third-parties and leasing its own automobiles. The Company recognizes revenue wherein an automobile is transferred to the lessees and the lessees has the ability to control the asset, is accounted for under ASC Topic 842. Rental transactions are satisfied over the rental period and is recognized over time. As the operating lease revenue are variable in nature which is based on online ride-hailing drivers or third-parties’ performance for a certain period, the Company recognized the revenue from operating lease by using the output method based on periodic settlement between the Company and the online ride-hailing drivers or third-parties when such revenue is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Rental periods are short term in nature, generally are twelve months or less.
Service fees from NEVs leasing and automobile purchase services - Services fees from NEVs leasing are paid by some lessees who rent new energy electric vehicles from the Company, which based on the product solutions.
Automobile purchase services are paid by automobile purchasers 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, which is based on the sales price of the automobiles and relevant services provided.
Monthly services commissions – Commissions from the services generated from the management and related services provided to Partner Platforms and other companies, which are settled on a monthly basis. The Company recognizes revenues at a point in time when performance obligations are completed and the commission amount is confirmed by the Partner Platforms and other companies, based on their evaluations on the services provided by the Company.
Financing revenues – Interest income from the lease arising from the Company’s sales-type leases and bundled lease arrangements are recognized as financing revenues over the lease term based on the effective rate of interest in the lease.
The Company recognizes those revenues at a point in time when above mentioned services are completed, and corresponding an automobile is delivered to the lessee or purchaser. Accounts receivable related to the revenue from NEVs leasing and automobile purchase services is collected upon the automobiles are delivered to lessees or purchaser.
Other revenues – The Company generated other revenues such as miscellaneous service fees charged to its customers for some supporting services provided to online ride-hailing drivers and sales of automobiles. The Company recognizes revenues at a point in time when performance obligations are completed and the collectability is probable from the customers. Leases - Lessor
The Company recognized revenue as lessor in accordance with ASC 842. The two primary accounting provisions the Company uses to classify transactions as sales-type or operating leases are: (i) a review of the lease term to determine if it is for the major part of the economic life of the underlying equipment (defined as greater than 75)%; and (ii) a review of the present value of the lease payments to determine if they are equal to or greater than substantially all of the fair market value of the equipment at the inception of the lease (defined as greater than 90%). Automobiles included in arrangements meeting these conditions are accounted for as sales-type leases. Interest income from the lease is recognized in financing revenues over the lease term. Automobile included in arrangements that do not meet these conditions are accounted for as operating leases and revenue is recognized over the term of the lease.
The Company excludes from the measurement of its lease revenues any tax assessed by a governmental authority that is both imposed on and concurrent with a specific revenue-producing transaction and collected from a customer.
The Company considers the economic life of most of the automobiles to be to years, since this represents the most common long-term lease term for its automobiles and the automobiles will be used for online ride-hailing services. The Company believes three to years is representative of the period during which an automobile is expected to be economically usable, with normal service, for the purpose for which it is intended.
The Company’s lease pricing interest rates, which are used in determining customer payments in a bundled lease arrangement, are developed based upon the local prevailing rates in the marketplace where its customer will be able to obtain an automobile loan under similar terms from the bank. The Company reassesses its pricing interest rates quarterly based on changes in the local prevailing rates in the marketplace. As of December 31, 2024, the Company’s pricing interest rate was 6.0% per annum.
(m) Discontinued operations
A discontinued operation may include a component of an entity or a group of components of an entity, or a business or nonprofit activity. A disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operation if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when any of the following occurs: (1) the component of an entity or group of components of an entity meets the criteria to be classified as held for sale; (2) the component of an entity or group of components of an entity is disposed of by sale; (3) the component of an entity or group of components of an entity is disposed of other than by sale (for example, by abandonment or in a distribution to owners in a spinoff).
(n) Significant risks and uncertainties
The Company’s operations are carried out entirely in mainland China. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the social, political, economic and legal environments in the PRC as well as by the general state of the PRC economy. In addition, the Company’s business may be influenced by changes in PRC government laws, rules and policies with respect to, among other matters, anti-inflationary measures, currency conversion and remittance of currency outside of China, rates and methods of taxation and other factors.
Historically, most of the automobile purchasers would pay the Company their previously defaulted amounts within one to three months. As a result, the Company would provide full provisions on accounts receivable if the customers default on repayments for over three and nine months. As of December 31, 2024 and March 31, 2024, the Company record allowance for credit losses of $1,529 and $1,545 against accounts receivable, respectively.
As of December 31, 2024 and March 31, 2024 substantially all of the Company’s operating activities and major assets and liabilities, except for the cash deposit of approximately $71,000 and $21,000, respectively, in U.S. dollars, are denominated in RMB, which are not freely convertible into foreign currencies. All foreign exchange transactions take place through either the People’s Bank of China (the “PBOC”) or other authorized financial institutions at exchange rates quoted by PBOC. Approval of foreign currency payments by the PBOC or other regulatory institutions requires a payment application together with invoices and signed contracts. The value of RMB is subject to change in central government policies and international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. When there is a significant change in value of RMB, the gains and losses resulting from translation of financial statements of a foreign subsidiary will be significantly affected. RMB depreciated from 7.22 RMB into US$1.00 on March 31, 2024 to 7.30 RMB into US$1.00 on December 31, 2024.
(o) Comparability and reclassification adjustments
The Company has reclassified certain comparative balances in the consolidated balance sheets as of March 31, 2024 and certain comparative amounts in the unaudited condensed consolidated statements of operations and comprehensive loss for the three and nine months ended December 31, 2023 to conform to the current period’s presentation. The assets and liabilities of the discontinued operations have been classified as current assets of discontinued operations, property and equipment, net of discontinued operations, other assets of discontinued operations, current liabilities of discontinued operations, and other liabilities of discontinued operations in the consolidated balance sheets as of March 31, 2024. The results of discontinued operations for the three and nine months ended December 31, 2023 have been reflected separately in the unaudited condensed consolidated statements of operations and comprehensive loss as a single line item for all periods presented in accordance with U.S. GAAP. Cash flows from discontinued operations of the three categories for the nine months ended December 31, 2023 were separately presented in the unaudited condensed consolidated statements of cash flows for all periods presented in accordance with U.S. GAAP.
(p) Recent accounting pronouncements not yet adopted
The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies. In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements — codification amendments in response to SEC’s disclosure Update and Simplification initiative which amend the disclosure or presentation requirements of codification subtopic 230-10 Statement of Cash Flows—Overall, 250-10 Accounting Changes and Error Corrections— Overall, 260-10 Earnings Per Share— Overall, 270-10 Interim Reporting— Overall, 440-10 Commitments—Overall, 470-10 Debt—Overall, 505-10 Equity—Overall, 815-10 Derivatives and Hedging—Overall, 860-30 Transfers and Servicing—Secured Borrowing and Collateral, 932-235 Extractive Activities— Oil and Gas—Notes to Financial Statements, 946-20 Financial Services— Investment Companies— Investment Company Activities, and 974-10 Real Estate—Real Estate Investment Trusts—Overall. The amendments represent changes to clarify or improve disclosure and presentation requirements of above subtopics. Many of the amendments allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the SEC’s requirements. Also, the amendments align the requirements in the Codification with the SEC’s regulations. For entities subject to existing SEC disclosure requirements or those that must provide financial statements to the SEC for securities purposes without contractual transfer restrictions, the effective date aligns with the date when the SEC removes the related disclosure from Regulation S-X or Regulation S-K. Early adoption is not allowed. For all other entities, the amendments will be effective two years later from the date of the SEC’s removal. The Company is currently evaluating the impact of the update on the Company’s unaudited condensed consolidated financial statements and related disclosures.
In November 2023, the FASB issued ASU 2023-07, which is an update to Topic 280, Segment Reporting: Improvements to reportable Segment Disclosures (“ASU 2023-07”), which enhances the disclosure required for reportable segments in annual and interim consolidated financial statements, including additional, more detailed information about a reportable segment’s expenses. ASU 2023-07 will be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of the pending adoption of AUS 2023-07 on its unaudited condensed consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, which is an update to Topic 740, Income Taxes. The amendments in this update enhances the transparency and decision usefulness of income tax disclosures. ASU 2023-09 will be effective for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this Update should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating the impact the adoption of ASU 2023-07 will have on its annual and interim disclosures. |
Discontinued Operations |
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Discontinued Operations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DISCONTINUED OPERATIONS | 4. DISCONTINUED OPERATIONS
Discontinued operations - P2P lending services business
Since October 2019, the Company has discontinued its online P2P lending services business. Carrying amounts of major classes of liabilities was included as part of discontinued operations of Online P2P lending services, whose change was due to the effect of exchange rate changes as of December 31, 2024 and March 31, 2024:
Discontinued operations – Online ride-hailing platform service
The Company used to operate online ride-hailing platform services through its own platform from October 2020 to August 2024, through XXTX, which was a wholly owned subsidiary of Senmiao Zecheng, a wholly-owned subsidiary of the Company. On August 8, 2024, Senmiao Consulting entered into a certain Acquisition Agreement with Debt Assumption Takeover (the “Acquisition Agreement”) with Jiangsu Yuelaiyuexing Technology Co., Ltd. (the “Purchaser”), and other parties thereto, in connection with the acquisition (the “Acquisition”) by the Purchaser of 100% of the Company’s equity interest in XXTX and its subsidiaries. On August 20, 2024, the Acquisition was completed and the Company disposed of its 100% equity interest in XXTX and its subsidiaries to the Purchaser, effectively discontinued its operations in the online ride-hailing platform service segment. This decision was driven by recurring losses in the segment, which prompted the Company to strategically exit the online ride-hailing business. The Company recognized a gain of $397,775 from the deconsolidation of XXTX accordingly. In accordance with ASC 205-20-45, the discontinuation of the Company’s online ride-hailing platform service was accounted for as a discontinued operation, as it represented a strategic shift with a significant impact on the Company’s overall operations and financial results. Reconciliation of the carrying amounts of major classes of assets and liabilities from discontinued operations of online ride-hailing platform service in consolidated balance sheets as of December 31, 2024 and March 31, 2024 are as follows:
The following table sets forth the reconciliation of the amounts of major classes of income and losses from discontinued operations of online ride-hailing platform service in the unaudited condensed consolidated statements of operations and comprehensive loss for the three and nine months ended December 31, 2024 and 2023.
Reconciliation of the amount of cash flows from discontinued operations in the unaudited condensed consolidated statements of cash flows for the nine months ended December 31, 2024 and 2023 are as follows:
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ACCOUNTS RECEIVABLE, NET | 5. ACCOUNTS RECEIVABLE, NET
Accounts receivable includes rental receivables due from operating lessees. It also includes a portion of bundled lease arrangements on fixed minimum monthly payments to be paid by the automobile purchasers arising from automobile sales and services fees, net of unearned interest income, discounted using the Company’s lease pricing interest rates.
As of December 31, 2024 and March 31, 2024, accounts receivable were comprised of the following:
Movement of allowance for credit losses for the nine months ended December 31, 2024 and for year ended March 31, 2024 are as follows:
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PREPAYMENTS, OTHER RECEIVABLES AND OTHER CURRENT ASSETS, NET | 6. PREPAYMENTS, OTHER RECEIVABLES AND OTHER CURRENT ASSETS, NET
As of December 31, 2024 and March 31, 2024, the prepayments, other receivables and other current assets, net were comprised of the following:
Movement of allowance for credit losses for the nine months ended December 31, 2024 and for year ended March 31, 2024 are as follows:
The balance of deposits mainly represented the security deposit made by the Company to various automobile leasing companies, financial institutions and Didi Chuxing Technology Co., Ltd., who runs an online ride-hailing platform. As of December 31, 2024 and March 31, 2024, the allowance for credit losses of $17,648 and $17,841 was recorded against the security deposits not returned for more than one year after the end of the cooperation.
The balance of prepaid expense represented automobile purchase prepayments, automobile liability insurance premium for automobiles for operating lease and other miscellaneous expense such as office lease, office remodel expense, etc. that will expire within one year.
The balance represented the amount of VAT, which resulted from historical purchasing activities and could be further used for deducting future VAT in PRC.
The balance due from automobile purchasers represented the payments of automobiles and related insurances and taxes made on behalf of the automobile purchasers. The balance is expected to be collected from the automobile purchasers in installments. As of December 31, 2024 and March 31, 2024, the allowance for credit losses recorded against receivables due from automobile purchasers was $2,604 and $2,633. |
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PROPERTY AND EQUIPMENT, NET | 7. PROPERTY AND EQUIPMENT, NET
Property and equipment as of December 31, 2024 and March 31, 2024 consist of the following:
Depreciation expense for the three and nine months ended December 31, 2024 were amounted to $226,353 and $689,794, respectively.
Depreciation and amortization expense for the three and nine months ended December 31, 2023 were amounted to $242,427 and $697,485, respectively. |
Intangible Assets, Net |
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INTANGIBLE ASSETS, NET | 8. INTANGIBLE ASSETS, NET
Intangible assets as of December 31, 2024 and March 31, 2024 consisted of the following:
Amortization expense for the three and nine months ended December 31, 2024 were amounted to $18,750 and $56,278, respectively.
Amortization expense for the three and nine months ended December 31, 2023 were amounted to $45,731 and $86,201, respectively.
The following table sets forth the Company’s amortization expense for the next five years as of December 31, 2024:
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OTHER NON-CURRENT ASSETS | 9. OTHER NON-CURRENT ASSETS
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Accrued Expenses and Other Liabilities |
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ACCRUED EXPENSES AND OTHER LIABILITIES | 10. ACCRUED EXPENSES AND OTHER LIABILITIES
The balance of payables to drivers from aggregation platforms represented the amount the Company collected on behalf of drivers who completed their transaction through the Company’s online ride-hailing platform base on the confirmed billings.
The balance of deposits represented the security deposit from operating and finance lease customers to cover lease payment and related automobile expense in case the customers’ accounts are in default. The balance is refundable at the end of the lease term, after deducting any missed lease payment and applicable fee.
The balance of accrued expenses represented the unbilled or payable balances to the expenses related to the daily operations of automobiles and services fees to professional institutions. |
Employee Benefit Plan |
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Dec. 31, 2024 | |
Employee Benefit Plan [Abstract] | |
EMPLOYEE BENEFIT PLAN | 11. EMPLOYEE BENEFIT PLAN
The Company has made employee benefit plan in accordance with relevant PRC regulations, including retirement insurance, unemployment insurance, medical insurance, housing fund, work injury insurance and maternity insurance.
The contributions made by the Company were $33,518 and $111,329 for the three and nine months ended December 31, 2024, respectively, from operations of the Company. The contributions made by the Company were $43,786 and $135,551 for the three and nine months ended December 31, 2023, respectively, from operations of the Company.
As of December 31, 2024 and March 31, 2024, the Company did not make adequate employee benefit contributions in the amount of $950,202 and $928,943, respectively. |
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EQUITY | 12. EQUITY
Warrants
Warrants in Offerings
The Company adopted the provisions of ASC 815 on determining what types of instruments or embedded features in an instrument held by a reporting entity can be considered indexed to its own stock for the purpose of evaluating the first criteria of the scope exception in ASC 815. Warrants issued in connection with the direct equity offering with exercise prices denominated in US dollars are no longer considered indexed to the Company’s stock, as their exercise prices are not in the Company’s functional currency (RMB), and therefore no longer qualify for the scope exception and must be accounted for as a derivative. These warrants are classified as liabilities under the caption “Derivative liabilities” in the unaudited condensed consolidated statements of balance sheets and recorded at estimated fair value at each reporting date, computed using the Black-Scholes valuation model. Changes in the liability from period to period are recorded in the unaudited condensed consolidated statements of operations and comprehensive loss under the caption “Change in fair value of derivative liabilities.”
August 2020 Underwriters’ Warrants
As of December 31, 2024 and March 31, 2024, there were 31,808 underwriters’ warrants outstanding. During the three and nine months ended December 31, 2024, the change of fair value was a gain of $1,630 and $2,654 recognized in the unaudited condensed consolidated statements of operations and comprehensive loss based on the decrease in fair value of the liabilities, respectively. During the three and nine months ended December 31, 2023, the change of fair value was a gain of $774 and $7,577 recognized in the unaudited condensed consolidated statements of operations and comprehensive loss based on the decrease in fair value of the liabilities, respectively. As of December 31, 2024 and March 31, 2024, the fair value of the derivative instrument totaled $565 and $3,219, respectively. As the 1-for-10 reverse stock split on the Company’s common stock became effective on April 6, 2022, the exercise price of the August 2020 Underwriters’ Warrants was adjusted to $6.25.
February 2021 Registered Direct Offering Warrants
As of December 31, 2024 and March 31, 2024, there were 53,262 February 2021 registered direct offering warrants outstanding. During the three and nine months ended December 31, 2024, the change of fair value was a gain of $2,077 and $3,125 recognized in the unaudited condensed consolidated statements of operations and comprehensive loss based on the decrease in fair value of the liabilities, respectively. During the three and nine months ended December 31, 2023, the change of fair value was a gain of $986 and $10,266 recognized in the unaudited condensed consolidated statements of operations and comprehensive loss based on the decrease in fair value of the liabilities, respectively. As of December 31, 2024 and March 31, 2024, the fair value of the derivative instrument totaled $1,208 and $4,333, respectively. As the 1-for-10 reverse stock split on the Company’s common stock became effective on April 6, 2022, the exercise prices of the Placement Agent Warrants and the ROFR Warrants of the February 2021 Registered Direct Offering were adjusted to $13.80 and $17.25, respectively.
May 2021 Registered Direct Offering Warrants
As of December 31, 2024 and March 31, 2024, there were 594,682 May 2021 registered direct offering warrants outstanding. During the three and nine months ended December 31, 2024, the change of fair value was a gain of $40,663 and $45,085 recognized in the unaudited condensed consolidated statements of operations and comprehensive loss based on the decrease in fair value of the liabilities, respectively. During the three and nine months ended December 31, 2023, the change of fair value was a gain of $15,942 and $148,067 recognized in the unaudited condensed consolidated statements of operations and comprehensive loss based on the decrease in fair value of the liabilities, respectively. As of December 31, 2024 and March 31, 2024, the fair value of the derivative instrument totaled $41,599 and $86,684, respectively. As the 1-for-10 reverse stock split on the Company’s common stock became effective on April 6, 2022, the exercise price of the May 2021 Registered Direct Offering warrants was adjusted to $10.50. November 2021 Private Placement Warrants
As of December 31, 2024 and March 31, 2024, there were 5,365,911 November 2021 Private Placement Warrants outstanding. During the three and nine months ended December 31, 2024, the change of fair value was a gain of $76,944 and $55,036 recognized in the unaudited condensed consolidated statements of operations and comprehensive loss based on the decrease in fair value of the liabilities, respectively. During the three and nine months ended December 31, 2023, the change of fair value was a gain of $28,486 and $244,111 recognized in the unaudited condensed consolidated statements of operations and comprehensive loss based on the decrease in fair value of the liabilities, respectively. On November 18, 2022, a holder of November 2021 private placement warrants exercised the warrants on a “cashless” basis. As of December 31, 2024 and March 31, 2024, the fair value of the derivative instrument totaled $139,561 and $194,597, respectively. As the 1-for-10 reverse stock split on the Company’s common stock became effective on April 6, 2022, the exercise price of the November 2021 Investors Warrants was adjusted to $1.13.
Restricted Stock Units
On October 29, 2020, the Board approved the issuance of an aggregate of 127,273 restricted stock units (“RSUs”) to directors, officers and certain employees as stock compensation for their services for the years ended March 31, 2022. Total RSUs granted to these directors, officers and employees were valued at an aggregate fair value of $140,000. These RSUs will vest in four equal quarterly installments on January 29, 2021, April 29, 2021, July 29, 2021 and October 29, 2021 or in full upon the occurrence of a change in control of the Company, provided that the director, officer or the employee remains in service through the applicable vesting date. The RSUs will be settled by the Company’s issuance of shares of common stock in certificated or uncertificated form upon the earlier of (i) vesting date, (ii) a change in control and (ii) termination of the services of the director, officer or employee due to a “separation of service” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended, or the death or disability of such director, officer or employee. As of the filing date of these unaudited condensed consolidated financial statements, all RSUs with an aggregate of 12,727 was vested and 9,545 was settled by the Company. The Company expects to settle the remaining vested RSUs by issuance of shares of common stock before December 31, 2025 and the vested RSUs have been accounted in an expense and additional paid-in capital.
Equity Incentive Plan
At the 2018 Annual Meeting of Stockholders of the Company held on November 8, 2018, the Company’s stockholders approved the Company’s 2018 Equity Incentive Plan for employees, officers, directors and consultants of the Company and its affiliates. In March 2023 and April 2024, the Annual Meeting of Stockholders of Company for the years ended March 31, 2022 and 2023 further approved the amendments to the 2018 Equity Incentive Plan, to increase the number of shares of common stock reserved under the Plan to 1,500,000 shares and 1,800,000 shares, respectively. A committee consisting of at least two independent directors would be appointed by the Board or in the absence of such a committee, the board of directors, will be responsible for the general administration of the Equity Incentive Plan. All awards granted under the Equity Incentive Plan will be governed by separate award agreements between the Company and the participants. As of December 31, 2024, the Company has granted an aggregate of 30,379 RSUs (after reverse split), among which, 26,447 RSUs were issued under the Equity Incentive Plan, 3,182 RSUs were vested but have not been issued while 750 RSUs were forfeited due to two directors ceased to serve on the board of the Company since November 8, 2018. During the three and nine months ended December 31, 2024, new RSUs were granted. Conversion Price Adjustment for November 2021 Preferred Shares
Pursuant to the Certificate of Designation for the series A convertible preferred stock signed by the Company and certain institutional investors in November 2021 Private Placement, the initial conversion price of the series A Convertible Preferred Shares was $0.68. If as of the applicable date the conversion price then in effect is greater than the greater of (1) $0.41 (the “Floor Price”) (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events) and (2) 85% of the closing bid price on the applicable date (the “Adjustment Price”), the conversion price shall automatically lower to the Adjustment Price accordingly. As the 1-for-10 reverse stock split on the Company’s Common Stock became effective on April 6, 2022, the conversion price and the Floor Price of the Preferred Shares mentioned above were proportionally adjusted. Further, on August 9, 2022, the Company and the investors agreed to reduce the conversion price of the series A Convertible Preferred Shares from $4.10 to $2.00 and to increase the number of the shares of common stock that are available to be issued upon conversion of the Preferred Shares from 1,092,683 to 2,240,000. As of December 31, 2024 and March 31, 2024, there were 991 shares of Series A convertible preferred stock outstanding, respectively, valued at $234,364 recorded as mezzanine equity. As of December 31, 2024, 4,009 shares of Series A convertible preferred stock were converted into 1,871,125 shares of the Company’s common stock. |
Income Taxes |
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Income Taxes [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | 13. INCOME TAXES
The United States of America
The Company is incorporated in the State of Nevada in the U.S., and is subject to U.S. federal corporate income taxes with tax rate of 21%. The State of Nevada does not impose any state corporate income tax.
On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act imposes a one-time transition tax on deemed repatriation of historical earnings of foreign subsidiaries, and future foreign earnings are subject to U.S. taxation. The Tax Act also established the Global Intangible Low-Taxed Income (GILTI), a new inclusion rule affecting non-routine income earned by foreign subsidiaries. For the three and nine months ended December 31, 2024 and 2023, the Company’s foreign subsidiaries in China were operating at loss and as such, did not record a liability for GILTI tax.
The Company’s net operating loss for U.S. income taxes from U.S amounted to approximately $0.2 million and $0.7 million for the three months ended December 31, 2024 and 2023, and amounted to approximately $0.8 million and $1.3 million for the nine months ended December 31, 2024 and 2023. As of December 31, 2024 and March 31, 2024, the Company’s net operating loss carryforward for U.S. income taxes was approximately $8.3 million and $7.6 million, respectively. The net operating loss carryforward will not expire and is available to reduce future years’ taxable income but limited to 80% of income until utilized. Management believes that the utilization of the benefit from this loss appears uncertain due to the Company’s operating history. Accordingly, the Company has recorded a 100% valuation allowance on the deferred tax asset to reduce the deferred tax assets to zero on the consolidated balance sheets. Management reviews the valuation allowance periodically and makes changes accordingly.
PRC
Senmiao Consulting, Sichuan Senmiao Ronglian Technology Co., Ltd. (“Sichuan Senmiao”), Hunan Ruixi, Sichuan Senmiao Yicheng Assets Management Co., Ltd. (“Yicheng”), Corenel, and Jiekai are subject to PRC Enterprise Income Tax (“EIT”) on the taxable income in accordance with the relevant PRC income tax laws. The EIT rate for companies operating in the PRC is 25%. Net loss before income tax by jurisdiction as follows:
For the three and nine months ended December 31, 2024 and 2023, the Company had no current tax expense or deferred tax expense.
The tax effects of temporary differences from continuing operations that give rise to the Company’s deferred tax assets and liabilities are as follows:
As of both December 31, 2024 and March 31, 2024, the Company’s PRC entities associated with discontinued operations had net operating loss carryforwards of approximately $0.9 million. Despite the fact that the net operating loss carryforwards arose from the Company discontinued operation, the Company may still benefit from them as potential deduction against future taxable income. As of December 31, 2024, such net operating loss from discontinued operations will expire from 2025 through 2026, if not used. The Company reviews deferred tax assets for a valuation allowance based upon whether it is more likely than not that the deferred tax asset will not be fully realized. As of December 31, 2024 and March 31, 2024, full valuation allowance is provided against the deferred tax assets related to the Company’s discontinued operations based upon management’s assessment as to their realization.
The tax effects of temporary differences from discontinued operations that give rise to the Company’s deferred tax assets are as follows:
Uncertain tax positions
The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of December 31, 2024 and March 31, 2024, the Company did not have any unrecognized uncertain tax positions and the Company does not believe that its unrecognized tax benefits will change over the next twelve months. For the three and nine months ended December 31, 2024 and 2023, the Company did not incur any interest and penalties related to potential underpaid income tax expenses. According to PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or withholding agent. The statute of limitations will be extended five years under special circumstances, which are not clearly defined (but an underpayment of tax liability exceeding RMB0.1 million is specifically listed as a special circumstance). In the case of a related party transaction, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion. |
Concentration |
9 Months Ended |
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Dec. 31, 2024 | |
Concentration [Abstract] | |
CONCENTRATION | 14. CONCENTRATION
Major Suppliers
For the three months ended December 31, 2024, three suppliers accounted for approximately 16.6%, 13.8%, and 13.5% of the total costs of revenue from continuing operations of the Company. For the nine months ended December 31, 2024, three suppliers accounted for approximately 18.1%, 15.0%, and 14.7% of the total costs of revenues from the continuing operations of the Company.
For the three months ended December 31, 2023, four suppliers accounted for approximately 21.3%, 20.7%, 15.4% and 10.0% of the total costs of revenue from continuing operations of the Company. For the nine months ended December 31, 2023, three suppliers accounted for approximately 20.5%, 17.3% and 14.4% of the total cost of revenues from the continuing operations of the Company. |
Related Party Transactions and Balances |
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RELATED PARTY TRANSACTIONS AND BALANCES | 15. RELATED PARTY TRANSACTIONS AND BALANCES
1. Related Party Balances
1) Prepayment, a related party
As of December 31, 2024 and March 31, 2024, the balance of prepayment to a related party represented automobile lease prepayment made by the Company to Jinkailong, the Company’s equity investee company, with amount of $34,825 and , respectively.
2) Due from related parties
As of December 31, 2024 and March 31, 2024, balances due from related parties from the Company’s operations were comprised of the following:
As of December 31, 2024, balances due from Jinkailong, the Company’s equity investee company, was $2,847,738, net of allowance for credit losses, of which, $2,765,537 is to be repaid over a period from January 2026 to December 2026, which was classified as due from a related party, net, non-current. The balances due from Jinkailong consist of outstanding balance of $1,867,591 as a result of Jinkailong’s deconsolidation on March 31, 2022 and $980,147 represents daily operation expenses paid by the Company’s subsidiary, Jiekai, on behalf of Jinkailong.
As of March 31, 2024, balances due from Jinkailong, the Company’s equity investee company was $3,245,907, net of allowance for credit losses, of which, $2,747,313 is to be repaid over a period from April 2025 to December 2026, which was classified as due from a related party, net, non-current. The balances due from Jinkailong consist of outstanding balance of $2,651,078 as a result of Jinkailong’s deconsolidation on March 31, 2022 and $594,829 represents revenue collected by Jinkailong on behalf of the Company’s subsidiary, Jiekai. Movement of allowance for credit losses due from Jinkailong for the nine months ended December 31, 2024 and for the year ended March 31, 2024 are as follows:
On January 3, 2024, Xiang Hu, the Legal Representative of Sichuan Senmiao and a shareholder of the Company, entered into a loan agreement wherein the Company agreed to provide an interest-free special reserve loan of $150,000 for a period of 12 months. As December 31, 2024, the outstanding balance was $81,500.
3) Due to related parties
4) Operating lease right-of-use assets - a related party and Operating lease liabilities - a related party
In November 2018, Hunan Ruixi entered into an office lease agreement with Hunan Dingchentai Investment Co., Ltd. (“Dingchentai”), a company where one of the Company’s independent directors serves as the legal representative and general manager. The term of the lease agreement was from November 1, 2018 to October 31, 2023 and the rent was approximately $44,250 per year, payable on a quarterly basis. The original lease agreement with Dingchentai was terminated on July 1, 2019. The Company entered into another lease with Dingchentai on substantially similar terms on September 27, 2019, and a renewal lease contract was signed on June 2022 which extended the original lease to May 2025. 2. Related Party Transactions
For the three and nine months ended December 31, 2024, the Company incurred $0 and $4,516, respectively, in rental expenses to Hong Li, supervisor of Sichuan Senmiao, pursuant to three office lease agreements. For the three and nine months ended December 31, 2023, the Company incurred $31,859 and $92,142, respectively, in rental expenses to Hong Li, supervisor of Sichuan Senmiao, pursuant to three office lease agreements.
For the three and nine months ended December 31, 2024, the Company incurred $10,462 and $31,348 in rental expenses, respectively, compared to $10,896 and $31,514 for the same periods in 2023, to Dingchentai, a company where one of the Company’s independent directors serves as the legal representative and general manager.
During the three months ended December 31, 2024 and 2023, Corenel leased automobiles to Jinkailong and generated revenue of $2,882 and $7,133, while Jiekai leased automobiles from Jinkailong and had a rental cost of $44,479 and $80,973 respectively.
During the nine months ended December 31, 2024 and 2023, Corenel leased automobiles to Jinkailong and generated revenue of $11,747 and $29,280, while Jiekai leased automobiles from Jinkailong and had a rental cost of $63,440 and $473,317 respectively. |
Leases |
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LEASES | 16. LEASES
Lessor
The Company’s operating leases for automobile rentals have rental periods that are typically short term, generally is twelve months or less. Revenue recognition section of Note 3 (l), the Company discloses that revenue earned from automobile rentals, wherein an identified asset is transferred to the customer and the customer has the ability to control that asset, is accounted for under Topic 842 upon adoption for the three and nine months ended December 31, 2024.
Lessee
As of December 31, 2024 and March 31, 2024, the Company has engaged in offices and showroom leases which were classified as operating leases.
The Company leased automobiles under operating lease agreements with a term shorter than twelve months which it elected not to recognize lease assets and lease liabilities under ASC 842. Instead, the Company recognized the lease payments in profit or loss on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred. In addition, the Company had automobiles leases which were classified as finance lease.
The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The Company recognized lease expense on a straight-line basis over the lease term for operating lease. Meanwhile, the Company recognized the finance leases ROU assets and interest on an amortized cost basis. The amortization of finance ROU assets is recognized on a straight-line basis as amortization expense, while the lease liability is increased to reflect interest on the liability and decreased to reflect the lease payments made during the period. Interest expense on the lease liability is determined each period during the lease term as the amount that results in a constant periodic interest rate of the automobile loans on the remaining balance of the liability.
As of December 31, 2024, the weighted-average remaining operating and finance lease term of its existing leases is approximately 0.41 and 0.78 years, respectively. Operating and finance lease expenses consist of the following:
Operating lease costs for automobiles totaled $273,446 and $400,082 for the three months ended December 31, 2024 and 2023, respectively. Operating lease cost for automobiles totaled $755,476 and $1,460,938 for the nine months ended December 31, 2024 and 2023, respectively.
Operating lease expenses for offices and showroom leases totaled $14,647 and $56,486 for the three months ended December 31, 2024 and 2023, respectively, of which $10,168 and $48,816 were amortization of leased asset for operating leases for the three months ended December 31, 2024 and 2023, respectively. Operating lease expense for office and showroom leases totaled $66,170 and $182,258 for the nine months ended December 31, 2024 and 2023 respectively, of which $43,639 and $141,995 were amortization of leased asset for operating leases for the nine months ended December 31, 2024 and 2023, respectively.
Interest expenses on finance leases totaled $3,365 and $12,723 for the three and nine months ended December 31, 2024, respectively. Interest expenses on finance leases totaled $6,791 and $23,107 for the three and nine months ended December 31, 2023, respectively.
The following table sets forth the Company’s minimum lease payments in future periods:
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Commitments and Contingencies |
9 Months Ended |
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Dec. 31, 2024 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 17. COMMITMENTS AND CONTINGENCIES
Contingencies
In measuring the credit risk of automobile purchasers, the Company primarily reflects the “probability of default” by the automobile purchasers on its contractual obligations and considers the current financial position of the automobile purchasers and its likely future development.
The Company manages the credit risk of automobile purchasers by performing preliminary credit checks of each automobile purchaser and ongoing monitoring every month. By using the current credit loss model, management is of the opinion that the Company is bearing the credit risk to repay the principal and interests to the financial institutions if automobile purchasers’ default on their payments for more than three months. Management also periodically re-evaluates probability of default of automobile purchasers to make adjustments in the allowance, when necessary.
Purchase commitments
On September 23, 2022, the Company entered into a purchase contract with an automobile dealer to purchase a total of 100 automobiles for the amount of approximately $1.5 million. As of the filing date of these unaudited condensed consolidated financial statements, the Company has remitted approximately $0.6 million as purchase prepayments, and expects to fulfill the purchase commitment before March 31, 2025.
Contingent liability of Jinkailong
Pursuant to the Regulations of the State Council on Implementing the Management System for Registered Capital Registration in the Company Law of the People's Republic of China issued on July 1, 2024 (the “Registered Capital Registration Implementing Rules”), as Jinkailong was registered and established before June 30, 2024, its shareholders should fully pay their unpaid subscribed capital before June 30, 2032. As of December 31, 2024, Hunan Ruixi holds 35% of equity interest of Jinkailong and has not made any payments towards to the investment amounted to RMB3.5 million (approximately $479,000). According to the Registered Capital Registration Implementing Rules, Hunan Ruixi shall pay the subscribed capital of Jinkailong before June 30, 2032. |
Subsequent Events |
9 Months Ended |
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Dec. 31, 2024 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 18. SUBSEQUENT EVENTS
The Company evaluated all events and transactions that occurred after December 31, 2024 up through the date the Company filed these unaudited condensed consolidated financial statements. No events require adjustment to or disclosure in the unaudited condensed consolidated financial statements. |
Accounting Policies, by Policy (Policies) |
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Summary of Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of presentation | (a) Basis of presentation The unaudited condensed consolidated financial statements, including the unaudited condensed consolidated balance sheets as of December 31, 2024, the unaudited condensed consolidated statements of operations and comprehensive loss, the unaudited condensed consolidated statements of changes in equity, and the unaudited condensed consolidated statements of cash flows for the nine months ended December 31, 2024 and 2023, as well as other information disclosed in the accompanying notes, have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and pursuant to the rules and regulations of the SEC and pursuant to Regulation S-X. The interim unaudited condensed consolidated financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and the notes thereto, included in the Form 10-K for the fiscal year ended March 31, 2024, which was filed with the SEC on June 27, 2024. The interim unaudited condensed consolidated financial statements and the accompanying notes have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the results of operations for the periods presented. The consolidated results of operations for any interim period are not necessarily indicative of the results to be expected for the full year or for any other future years or interim periods. |
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Foreign currency translation | (b) Foreign currency translation Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing on the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates on the date of the balance sheet. The resulting exchange differences are recorded in the statement of operations. The reporting currency of the Company and its subsidiaries is U.S. dollars (“US$”) and the unaudited condensed consolidated financial statements have been expressed in US$. However, the Company maintains the books and records in its functional currency, Chinese Renminbi (“RMB”), being the functional currency of the economic environment in which its operations are conducted. In general, for consolidation purposes, assets and liabilities of the Company and its subsidiaries whose functional currency is not the US$, are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of the Company and its subsidiaries are recorded as a separate component of accumulated other comprehensive loss within the unaudited condensed consolidated statements of changes in equity. Translation of amounts from RMB into US$ has been made at the following exchange rates for the respective periods:
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Use of estimates | (c) Use of estimates In presenting the unaudited condensed consolidated financial statements in accordance with U.S. GAAP, management makes estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. The Company bases its estimates on past experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Estimates are used when accounting for items and matters including, but not limited to, revenue recognition, residual values of property and equipment, lease liabilities, right-of-use assets, determinations of the useful lives and valuation of long-lived assets, estimates of allowances for credit losses for receivables and due from related parties, estimates of impairment of long-lived assets, and valuation of deferred tax assets. |
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Fair values of financial instruments | (d) Fair values of financial instruments Accounting Standards Codification (“ASC”) Topic 825, Financial Instruments (“Topic 825”) requires disclosure of fair value information of financial instruments, whether or not recognized in the balance sheets, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Topic 825 excludes certain financial instruments and all nonfinancial assets and liabilities from its disclosure requirements. Accordingly, the aggregate fair value amounts do not represent the underlying value of the Company. The three levels of valuation hierarchy are defined as follows: Level 1 Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value. The following table sets forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2024 and March 31, 2024:
The following is a reconciliation of the beginning and ending balance of the assets and liabilities measured at fair value on a recurring basis for the nine months ended December 31, 2024 and for the year ended March 31, 2024:
The August 2020 Underwriters’ Warrants, the February 2021 Placement Agent Warrants, the February 2021 ROFR Warrants, the May 2021 Investors Warrants, the May 2021 Placement Agent Warrants, and the November 2021 Investors Warrants and November 2021 Placement Agent Warrants (all discussed below) are not traded in an active securities market; therefore, the Company estimates the fair value to those warrants using the Black-Scholes valuation model as of December 31, 2024 and March 31, 2024.
As of December 31, 2024 and March 31, 2024, financial instruments of the Company comprised primarily current assets and current liabilities including cash and cash equivalents, restricted cash, accounts receivable, finance lease receivables, prepayments, other receivables and other assets, due from related parties, accounts payable, advance from customers, lease liabilities, accrued expenses and other liabilities, due to related parties, and operating and financing lease liabilities, which approximate their fair values because of the short-term nature of these instruments, and current liabilities of borrowings from a financial institution, which approximate their fair values because of the stated loan interest rate to the rate charged by similar financial institutions. The non-current portion of finance lease receivables, operating and financing lease liabilities were recorded at the gross amount adjusted for the interest using the effective interest rate method. The Company believes that the effective interest rates underlying these instruments approximate their fair values because the Company used its incremental borrowing rate to recognize the present value of these instruments as of December 31, 2024 and March 31, 2024. Other than as listed above, the Company did not identify any assets or liabilities that are required to be presented on the balance sheet at fair value. |
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Segment reporting | (e) Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (the “CODM”), which is comprised of certain members of the Company’s management team. During the years ended March 31, 2019 and 2021, the Company acquired Hunan Ruixi and XXTX, respectively, and disposed XXTX in August 2024. The Company evaluated how the CODM manages the businesses of the Company to maximize efficiency in allocating resources and assessing performance. The Company has one operating and reportable segment of automobile transaction and related services as set forth in Note 1, after discontinued the online ride-hailing platform services on August 20, 2024. |
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Cash and cash equivalents | (f) Cash and cash equivalents Cash and cash equivalents primarily consist of bank deposits with original maturities of three months or less, which are unrestricted as to withdrawal and use. Cash and cash equivalents also consist of funds received from automobile purchasers as payments for automobiles, funds received from automobile lessees as payments for rentals, which were held at the third-party platforms’ fund accounts and which are unrestricted and immediately available for withdrawal and use. |
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Accounts receivable, net | (g) Accounts receivable, net Accounts receivable are recorded at the invoiced amount less an allowance for any uncollectible accounts and do not bear interest, and are due on demand. The carrying value of accounts receivable is reduced by an allowance that reflects the Company’s best estimate of the amounts that will not be collected. An allowance for credit losses is recorded in the period when a loss is probable based on an assessment of specific evidence indicating collection is unlikely, historical bad debt rates, accounts aging, financial conditions of the customer and industry trends. Starting from April 1, 2023, the Company adopted ASU No.2016-13 “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASC Topic 326”). Management also periodically evaluates individual customer’s financial condition, credit history, and the current economic conditions to make adjustments in the allowance when it is considered necessary. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company’s management continues to evaluate the reasonableness of the valuation allowance policy and update it if necessary. As of December 31, 2024 and March 31, 2024, the Company record allowance for credit losses of $1,529 and $1,545 against accounts receivable, respectively. |
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Finance lease receivables | (h) Finance lease receivables Finance lease receivables, which result from sales-type leases, are measured at discounted present value of (i) future minimum lease payments, (ii) any residual value not subject to a bargain purchase option as finance lease receivables on its balance sheet and (iii) accrued interest on the balance of the finance lease receivables based on the interest rate inherent in the applicable lease over the term of the lease. Management also periodically evaluates individual customer’s financial condition, credit history and the current economic conditions to make adjustments in the allowance for credit losses when necessary. Finance lease receivables is charged off against the allowance for credit losses after all means of collection have been exhausted and the potential for recovery is considered remote. As of December 31, 2024 and March 31, 2024, the Company determined allowance for credit losses was necessary for finance lease receivables. As of December 31, 2024 and March 31, 2024, finance lease receivables consisted of the following:
Future scheduled minimum lease payments for investments in sales-type leases as of December 31, 2024 are as follows:
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Property and equipment, net | (i) Property and equipment, net Property and equipment primarily consist of leasehold improvements, computer equipment, office equipment, fixtures and furniture and automobiles, which are stated at cost less accumulated depreciation and amortization less any provision required for impairment in value. Depreciation and amortization is computed using the straight-line method with no residual value based on the estimated useful life. The useful life of property and equipment is summarized as follows:
The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An asset is considered impaired if its carrying amount exceeds the future net undiscounted cash flows that the asset is expected to generate. If such asset is considered to be impaired, the impairment recognized is the amount by which the carrying amount of the asset, if any, exceeds its fair value determined using a discounted cash flow model. For the three and nine months ended December 31, 2024 and 2023, the Company did not recognize impairment for property and equipment. Costs of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The cost and related accumulated depreciation and amortization of assets disposed of or retired are removed from the accounts, and any resulting gain or loss is reflected in the unaudited condensed consolidated statements of operations and comprehensive loss. |
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Loss per share | (j) Loss per share Basic loss per share is computed by dividing net loss attributable to stockholders by the weighted average number of outstanding shares of common stock, adjusted for outstanding shares of common stock that are subject to repurchase. For the calculation of diluted loss per share, net loss attributable to stockholders for basic loss per share is adjusted by the effect of dilutive securities, including share-based awards, under the treasury stock method and convertible securities under the if-converted method. Potentially dilutive securities, of which the amounts are insignificant, have been excluded from the computation of diluted net loss per share if their inclusion is anti-dilutive. As of December 31, 2024, the Company’s dilutive securities from the outstanding series A convertible preferred stock are convertible into 495,706 shares of common stock. This amount is not included in the computation of dilutive loss per share because their impact is anti-dilutive. |
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Derivative liabilities | (k) Derivative liabilities A contract is designated as an asset or a liability and is carried at fair value on the Company’s balance sheet, with any changes in fair value recorded in the Company’s results of operations. The Company then determines which options, warrants and embedded features require liability accounting and records the fair value as a derivative liability. The changes in the values of these instruments are shown in the unaudited condensed consolidated statements of operations and comprehensive loss as “change in fair value of derivative liabilities”. |
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Revenue recognition | (l) Revenue recognition The Company recognized its revenue under Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (ASC 606). ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. It also requires the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. To achieve that core principle, the Company applies the five steps defined under ASC 606: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company accounts for a contract with a customer when the contract is entered into by the parties, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration to collect is substantially probable. Disaggregated information of revenues by business lines are as follows:
Automobile transaction and related services Operating lease revenues from automobile rentals –The Company generates revenue from sub-leasing automobiles to some online ride-hailing drivers or third-parties and leasing its own automobiles. The Company recognizes revenue wherein an automobile is transferred to the lessees and the lessees has the ability to control the asset, is accounted for under ASC Topic 842. Rental transactions are satisfied over the rental period and is recognized over time. As the operating lease revenue are variable in nature which is based on online ride-hailing drivers or third-parties’ performance for a certain period, the Company recognized the revenue from operating lease by using the output method based on periodic settlement between the Company and the online ride-hailing drivers or third-parties when such revenue is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Rental periods are short term in nature, generally are twelve months or less. Service fees from NEVs leasing and automobile purchase services - Services fees from NEVs leasing are paid by some lessees who rent new energy electric vehicles from the Company, which based on the product solutions. Automobile purchase services are paid by automobile purchasers 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, which is based on the sales price of the automobiles and relevant services provided. Monthly services commissions – Commissions from the services generated from the management and related services provided to Partner Platforms and other companies, which are settled on a monthly basis. The Company recognizes revenues at a point in time when performance obligations are completed and the commission amount is confirmed by the Partner Platforms and other companies, based on their evaluations on the services provided by the Company. Financing revenues – Interest income from the lease arising from the Company’s sales-type leases and bundled lease arrangements are recognized as financing revenues over the lease term based on the effective rate of interest in the lease. The Company recognizes those revenues at a point in time when above mentioned services are completed, and corresponding an automobile is delivered to the lessee or purchaser. Accounts receivable related to the revenue from NEVs leasing and automobile purchase services is collected upon the automobiles are delivered to lessees or purchaser. Other revenues – The Company generated other revenues such as miscellaneous service fees charged to its customers for some supporting services provided to online ride-hailing drivers and sales of automobiles. The Company recognizes revenues at a point in time when performance obligations are completed and the collectability is probable from the customers. Leases - Lessor The Company recognized revenue as lessor in accordance with ASC 842. The two primary accounting provisions the Company uses to classify transactions as sales-type or operating leases are: (i) a review of the lease term to determine if it is for the major part of the economic life of the underlying equipment (defined as greater than 75)%; and (ii) a review of the present value of the lease payments to determine if they are equal to or greater than substantially all of the fair market value of the equipment at the inception of the lease (defined as greater than 90%). Automobiles included in arrangements meeting these conditions are accounted for as sales-type leases. Interest income from the lease is recognized in financing revenues over the lease term. Automobile included in arrangements that do not meet these conditions are accounted for as operating leases and revenue is recognized over the term of the lease. The Company excludes from the measurement of its lease revenues any tax assessed by a governmental authority that is both imposed on and concurrent with a specific revenue-producing transaction and collected from a customer. The Company considers the economic life of most of the automobiles to be to years, since this represents the most common long-term lease term for its automobiles and the automobiles will be used for online ride-hailing services. The Company believes three to years is representative of the period during which an automobile is expected to be economically usable, with normal service, for the purpose for which it is intended. The Company’s lease pricing interest rates, which are used in determining customer payments in a bundled lease arrangement, are developed based upon the local prevailing rates in the marketplace where its customer will be able to obtain an automobile loan under similar terms from the bank. The Company reassesses its pricing interest rates quarterly based on changes in the local prevailing rates in the marketplace. As of December 31, 2024, the Company’s pricing interest rate was 6.0% per annum. |
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Discontinued operations | (m) Discontinued operations A discontinued operation may include a component of an entity or a group of components of an entity, or a business or nonprofit activity. A disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operation if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when any of the following occurs: (1) the component of an entity or group of components of an entity meets the criteria to be classified as held for sale; (2) the component of an entity or group of components of an entity is disposed of by sale; (3) the component of an entity or group of components of an entity is disposed of other than by sale (for example, by abandonment or in a distribution to owners in a spinoff). |
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Significant risks and uncertainties | (n) Significant risks and uncertainties
The Company’s operations are carried out entirely in mainland China. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the social, political, economic and legal environments in the PRC as well as by the general state of the PRC economy. In addition, the Company’s business may be influenced by changes in PRC government laws, rules and policies with respect to, among other matters, anti-inflationary measures, currency conversion and remittance of currency outside of China, rates and methods of taxation and other factors.
Historically, most of the automobile purchasers would pay the Company their previously defaulted amounts within one to three months. As a result, the Company would provide full provisions on accounts receivable if the customers default on repayments for over three and nine months. As of December 31, 2024 and March 31, 2024, the Company record allowance for credit losses of $1,529 and $1,545 against accounts receivable, respectively.
As of December 31, 2024 and March 31, 2024 substantially all of the Company’s operating activities and major assets and liabilities, except for the cash deposit of approximately $71,000 and $21,000, respectively, in U.S. dollars, are denominated in RMB, which are not freely convertible into foreign currencies. All foreign exchange transactions take place through either the People’s Bank of China (the “PBOC”) or other authorized financial institutions at exchange rates quoted by PBOC. Approval of foreign currency payments by the PBOC or other regulatory institutions requires a payment application together with invoices and signed contracts. The value of RMB is subject to change in central government policies and international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. When there is a significant change in value of RMB, the gains and losses resulting from translation of financial statements of a foreign subsidiary will be significantly affected. RMB depreciated from 7.22 RMB into US$1.00 on March 31, 2024 to 7.30 RMB into US$1.00 on December 31, 2024. |
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Comparability and reclassification adjustments | (o) Comparability and reclassification adjustments The Company has reclassified certain comparative balances in the consolidated balance sheets as of March 31, 2024 and certain comparative amounts in the unaudited condensed consolidated statements of operations and comprehensive loss for the three and nine months ended December 31, 2023 to conform to the current period’s presentation. The assets and liabilities of the discontinued operations have been classified as current assets of discontinued operations, property and equipment, net of discontinued operations, other assets of discontinued operations, current liabilities of discontinued operations, and other liabilities of discontinued operations in the consolidated balance sheets as of March 31, 2024. The results of discontinued operations for the three and nine months ended December 31, 2023 have been reflected separately in the unaudited condensed consolidated statements of operations and comprehensive loss as a single line item for all periods presented in accordance with U.S. GAAP. Cash flows from discontinued operations of the three categories for the nine months ended December 31, 2023 were separately presented in the unaudited condensed consolidated statements of cash flows for all periods presented in accordance with U.S. GAAP. |
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Recent accounting pronouncements not yet adopted | (p) Recent accounting pronouncements not yet adopted The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies. In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements — codification amendments in response to SEC’s disclosure Update and Simplification initiative which amend the disclosure or presentation requirements of codification subtopic 230-10 Statement of Cash Flows—Overall, 250-10 Accounting Changes and Error Corrections— Overall, 260-10 Earnings Per Share— Overall, 270-10 Interim Reporting— Overall, 440-10 Commitments—Overall, 470-10 Debt—Overall, 505-10 Equity—Overall, 815-10 Derivatives and Hedging—Overall, 860-30 Transfers and Servicing—Secured Borrowing and Collateral, 932-235 Extractive Activities— Oil and Gas—Notes to Financial Statements, 946-20 Financial Services— Investment Companies— Investment Company Activities, and 974-10 Real Estate—Real Estate Investment Trusts—Overall. The amendments represent changes to clarify or improve disclosure and presentation requirements of above subtopics. Many of the amendments allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the SEC’s requirements. Also, the amendments align the requirements in the Codification with the SEC’s regulations. For entities subject to existing SEC disclosure requirements or those that must provide financial statements to the SEC for securities purposes without contractual transfer restrictions, the effective date aligns with the date when the SEC removes the related disclosure from Regulation S-X or Regulation S-K. Early adoption is not allowed. For all other entities, the amendments will be effective two years later from the date of the SEC’s removal. The Company is currently evaluating the impact of the update on the Company’s unaudited condensed consolidated financial statements and related disclosures. In November 2023, the FASB issued ASU 2023-07, which is an update to Topic 280, Segment Reporting: Improvements to reportable Segment Disclosures (“ASU 2023-07”), which enhances the disclosure required for reportable segments in annual and interim consolidated financial statements, including additional, more detailed information about a reportable segment’s expenses. ASU 2023-07 will be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of the pending adoption of AUS 2023-07 on its unaudited condensed consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, which is an update to Topic 740, Income Taxes. The amendments in this update enhances the transparency and decision usefulness of income tax disclosures. ASU 2023-09 will be effective for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this Update should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating the impact the adoption of ASU 2023-07 will have on its annual and interim disclosures. |
Summary of Significant Accounting Policies (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Summary of Significant Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Translation of Amounts from RMB into US | Translation of amounts from RMB into US$ has been made at the following exchange rates for the respective periods:
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Schedule of Fair Value on a Recurring Basis | The following table sets forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2024 and March 31, 2024:
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Schedule of Assets and Liabilities Measured at Fair Value | The following is a reconciliation of the beginning and ending balance of the assets and liabilities measured at fair value on a recurring basis for the nine months ended December 31, 2024 and for the year ended March 31, 2024:
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Schedule of Estimates the Fair Value to those Warrants Using the Black-Scholes Valuation Model | The August 2020 Underwriters’ Warrants, the February 2021 Placement Agent Warrants, the February 2021 ROFR Warrants, the May 2021 Investors Warrants, the May 2021 Placement Agent Warrants, and the November 2021 Investors Warrants and November 2021 Placement Agent Warrants (all discussed below) are not traded in an active securities market; therefore, the Company estimates the fair value to those warrants using the Black-Scholes valuation model as of December 31, 2024 and March 31, 2024.
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Schedule of Finance Lease Receivables | As of December 31, 2024 and March 31, 2024, finance lease receivables consisted of the following:
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Schedule of Future Scheduled Minimum Lease Payments for Investments in Sales-Type Leases | Future scheduled minimum lease payments for investments in sales-type leases as of December 31, 2024 are as follows:
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Schedule of Useful Life of Property and Equipment | The useful
life of property and equipment is summarized as follows:
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Schedule of Disaggregated Information of Revenues | Disaggregated information of revenues by business lines are as follows:
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Discontinued Operations (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Discontinued Operations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Discontinued Operations | Since October 2019, the Company has discontinued its online P2P lending services business. Carrying amounts of major classes of liabilities was included as part of discontinued operations of Online P2P lending services, whose change was due to the effect of exchange rate changes as of December 31, 2024 and March 31, 2024:
Reconciliation of the carrying amounts of major classes of assets and liabilities from discontinued operations of online ride-hailing platform service in consolidated balance sheets as of December 31, 2024 and March 31, 2024 are as follows:
The following table sets forth the reconciliation of the amounts of major classes of income and losses from discontinued operations of online ride-hailing platform service in the unaudited condensed consolidated statements of operations and comprehensive loss for the three and nine months ended December 31, 2024 and 2023.
Reconciliation of the amount of cash flows from discontinued operations in the unaudited condensed consolidated statements of cash flows for the nine months ended December 31, 2024 and 2023 are as follows:
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Accounts Receivable, Net (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable, Net [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Receivable | As of December 31, 2024 and March 31, 2024, accounts receivable were comprised of the following:
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Schedule of Movement of Allowance for Credit Losses | Movement of allowance for credit losses for the nine months ended December 31, 2024 and for year ended March 31, 2024 are as follows:
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Prepayments, Other Receivables and Other Current Assets, Net (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepayments, Other Receivables and Other Current Assets, Net [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Prepayments, Other Receivables and Other Current Assets, Net | As of December 31, 2024 and March 31, 2024, the prepayments, other receivables and other current assets, net were comprised of the following:
The balance of deposits mainly represented the security deposit made by the Company to various automobile leasing companies, financial institutions and Didi Chuxing Technology Co., Ltd., who runs an online ride-hailing platform. As of December 31, 2024 and March 31, 2024, the allowance for credit losses of $17,648 and $17,841 was recorded against the security deposits not returned for more than one year after the end of the cooperation.
The balance of prepaid expense represented automobile purchase prepayments, automobile liability insurance premium for automobiles for operating lease and other miscellaneous expense such as office lease, office remodel expense, etc. that will expire within one year.
The balance represented the amount of VAT, which resulted from historical purchasing activities and could be further used for deducting future VAT in PRC.
The balance due from automobile purchasers represented the payments of automobiles and related insurances and taxes made on behalf of the automobile purchasers. The balance is expected to be collected from the automobile purchasers in installments. As of December 31, 2024 and March 31, 2024, the allowance for credit losses recorded against receivables due from automobile purchasers was $2,604 and $2,633. |
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Schedule of Movement of Allowance for Credit Losses | Movement of allowance for credit losses for the nine months ended December 31, 2024 and for year ended March 31, 2024 are as follows:
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Property and Equipment, Net (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property and Equipment | Property and equipment as of December 31, 2024 and March 31, 2024 consist of the following:
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Intangible Assets, Net (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible Assets | Intangible assets as of December 31, 2024 and March 31, 2024 consisted of the following:
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Schedule of Amortization Expense | The following table sets forth the Company’s amortization expense for the next five years as of December 31, 2024:
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Other Non-Current Assets (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2024 | |||||||||||||||||||||||||||||||||||||||
Other Non-Current Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||
Schedule of Other Non-Current Assets |
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Accrued Expenses and Other Liabilities (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses and Other Liabilities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Expenses and Other Liabilities |
The balance of payables to drivers from aggregation platforms represented the amount the Company collected on behalf of drivers who completed their transaction through the Company’s online ride-hailing platform base on the confirmed billings.
The balance of deposits represented the security deposit from operating and finance lease customers to cover lease payment and related automobile expense in case the customers’ accounts are in default. The balance is refundable at the end of the lease term, after deducting any missed lease payment and applicable fee.
The balance of accrued expenses represented the unbilled or payable balances to the expenses related to the daily operations of automobiles and services fees to professional institutions. |
Equity (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Outstanding Warrants |
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Income Taxes (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Loss Before Income Tax by Jurisdiction | Net loss before income tax by jurisdiction as follows:
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Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences from continuing operations that give rise to the Company’s deferred tax assets and liabilities are as follows:
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Schedule of Deferred Tax Assets | The tax effects of temporary differences from discontinued operations that give rise to the Company’s deferred tax assets are as follows:
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Related Party Transactions and Balances (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions and Balances (Tables) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Due from Related Parties | As of December 31, 2024 and March 31, 2024, balances due from related parties from the Company’s operations were comprised of the following:
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Schedule of Allowance for Credit Losses Due from Jinkailong | Movement of allowance for credit losses for the nine months ended December 31, 2024 and for year ended March 31, 2024 are as follows:
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Schedule of Due to Related Parties | Due
to related parties
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Schedule of Operating Lease Right-of-Use Assets | Operating
lease right-of-use assets - a related party and Operating lease liabilities - a related party
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Jinkailong [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions and Balances (Tables) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Allowance for Credit Losses Due from Jinkailong | Movement of allowance for credit losses due from Jinkailong for the nine months ended December 31, 2024 and for the year ended March 31, 2024 are as follows:
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Leases (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Operating and Finance Lease Expenses | Operating and finance lease expenses consist of the following:
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Schedule of Company’s Minimum Lease Payments | The following table sets forth the Company’s minimum lease payments in future periods:
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Organization and Principal Activities (Details) |
3 Months Ended | 9 Months Ended | 18 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Aug. 31, 2018 |
Dec. 31, 2024
USD ($)
|
Dec. 31, 2023
USD ($)
|
Dec. 31, 2024
USD ($)
|
Dec. 31, 2023
USD ($)
|
Feb. 29, 2020
USD ($)
|
Aug. 20, 2024 |
Aug. 08, 2024 |
Mar. 31, 2024
USD ($)
|
Mar. 31, 2023
USD ($)
|
|
Organization and Principal Activities [Line Items] | ||||||||||
Date of entity incorporation | Jun. 08, 2017 | |||||||||
Number of operating segments | 1 | |||||||||
Due from related party | $ 2,847,738 | $ 2,847,738 | $ 3,245,907 | |||||||
Provision for credit losses | 367,245 | 722,681 | $ 680,396 | |||||||
Related Party [Member] | ||||||||||
Organization and Principal Activities [Line Items] | ||||||||||
Related party non current portion | $ 2,765,537 | 2,747,313 | ||||||||
Jinkailong [Member] | ||||||||||
Organization and Principal Activities [Line Items] | ||||||||||
Due from related party | $ 2,847,738 | 3,245,907 | ||||||||
Allowance for credit losses | 3,778,815 | 3,778,815 | 3,099,701 | $ 1,481,036 | ||||||
Related Party [Member] | ||||||||||
Organization and Principal Activities [Line Items] | ||||||||||
Due from related party | 2,929,238 | 2,929,238 | 3,395,907 | |||||||
Related party non current portion | 2,765,537 | 2,765,537 | 2,747,313 | |||||||
Allowance for credit losses | $ 3,778,815 | $ 3,778,815 | $ 3,099,701 | |||||||
Jiangsu Yuelaiyuexing Technology Co., Ltd [Member] | ||||||||||
Organization and Principal Activities [Line Items] | ||||||||||
equity interest percentage | 100.00% | |||||||||
XXTX [Member] | ||||||||||
Organization and Principal Activities [Line Items] | ||||||||||
equity interest percentage | 100.00% | |||||||||
Hunan Ruixi [Member] | ||||||||||
Organization and Principal Activities [Line Items] | ||||||||||
Equity interest percentage | 35.00% | 35.00% | ||||||||
Other Jinkailong’s Shareholders [Member] | ||||||||||
Organization and Principal Activities [Line Items] | ||||||||||
Equity interest percentage | 65.00% | |||||||||
Former Voting Agreements with Jinkailong’s Other Shareholders [Member] | ||||||||||
Organization and Principal Activities [Line Items] | ||||||||||
Equity interest percentage | 35.00% | |||||||||
Business agreement term | 20 years | 18 years |
Going Concern (Details) |
3 Months Ended | 9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2024
USD ($)
|
Sep. 30, 2024
USD ($)
|
Jun. 30, 2024
USD ($)
|
Dec. 31, 2023
USD ($)
|
Sep. 30, 2023
USD ($)
|
Jun. 30, 2023
USD ($)
|
Dec. 31, 2024
USD ($)
|
Dec. 31, 2023
USD ($)
|
Mar. 31, 2024
USD ($)
|
Sep. 23, 2022
Automobiles
|
|
Going Concern [Line Items] | ||||||||||
Net loss | $ (583,378) | $ (425,453) | $ (762,818) | $ (893,928) | $ (1,207,452) | $ (421,347) | $ (1,771,649) | $ (2,522,727) | ||
Accumulated deficit | $ (43,334,452) | (43,334,452) | $ (41,384,268) | |||||||
Working capital deficit | 3,400,000 | |||||||||
Purchase commitment | $ 900,000 | |||||||||
Number of automobiles | 100 | 100 | 100 | |||||||
Automobile purchase amount | $ 1,500,000 | |||||||||
Automobile [Member] | ||||||||||
Going Concern [Line Items] | ||||||||||
Automobile purchase prepayments | $ 600,000 | $ 600,000 |
Summary of Significant Accounting Policies (Details) |
9 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2024
USD ($)
shares
|
Dec. 31, 2024
CNY (¥)
|
Mar. 31, 2024
USD ($)
|
Mar. 31, 2023
USD ($)
|
|
Summary of Significant Accounting Policies [Line Items] | ||||
Reverse stock split | 1-for-10 | |||
Operating and reportable segments | 1 | |||
Allowance for credit losses | $ 1,529 | $ 1,545 | ||
Finance lease receivables | ||||
Percentage of lease term | 75.00% | |||
Percentage of lease payments | 90.00% | |||
Economic life, term | 5 years | 5 years | ||
Interest rate per annum | 6.00% | |||
Deposit | $ 71,000 | $ 21,000 | ||
Deposited amount | $ 250,000 | |||
Foreign currency risk | 7.2993 | 7.2993 | 7.2203 | |
United States [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Deposit | $ 71,000 | $ 21,000 | ||
China [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Deposit | 851,000 | 719,000 | ||
Maximum insurance claim deposit | 68,000 | ¥ 500,000 | ||
Automobile Purchasers [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Allowance for credit losses | $ 1,529 | $ 1,545 | ||
Automobile [Member] | Minimum [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Economic life, term | 3 years | 3 years | ||
Automobile [Member] | Maximum [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Economic life, term | 5 years | 5 years | ||
RMB [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Foreign currency risk | 7.3 | 7.3 | 7.22 | |
USD [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Foreign currency risk | 1 | 1 | 1 | |
Series A Convertible Preferred Stock [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Dilutive securities from the outstanding (in Shares) | shares | 495,706 |
Summary of Significant Accounting Policies - Schedule of Translation of Amounts from RMB into US (Details) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
Dec. 31, 2024 |
Dec. 31, 2023 |
Mar. 31, 2024 |
|
Schedule of Translation of Amounts from RMB into US [Abstract] | |||||
Balance sheet items, except for equity accounts – RMB: US$1: | 7.2993 | 7.2993 | 7.2203 | ||
Items in the statements of operations and comprehensive loss, and cash flows – RMB: US$1: | 7.1896 | 7.2247 | 7.1981 | 7.16 |
Summary of Significant Accounting Policies - Schedule of Fair Value on a Recurring Basis (Details) - Fair Value, Recurring [Member] - USD ($) |
Dec. 31, 2024 |
Mar. 31, 2024 |
---|---|---|
Schedule of Fair Value on a Recurring Basis [Line Items] | ||
Derivative liabilities | $ 182,933 | $ 288,833 |
Level 1 [Member] | ||
Schedule of Fair Value on a Recurring Basis [Line Items] | ||
Derivative liabilities | ||
Level 2 [Member] | ||
Schedule of Fair Value on a Recurring Basis [Line Items] | ||
Derivative liabilities | ||
Level 3 [Member] | ||
Schedule of Fair Value on a Recurring Basis [Line Items] | ||
Derivative liabilities | $ 182,933 | $ 288,833 |
Summary of Significant Accounting Policies - Schedule of Assets and Liabilities Measured at Fair Value (Details) - USD ($) |
9 Months Ended | 12 Months Ended |
---|---|---|
Dec. 31, 2024 |
Mar. 31, 2024 |
|
Schedule of Assets and Liabilities Measured at Fair Value [Line Items] | ||
Beginning balance | $ 288,833 | $ 501,782 |
Change in fair value of derivative liabilities | (105,900) | (212,943) |
Warrant forfeited due to expiration | (6) | |
Ending balance | 182,933 | 288,833 |
Recurring [Member] | ||
Schedule of Assets and Liabilities Measured at Fair Value [Line Items] | ||
Beginning balance | 288,833 | |
Ending balance | 182,933 | 288,833 |
Recurring [Member] | June 2019 [Member] | Registered Direct Offering Series A Warrants [Member] | ||
Schedule of Assets and Liabilities Measured at Fair Value [Line Items] | ||
Beginning balance | 1 | |
Change in fair value of derivative liabilities | ||
Warrant forfeited due to expiration | (1) | |
Ending balance | ||
Recurring [Member] | June 2019 [Member] | Registered Direct Offering Placement Warrants [Member] | ||
Schedule of Assets and Liabilities Measured at Fair Value [Line Items] | ||
Beginning balance | 5 | |
Change in fair value of derivative liabilities | ||
Warrant forfeited due to expiration | (5) | |
Ending balance | ||
Recurring [Member] | August 2020 [Member] | Underwritten Public Offering Warrants [Member] | ||
Schedule of Assets and Liabilities Measured at Fair Value [Line Items] | ||
Beginning balance | 3,219 | 8,450 |
Change in fair value of derivative liabilities | (2,654) | (5,231) |
Warrant forfeited due to expiration | ||
Ending balance | 565 | 3,219 |
Recurring [Member] | February 2021 [Member] | Registered Direct Offering Warrants [Member] | ||
Schedule of Assets and Liabilities Measured at Fair Value [Line Items] | ||
Beginning balance | 4,333 | 11,491 |
Change in fair value of derivative liabilities | (3,125) | (7,158) |
Warrant forfeited due to expiration | ||
Ending balance | 1,208 | 4,333 |
Recurring [Member] | May 2021 [Member] | Registered Direct Offering Placement Warrants [Member] | ||
Schedule of Assets and Liabilities Measured at Fair Value [Line Items] | ||
Beginning balance | 6,048 | 12,147 |
Change in fair value of derivative liabilities | (3,146) | (6,099) |
Warrant forfeited due to expiration | ||
Ending balance | 2,902 | 6,048 |
Recurring [Member] | May 2021 [Member] | Registered Direct Offering Investors Warrants [Member] | ||
Schedule of Assets and Liabilities Measured at Fair Value [Line Items] | ||
Beginning balance | 80,636 | 161,961 |
Change in fair value of derivative liabilities | (41,939) | (81,325) |
Warrant forfeited due to expiration | ||
Ending balance | 38,697 | 80,636 |
Recurring [Member] | November 2021 [Member] | Private Placement Investors Warrants [Member] | ||
Schedule of Assets and Liabilities Measured at Fair Value [Line Items] | ||
Beginning balance | 179,520 | 284,762 |
Change in fair value of derivative liabilities | (51,320) | (105,242) |
Warrant forfeited due to expiration | ||
Ending balance | 128,200 | 179,520 |
Recurring [Member] | November 2021 [Member] | Private Placement Placement Warrants [Member] | ||
Schedule of Assets and Liabilities Measured at Fair Value [Line Items] | ||
Beginning balance | 15,077 | 22,965 |
Change in fair value of derivative liabilities | (3,716) | (7,888) |
Warrant forfeited due to expiration | ||
Ending balance | $ 11,361 | $ 15,077 |
Summary of Significant Accounting Policies - Schedule of Estimates the Fair Value to those Warrants Using the Black-Scholes Valuation Model (Details) |
Dec. 31, 2024
shares
|
Mar. 31, 2024
shares
|
---|---|---|
August 4, 2020 [Member] | Placement Agent Warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Class of warrant number of securities called by warrants (in Shares) | 31,808 | 31,808 |
Warrants Valuation date | Dec. 31, 2024 | Mar. 31, 2024 |
February 10, 2021 [Member] | Placement agent warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Class of warrant number of securities called by warrants (in Shares) | 38,044 | 38,044 |
Warrants Valuation date | Dec. 31, 2024 | Mar. 31, 2024 |
February 10, 2021 [Member] | Placement Agent Warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Class of warrant number of securities called by warrants (in Shares) | 15,218 | 15,218 |
Warrants Valuation date | Dec. 31, 2024 | Mar. 31, 2024 |
May 13, 2021 [Member] | Placement agent warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Class of warrant number of securities called by warrants (in Shares) | 41,490 | 41,490 |
Warrants Valuation date | Dec. 31, 2024 | Mar. 31, 2024 |
May 13, 2021 [Member] | Investor Warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Class of warrant number of securities called by warrants (in Shares) | 553,192 | 553,192 |
Warrants Valuation date | Dec. 31, 2024 | Mar. 31, 2024 |
November 10, 2021 [Member] | Placement agent warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Class of warrant number of securities called by warrants (in Shares) | 55,148 | 55,148 |
Warrants Valuation date | Dec. 31, 2024 | Mar. 31, 2024 |
November 10, 2021 [Member] | Investor Warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Class of warrant number of securities called by warrants (in Shares) | 5,310,763 | 5,310,763 |
Warrants Valuation date | Dec. 31, 2024 | Mar. 31, 2024 |
Exercise price [Member] | August 4, 2020 [Member] | Placement Agent Warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 6.25 | 6.25 |
Exercise price [Member] | February 10, 2021 [Member] | Placement agent warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 13.8 | 13.8 |
Exercise price [Member] | February 10, 2021 [Member] | Placement Agent Warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 17.25 | 17.25 |
Exercise price [Member] | May 13, 2021 [Member] | Placement agent warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 10.5 | 10.5 |
Exercise price [Member] | May 13, 2021 [Member] | Investor Warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 10.5 | 10.5 |
Exercise price [Member] | November 10, 2021 [Member] | Placement agent warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 6.8 | 6.8 |
Exercise price [Member] | November 10, 2021 [Member] | Investor Warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 1.13 | 1.13 |
Stock price [Member] | August 4, 2020 [Member] | Placement Agent Warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 1.07 | 0.9 |
Stock price [Member] | February 10, 2021 [Member] | Placement agent warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 1.07 | 0.9 |
Stock price [Member] | February 10, 2021 [Member] | Placement Agent Warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 1.07 | 0.9 |
Stock price [Member] | May 13, 2021 [Member] | Placement agent warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 1.07 | 0.9 |
Stock price [Member] | May 13, 2021 [Member] | Investor Warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 1.07 | 0.9 |
Stock price [Member] | November 10, 2021 [Member] | Placement agent warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 1.07 | 0.9 |
Stock price [Member] | November 10, 2021 [Member] | Investor Warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 1.07 | 0.9 |
Expected term (years) [Member] | August 4, 2020 [Member] | Placement Agent Warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 0.59 | 1.35 |
Expected term (years) [Member] | February 10, 2021 [Member] | Placement agent warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 1.11 | 1.87 |
Expected term (years) [Member] | February 10, 2021 [Member] | Placement Agent Warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 1.11 | 1.87 |
Expected term (years) [Member] | May 13, 2021 [Member] | Placement agent warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 1.36 | 2.12 |
Expected term (years) [Member] | May 13, 2021 [Member] | Investor Warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 1.36 | 2.12 |
Expected term (years) [Member] | November 10, 2021 [Member] | Placement agent warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 1.86 | 2.61 |
Expected term (years) [Member] | November 10, 2021 [Member] | Investor Warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 1.86 | 2.61 |
Risk-free interest rate [Member] | August 4, 2020 [Member] | Placement Agent Warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 4.24 | 4.88 |
Risk-free interest rate [Member] | February 10, 2021 [Member] | Placement agent warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 4.15 | 4.65 |
Risk-free interest rate [Member] | February 10, 2021 [Member] | Placement Agent Warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 4.15 | 4.65 |
Risk-free interest rate [Member] | May 13, 2021 [Member] | Placement agent warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 4.15 | 4.57 |
Risk-free interest rate [Member] | May 13, 2021 [Member] | Investor Warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 4.15 | 4.57 |
Risk-free interest rate [Member] | November 10, 2021 [Member] | Placement agent warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 4.08 | 4.47 |
Risk-free interest rate [Member] | November 10, 2021 [Member] | Investor Warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 4.08 | 4.47 |
Expected volatility [Member] | August 4, 2020 [Member] | Placement Agent Warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 113 | 117 |
Expected volatility [Member] | February 10, 2021 [Member] | Placement agent warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 113 | 117 |
Expected volatility [Member] | February 10, 2021 [Member] | Placement Agent Warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 113 | 117 |
Expected volatility [Member] | May 13, 2021 [Member] | Placement agent warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 113 | 117 |
Expected volatility [Member] | May 13, 2021 [Member] | Investor Warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 113 | 117 |
Expected volatility [Member] | November 10, 2021 [Member] | Placement agent warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 113 | 117 |
Expected volatility [Member] | November 10, 2021 [Member] | Investor Warrants [Member] | ||
Schedule of Estimates the Fair Value to Those Warrants Using the Black-Scholes Valuation Model [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 113 | 117 |
Summary of Significant Accounting Policies - Schedule of Finance Lease Receivables (Details) - USD ($) |
Dec. 31, 2024 |
Mar. 31, 2024 |
---|---|---|
Schedule of Finance Lease Receivables [Abstract] | ||
Minimum lease payments receivable | $ 310,183 | $ 354,617 |
Less: Unearned interest | (102,425) | (117,927) |
Financing lease receivables | 207,758 | 236,690 |
Finance lease receivables, current | 177,807 | 144,166 |
Finance lease receivables, non-current | $ 29,951 | $ 92,524 |
Summary of Significant Accounting Policies - Schedule of Future Scheduled Minimum Lease Payments for Investments in Sales-Type Leases (Details) - USD ($) |
Dec. 31, 2024 |
Mar. 31, 2024 |
---|---|---|
Schedule of Future Scheduled Minimum Lease Payments for Investments in Sales-Type Leases [Abstract] | ||
Twelve months ending December 31, 2025 | $ 246,115 | |
Twelve months ending December 31, 2026 | 61,294 | |
Twelve months ending December 31, 2027 | 2,774 | |
Total | $ 310,183 | $ 354,617 |
Summary of Significant Accounting Policies - Schedule of Useful Life of Property and Equipment (Details) |
Dec. 31, 2024 |
---|---|
Summary of Significant Accounting Policies - Schedule of Useful Life of Property and Equipment (Details) [Line Items] | |
Property, Plant, and Equipment, Useful Life, Term, Description [Extensible Enumeration] | Shorter of the remaining lease terms or estimated useful lives |
Property, Plant and Equipment, Useful Life | 5 years |
Minimum [Member] | Computer Equipment [Member] | |
Summary of Significant Accounting Policies - Schedule of Useful Life of Property and Equipment (Details) [Line Items] | |
Property, Plant and Equipment, Useful Life | 2 years |
Minimum [Member] | Office equipment fixture and furniture [Member] | |
Summary of Significant Accounting Policies - Schedule of Useful Life of Property and Equipment (Details) [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Minimum [Member] | Automobiles [Member] | |
Summary of Significant Accounting Policies - Schedule of Useful Life of Property and Equipment (Details) [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Maximum [Member] | Computer Equipment [Member] | |
Summary of Significant Accounting Policies - Schedule of Useful Life of Property and Equipment (Details) [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Maximum [Member] | Office equipment fixture and furniture [Member] | |
Summary of Significant Accounting Policies - Schedule of Useful Life of Property and Equipment (Details) [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Maximum [Member] | Automobiles [Member] | |
Summary of Significant Accounting Policies - Schedule of Useful Life of Property and Equipment (Details) [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Summary of Significant Accounting Policies - Schedule of Disaggregated Information of Revenues (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
Automobile Transaction and Related Services | ||||
Total Revenues | $ 919,836 | $ 1,108,207 | $ 2,544,725 | $ 3,480,453 |
Operating lease revenues from automobile rentals [Members] | ||||
Automobile Transaction and Related Services | ||||
Revenues | 747,253 | 992,071 | 2,087,986 | 3,069,458 |
Service fees from NEVs leasing [Members] | ||||
Automobile Transaction and Related Services | ||||
Revenues | 68,963 | 8,412 | 142,751 | 33,309 |
Monthly services commissions [Member] | ||||
Automobile Transaction and Related Services | ||||
Revenues | 43,755 | 51,388 | 100,690 | 168,199 |
Financing revenues [Members] | ||||
Automobile Transaction and Related Services | ||||
Revenues | 23,668 | 12,195 | 72,697 | 37,135 |
Service fees from automobile purchase services [Member] | ||||
Automobile Transaction and Related Services | ||||
Revenues | 2,959 | 19,122 | 29,862 | 31,354 |
Other revenues [Member] | ||||
Automobile Transaction and Related Services | ||||
Revenues | $ 33,238 | $ 25,019 | $ 110,739 | $ 140,998 |
Discontinued Operations (Details) - USD ($) |
9 Months Ended | |||
---|---|---|---|---|
Aug. 20, 2024 |
Aug. 08, 2024 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
Discontinued Operations [Line Items] | ||||
Percentage of equity interest | 100.00% | |||
Deconsolidation amount (in Dollars) | $ 397,775 | |||
XXTX [Member] | ||||
Discontinued Operations [Line Items] | ||||
Percentage of equity interest | 100.00% | |||
Deconsolidation amount (in Dollars) | $ 397,775 |
Discontinued Operations - Schedule of Discontinued Operations (Details) - Discontinued Operations, Disposed of by Means Other than Sale, Abandonment [Member] - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
Dec. 31, 2024 |
Dec. 31, 2023 |
Mar. 31, 2024 |
|
P2P Lending Services Business [Member] | |||||
Current liabilities | |||||
Accrued expenses and other liabilities | $ 458,978 | $ 458,978 | $ 464,000 | ||
Online Ride-Hailing Platform Services [Member] | |||||
Current assets | |||||
Cash and cash equivalents | 54,580 | ||||
Accounts receivable | 14,130 | ||||
Prepayments, other receivables, and other current assets, net | 344,444 | ||||
Due from a related party | 6,938 | ||||
Total current assets | 420,092 | ||||
Property and equipment, net: | 1,267 | ||||
Other Assets | |||||
Intangible assets, net | 140,698 | ||||
Total assets | 562,057 | ||||
Current liabilities | |||||
Borrowings from financial institutions | 142,456 | ||||
Accounts payable | 44,128 | ||||
Accrued expenses and other liabilities | 74,488 | 74,488 | 671,868 | ||
Total current liabilities | 74,488 | 74,488 | 858,452 | ||
Other liabilities: | |||||
Borrowings from financial institutions, noncurrent | 71,228 | ||||
Deferred tax liability | 11,611 | ||||
Total Other liabilities | 82,839 | ||||
Total liabilities | 74,488 | 74,488 | $ 941,291 | ||
Revenues | $ 510,203 | 344,241 | $ 2,059,622 | ||
Cost of revenues | (381,085) | (247,025) | (1,427,766) | ||
Gross profit | 129,118 | 97,216 | 631,856 | ||
Operating expenses | |||||
Selling, general and administrative expenses | (306,461) | (166,937) | (964,851) | ||
Provision for credit losses | (173,278) | ||||
Total operating expenses | (306,461) | (340,215) | (964,851) | ||
Loss from operations | (177,343) | (242,999) | (332,995) | ||
Other income (expenses), net | (5,699) | 33,214 | (24,699) | ||
Interest expense | (7,852) | (8,372) | (10,085) | ||
Loss before income taxes | (190,894) | (218,157) | (367,779) | ||
Income tax benefit | 4,510 | ||||
Net loss from discontinued operations | $ (190,894) | (213,647) | (367,779) | ||
Net cash used in operating activities from discontinued operations | (73,441) | (348,330) | |||
Net cash provided by investing activities from discontinued operations | 49 | 159 | |||
Net cash (used in) provided by financing activities from discontinued operations | $ (82,074) | $ 236,202 |
Accounts Receivable, Net - Schedule of Accounts Receivable (Details) - USD ($) |
Dec. 31, 2024 |
Mar. 31, 2024 |
Mar. 31, 2023 |
---|---|---|---|
Schedule of Accounts Receivable [Line Items] | |||
Less: Allowance for credit losses | $ (1,529) | $ (1,545) | |
Accounts receivable, net | 40,300 | 19,883 | |
Receivables of operating lease [Member] | |||
Schedule of Accounts Receivable [Line Items] | |||
Accounts receivable, gross | 40,300 | 18,531 | |
Receivables of automobile sales due from automobile purchasers [Member] | |||
Schedule of Accounts Receivable [Line Items] | |||
Accounts receivable, gross | $ 1,529 | $ 2,897 |
Accounts Receivable, Net - Schedule of Movement of Allowance for Credit Losses (Details) - USD ($) |
9 Months Ended | 12 Months Ended |
---|---|---|
Dec. 31, 2024 |
Mar. 31, 2024 |
|
Schedule of Movement of Allowance for Credit Losses [Abstract] | ||
Beginning balance | $ 1,545 | |
Addition | 1,557 | |
Translation adjustment | (16) | (12) |
Ending balance | $ 1,529 | $ 1,545 |
Prepayments, Other Receivables and Other Current Assets, Net (Details) - USD ($) |
9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2024 |
Mar. 31, 2024 |
|||
Prepayments, Other Receivables and Other Current Assets, Net [Abstract] | ||||
Credit losses | $ 17,648 | $ 17,841 | ||
Automobile purchasers | [1] | $ 2,604 | $ 2,633 | |
|
Prepayments, Other Receivables and Other Current Assets, Net - Schedule of Prepayments, Other Receivables and Other Current Assets, Net (Details) - USD ($) |
Dec. 31, 2024 |
Mar. 31, 2024 |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
Schedule of Prepayments, Other Receivables and Other Current Assets, Net [Abstract] | ||||||||||
Deposits | [1] | $ 325,702 | $ 347,297 | |||||||
Prepaid expenses | [2] | 236,473 | 296,454 | |||||||
Value added tax (“VAT”) recoverable | [3] | 74,004 | 27,443 | |||||||
Due from automobile purchasers, net | [4] | 2,604 | 2,633 | |||||||
Employee advances | 967 | 142 | ||||||||
Others | 3,383 | 24,874 | ||||||||
Less: Allowance for credit losses | (20,252) | (20,474) | ||||||||
Total prepayments, other receivables and other current assets, net | $ 622,881 | $ 678,369 | ||||||||
|
Prepayments, Other Receivables and Other Current Assets, Net - Schedule of Movement of Allowance for Credit Losses (Details) - USD ($) |
9 Months Ended | 12 Months Ended |
---|---|---|
Dec. 31, 2024 |
Mar. 31, 2024 |
|
Schedule of Movement of Allowance for Credit Losses [Abstract] | ||
Beginning balance | $ 20,474 | |
Addition | 20,626 | |
Translation adjustment | (222) | (152) |
Ending balance | $ 20,252 | $ 20,474 |
Property and Equipment, Net (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
Property and Equipment, Net [Abstract] | ||||
Depreciation and amortization expense | $ 226,353 | $ 242,427 | $ 689,794 | $ 697,485 |
Property and Equipment, Net - Schedule of Property and Equipment (Details) - Continuing Operations [Member] - USD ($) |
Dec. 31, 2024 |
Mar. 31, 2024 |
---|---|---|
Schedule of Property and Equipment [Line Items] | ||
Property and equipment, gross | $ 4,684,609 | $ 4,973,118 |
Less: accumulated depreciation and amortization | (2,796,776) | (2,297,861) |
Total property and equipment, net | 1,887,833 | 2,675,257 |
Leasehold improvements [Member] | ||
Schedule of Property and Equipment [Line Items] | ||
Property and equipment, gross | 172,380 | 174,266 |
Computer equipment [Member] | ||
Schedule of Property and Equipment [Line Items] | ||
Property and equipment, gross | 25,607 | 13,291 |
Office equipment, fixtures and furniture [Member] | ||
Schedule of Property and Equipment [Line Items] | ||
Property and equipment, gross | 65,768 | 77,898 |
Automobiles [Member] | ||
Schedule of Property and Equipment [Line Items] | ||
Property and equipment, gross | $ 4,420,854 | $ 4,707,663 |
Intangible Assets, Net (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
Intangible Assets, Net [Abstract] | ||||
Amortization expense | $ 18,750 | $ 45,731 | $ 56,278 | $ 86,201 |
Intangible Assets, Net - Schedule of Intangible Assets (Details) - USD ($) |
Dec. 31, 2024 |
Mar. 31, 2024 |
---|---|---|
Schedule of Intangible Assets [Line Items] | ||
Software | $ 790,816 | $ 791,262 |
Less: accumulated amortization | (397,066) | (341,233) |
Total intangible assets, net | $ 393,750 | $ 450,029 |
Intangible Assets, Net - Schedule of Amortization Expense (Details) - USD ($) |
Dec. 31, 2024 |
Mar. 31, 2024 |
---|---|---|
Schedule of Amortization Expense [Abstract] | ||
Twelve months ending December 31, 2025 | $ 75,000 | |
Twelve months ending December 31, 2026 | 75,000 | |
Twelve months ending December 31, 2027 | 75,000 | |
Twelve months ending December 31, 2028 | 75,000 | |
Twelve months ending December 31, 2029 | 75,000 | |
Thereafter | 18,750 | |
Total intangible assets, net | $ 393,750 | $ 450,029 |
Other Non-Current Assets (Details) |
1 Months Ended | |||||
---|---|---|---|---|---|---|
Dec. 31, 2024
USD ($)
|
Mar. 31, 2023
USD ($)
|
Sep. 30, 2022
USD ($)
|
Mar. 31, 2024
USD ($)
|
|||
Other Non-Current Assets [Line Items] | ||||||
Number of automobiles | 50 | |||||
Prepayments of remaining purchase amount | [1] | $ 632,937 | $ 639,863 | |||
Purchase Agreements [Member] | ||||||
Other Non-Current Assets [Line Items] | ||||||
Number of automobiles | 150 | 150 | ||||
Automobile purchase agreements | $ 2,301,261 | $ 2,301,261 | ||||
Prepayments of remaining purchase amount | $ 632,937 | |||||
|
Other Non-Current Assets - Schedule of Other Non-Current Assets (Details) - USD ($) |
Dec. 31, 2024 |
Mar. 31, 2024 |
||
---|---|---|---|---|
Other Non-Current Assets [Abstract] | ||||
Prepayments of automobiles purchased | [1] | $ 632,937 | $ 639,863 | |
|
Accrued Expenses and Other Liabilities - Schedule of Accrued Expenses and Other Liabilities (Details) - USD ($) |
Dec. 31, 2024 |
Mar. 31, 2024 |
||||||
---|---|---|---|---|---|---|---|---|
Schedule of Accrued Expenses and Other Liabilities [Abstract] | ||||||||
Accrued payroll and welfare | $ 1,518,699 | $ 1,221,294 | ||||||
Payables to drivers from aggregation platforms | [1] | 964,544 | 521,439 | |||||
Deposits | [2] | 642,686 | 668,172 | |||||
Accrued expenses | [3] | 502,955 | 423,420 | |||||
Other taxes payable | 133,229 | 90,256 | ||||||
Payables for expenditures on automobile transaction and related services | 9,896 | 9,768 | ||||||
Other payables | 6,446 | 42,190 | ||||||
Total accrued expenses and other liabilities | $ 3,778,455 | $ 2,976,539 | ||||||
|
Employee Benefit Plan (Details) - USD ($) |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
Dec. 31, 2024 |
Dec. 31, 2023 |
Mar. 31, 2024 |
|
Employee Benefit Plan [Abstract] | |||||
Defined contribution cost | $ 33,518 | $ 43,786 | $ 111,329 | $ 135,551 | |
Employee benefit contributions | $ 950,202 | $ 928,943 |
Equity (Details) |
3 Months Ended | 9 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Aug. 09, 2022
$ / shares
shares
|
Oct. 29, 2021 |
Jul. 29, 2021 |
Apr. 29, 2021 |
Jan. 29, 2021 |
Oct. 29, 2020
USD ($)
shares
|
Dec. 31, 2024
USD ($)
$ / shares
shares
|
Dec. 31, 2023
USD ($)
|
Dec. 31, 2024
USD ($)
$ / shares
shares
|
Dec. 31, 2023
USD ($)
|
Mar. 31, 2024
USD ($)
shares
|
Mar. 31, 2023
shares
|
Mar. 31, 2022
shares
|
|
Equity [Line Items] | |||||||||||||
Change in fair value of derivative liabilities | $ | $ 15,942 | $ 2,654 | $ 148,067 | ||||||||||
Reverse stock split | 1-for-10 | ||||||||||||
Restricted stock units | 127,273 | ||||||||||||
Restricted stock | $ | $ 140,000 | ||||||||||||
Aggregate vested, shares | 750 | ||||||||||||
Floor price | $ / shares | $ 0.41 | $ 0.41 | |||||||||||
Percentage of closing bid price | 85.00% | 85.00% | |||||||||||
Preferred stock | $ | $ 234,364 | $ 234,364 | $ 234,364 | ||||||||||
August 2020 Underwriters' Warrants [Member] | |||||||||||||
Equity [Line Items] | |||||||||||||
Direct offering warrants outstanding | 31,808 | 31,808 | 31,808 | ||||||||||
Change in fair value of derivative liabilities | $ | $ 1,630 | 774 | 7,577 | ||||||||||
Fair value of the derivative instrument | $ | $ 565 | $ 565 | $ 3,219 | ||||||||||
Reverse stock split | 1-for-10 | ||||||||||||
Original exercise price | $ / shares | $ 6.25 | $ 6.25 | |||||||||||
February 2021 Registered Direct Offering Warrants [Member] | |||||||||||||
Equity [Line Items] | |||||||||||||
Direct offering warrants outstanding | 53,262 | 53,262 | 53,262 | ||||||||||
Change in fair value of derivative liabilities | $ | $ 2,077 | 986 | $ 3,125 | 10,266 | |||||||||
Fair value of the derivative instrument | $ | $ 1,208 | $ 1,208 | $ 4,333 | ||||||||||
Reverse stock split | 1-for-10 | ||||||||||||
Placement Agent Warrants [Member] | |||||||||||||
Equity [Line Items] | |||||||||||||
Exercise price of warrants | $ / shares | $ 13.8 | ||||||||||||
ROFR Warrants [Member] | |||||||||||||
Equity [Line Items] | |||||||||||||
Exercise price of warrants | $ / shares | $ 17.25 | ||||||||||||
May 2021 Registered Direct Offering Warrants [Member] | |||||||||||||
Equity [Line Items] | |||||||||||||
Direct offering warrants outstanding | 594,682 | 594,682 | 594,682 | ||||||||||
Change in fair value of derivative liabilities | $ | $ 40,663 | $ 28,486 | $ 45,085 | $ 244,111 | |||||||||
Fair value of the derivative instrument | $ | $ 41,599 | $ 41,599 | $ 86,684 | ||||||||||
Reverse stock split | 1-for-10 | ||||||||||||
Exercise price of warrants | $ / shares | $ 10.5 | ||||||||||||
November 2021 Private Placement Warrants [Member] | |||||||||||||
Equity [Line Items] | |||||||||||||
Direct offering warrants outstanding | 5,365,911 | 5,365,911 | 5,365,911 | ||||||||||
Change in fair value of derivative liabilities | $ | $ 76,944 | $ 55,036 | |||||||||||
Fair value of the derivative instrument | $ | $ 139,561 | $ 139,561 | $ 194,597 | ||||||||||
Reverse stock split | 1-for-10 | ||||||||||||
Equity Incentive Plan [Member] | |||||||||||||
Equity [Line Items] | |||||||||||||
Board of directors | 2 | ||||||||||||
Common Stock [Member] | |||||||||||||
Equity [Line Items] | |||||||||||||
Reverse stock split | 1-for-10 | ||||||||||||
Common Stock [Member] | November 2021 Private Placement Warrants [Member] | |||||||||||||
Equity [Line Items] | |||||||||||||
Warrants to purchase | 1.13 | 1.13 | |||||||||||
Common Stock [Member] | Equity Incentive Plan [Member] | |||||||||||||
Equity [Line Items] | |||||||||||||
Common stock to be issued | 1,800,000 | 1,500,000 | |||||||||||
Restricted Stock Units (RSUs) [Member] | |||||||||||||
Equity [Line Items] | |||||||||||||
Number of quarterly installments | 4 | 4 | 4 | 4 | |||||||||
Aggregate vested, shares | 12,727 | 3,182 | |||||||||||
RSUs settled | 9,545 | ||||||||||||
Restricted Stock Units (RSUs) [Member] | Equity Incentive Plan [Member] | |||||||||||||
Equity [Line Items] | |||||||||||||
RSUs were granted | 30,379 | ||||||||||||
Issued an aggregate shares | 26,447 | ||||||||||||
RSUs were granted newly | |||||||||||||
Series A Convertible Preferred Stock [Member] | |||||||||||||
Equity [Line Items] | |||||||||||||
Convertible preferred stock | 991 | 991 | 991 | ||||||||||
Convertible stock | 4,009 | ||||||||||||
Common stock | 1,871,125 | 1,871,125 | |||||||||||
Private Placement [Member] | Maximum [Member] | |||||||||||||
Equity [Line Items] | |||||||||||||
Initial conversion price | $ / shares | $ 4.1 | ||||||||||||
Number of common stock that are available to be issued upon conversion of the preferred shares | 2,240,000 | ||||||||||||
Private Placement [Member] | Minimum [Member] | |||||||||||||
Equity [Line Items] | |||||||||||||
Initial conversion price | $ / shares | $ 2 | ||||||||||||
Number of common stock that are available to be issued upon conversion of the preferred shares | 1,092,683 | ||||||||||||
Private Placement [Member] | Series A Convertible Preferred Stock [Member] | |||||||||||||
Equity [Line Items] | |||||||||||||
Initial conversion price | $ / shares | $ 0.68 | $ 0.68 |
Equity - Schedule of Outstanding Warrants (Details) - Warrant [Member] - $ / shares |
9 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2023 |
Dec. 31, 2024 |
Mar. 31, 2024 |
|
Schedule of Outstanding Warrants [Line Items] | |||
Warrants Outstanding, Forfeited | (20,635) | ||
Warrants Exercisable, Forfeited | (20,635) | ||
Weighted Average Exercise Price, Forfeited (in Dollars per share) | |||
Average Remaining Contractual Life, Forfeited | |||
Warrants Outstanding, Ending | 6,066,298 | 6,045,663 | 6,045,663 |
Warrants Exercisable, Ending | 6,066,298 | 6,045,663 | 6,045,663 |
Weighted Average Exercise Price, Ending (in Dollars per share) | $ 2.29 | $ 2.25 | $ 2.25 |
Average Remaining Contractual Life, Ending | 3 years 6 months 21 days | 1 year 9 months 18 days | 2 years 6 months 18 days |
Warrants Outstanding, Exercised | |||
Warrants Exercisable, Exercised | |||
Weighted Average Exercise Price, Exercised (in Dollars per share) | |||
Average Remaining Contractual Life, Exercised |
Income Taxes (Details) ¥ in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Dec. 31, 2024
USD ($)
|
Dec. 31, 2023
USD ($)
|
Dec. 31, 2024
USD ($)
|
Dec. 31, 2023
USD ($)
|
Dec. 31, 2024
CNY (¥)
|
Mar. 31, 2024
USD ($)
|
|
Income Taxes [Line Items] | ||||||
Percentage of income tax rate | 21.00% | |||||
Net operating loss | $ (706,224) | $ (902,364) | $ (2,095,940) | $ (2,817,079) | ||
Income tax carryforward | 8,300,000 | $ 8,300,000 | $ 7,600,000 | |||
Tax liability (in Yuan Renminbi) | ¥ | ¥ 0.1 | |||||
PRC [Member] | ||||||
Income Taxes [Line Items] | ||||||
Operating income tax rate | 25.00% | |||||
U.S [Member] | ||||||
Income Taxes [Line Items] | ||||||
Net operating loss | 200,000 | $ 700,000 | $ 800,000 | $ 1,300,000 | ||
Income tax utilized | 80.00% | |||||
Deferred tax asset valuation allowance | 100.00% | |||||
Discontinued Operations [Member] | ||||||
Income Taxes [Line Items] | ||||||
Net operating loss carryforwards | $ 900,000 | $ 900,000 | $ 900,000 |
Income Taxes - Schedule of Net Loss Before Income Tax by Jurisdiction (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
Schedule of Net Loss Before Income Tax by Jurisdiction [Abstract] | ||||
U.S. | $ (86,294) | $ (655,050) | $ (664,549) | $ (977,824) |
PRC | (497,084) | (47,984) | (893,453) | (1,177,124) |
Total net loss before income tax | $ (583,378) | $ (703,034) | $ (1,558,002) | $ (2,154,948) |
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) |
Dec. 31, 2024 |
Mar. 31, 2024 |
---|---|---|
Schedule of Deferred Tax Assets and Liabilities [Abstract] | ||
Net operating loss carryforwards in the PRC | $ 1,296,007 | $ 976,138 |
Net operating loss carryforwards in the U.S. | 1,750,323 | 1,588,529 |
Allowance for credit losses | 977,395 | 807,974 |
Others | 6,362 | 6,431 |
Less: valuation allowance | (4,030,087) | (3,379,072) |
Deferred tax assets, net |
Income Taxes - Schedule of Deferred Tax Assets (Details) - Discontinued Operations [Member] - USD ($) |
Dec. 31, 2024 |
Mar. 31, 2024 |
---|---|---|
Valuation Allowance [Line Items] | ||
Net operating loss carry forwards in the PRC | $ 225,797 | $ 228,268 |
Less: valuation allowance | (225,797) | (228,268) |
Total |
Concentration (Details) - Supplier Concentration Risk [Member] - Revenue Benchmark [Member] |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
Suppliers One [Member] | ||||
Concentration [Line Items] | ||||
Percentage of suppliers accounted | 16.60% | 20.50% | 18.10% | 21.30% |
Suppliers Two [Member] | ||||
Concentration [Line Items] | ||||
Percentage of suppliers accounted | 13.80% | 17.30% | 15.00% | 20.70% |
Suppliers Three [Member] | ||||
Concentration [Line Items] | ||||
Percentage of suppliers accounted | 13.50% | 14.40% | 14.70% | 15.40% |
Suppliers Four [Member] | ||||
Concentration [Line Items] | ||||
Percentage of suppliers accounted | 10.00% |
Related Party Transactions and Balances (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2024 |
Jan. 03, 2024 |
Mar. 31, 2022 |
Nov. 30, 2018 |
Dec. 31, 2024 |
Dec. 31, 2023 |
Dec. 31, 2024 |
Dec. 31, 2023 |
Mar. 31, 2024 |
|
Related Party Transactions and Balances [Line Items] | |||||||||
Prepayment to a related party | $ 34,825 | $ 34,825 | $ 34,825 | ||||||
Company’s equity investee | 2,847,738 | 2,847,738 | 2,847,738 | 3,245,907 | |||||
Net of allowance for credit losses non-current | $ 980,147 | ||||||||
Revenues | 919,836 | $ 1,108,207 | 2,544,725 | $ 3,480,453 | |||||
Outstanding amount | 81,500 | ||||||||
Rent payable | 31,859 | 92,142 | |||||||
Generated revenue | 2,882 | 7,133 | 11,747 | 29,280 | |||||
Rental cost | 44,479 | 80,973 | 63,440 | 473,317 | |||||
Related Party [Member] | |||||||||
Related Party Transactions and Balances [Line Items] | |||||||||
Company’s equity investee | 2,929,238 | 2,929,238 | 2,929,238 | 3,395,907 | |||||
Net of allowance for credit losses | 2,765,537 | 2,765,537 | 2,765,537 | 2,747,313 | |||||
Hong Li [Member] | |||||||||
Related Party Transactions and Balances [Line Items] | |||||||||
Rent payable | 0 | 4,516 | |||||||
Dingchentai [Member] | |||||||||
Related Party Transactions and Balances [Line Items] | |||||||||
Rent payable | 10,462 | $ 10,896 | 31,348 | $ 31,514 | |||||
Loan Agreement [Member] | |||||||||
Related Party Transactions and Balances [Line Items] | |||||||||
Reserve loan | $ 150,000 | ||||||||
Jinkailong [Member] | Related Party [Member] | |||||||||
Related Party Transactions and Balances [Line Items] | |||||||||
Company’s equity investee | 1,867,591 | ||||||||
Outstanding balance as result of deconsolidation | 2,651,078 | ||||||||
Revenues | $ 594,829 | ||||||||
Hunan Dingchentai Investment Co., Ltd [Member] | Lease Agreement [Member] | |||||||||
Related Party Transactions and Balances [Line Items] | |||||||||
Rent payable | $ 44,250 | ||||||||
Xi Wen [Member] | |||||||||
Related Party Transactions and Balances [Line Items] | |||||||||
Unsecured debt | $ 92,226 | $ 92,226 | $ 92,226 | $ 12,354 |
Related Party Transactions and Balances - Schedule of Due from Related Parties (Details) - Related Party [Member] - USD ($) |
Dec. 31, 2024 |
Mar. 31, 2024 |
---|---|---|
Related Party Transaction [Line Items] | ||
Total due from related parties | $ 6,708,053 | $ 6,495,608 |
Less: Allowance for credit losses | (3,778,815) | (3,099,701) |
Due from related parties, net | 2,929,238 | 3,395,907 |
Due from related parties, net, current | 163,701 | 648,594 |
Due from a related party, net, non-current | $ 2,765,537 | $ 2,747,313 |
Related Party Transactions and Balances - Schedule of Allowance for Credit Losses Due from Jinkailong (Details) - Jinkailong [Member] - USD ($) |
9 Months Ended | 12 Months Ended |
---|---|---|
Dec. 31, 2024 |
Mar. 31, 2024 |
|
Schedule of Allowance for Credit Losses Due from Jinkailong [Line Items] | ||
Beginning balance | $ 3,099,701 | $ 1,481,036 |
Addition | 722,681 | 1,703,563 |
Translation adjustment | (43,567) | (84,898) |
Ending balance | $ 3,778,815 | $ 3,099,701 |
Related Party Transactions and Balances - Schedule of Due to Related Parties (Details) - Related Party [Member] - USD ($) |
Dec. 31, 2024 |
Mar. 31, 2024 |
||||
---|---|---|---|---|---|---|
Related Party Transaction [Line Items] | ||||||
Loan payable to a related party | [1] | $ 92,226 | $ 12,354 | |||
Other payable due to a related party | [2] | 161,396 | 158,632 | |||
Total due to related parties | $ 253,622 | $ 170,986 | ||||
|
Related Party Transactions and Balances - Schedule of Operating Lease Right-of-Use Assets (Details) - Related Party [Member] - USD ($) |
Dec. 31, 2024 |
Mar. 31, 2024 |
---|---|---|
Related Party Transaction [Line Items] | ||
Operating lease right-of-use assets – a related party | $ 17,025 | $ 47,128 |
Operating lease liabilities – a related party | $ 10,155 | $ 51,741 |
Leases (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
Dec. 31, 2024 |
Dec. 31, 2023 |
Mar. 31, 2024 |
|
Leases [Line Items] | |||||
Weighted-average remaining operating lease term | 4 months 28 days | 4 months 28 days | |||
Weighted-average remaining finance lease term | 9 months 10 days | 9 months 10 days | |||
Amortization of leased asset | $ 221,879 | $ 322,904 | |||
Interest expenses | $ 3,365 | $ 6,791 | 12,723 | 23,107 | |
Operating Lease from Offices and Showroom [Member] | |||||
Leases [Line Items] | |||||
Operating lease costs | 14,647 | 56,486 | 66,170 | 182,258 | |
Amortization of leased asset | 10,168 | 48,816 | 43,639 | 141,995 | |
Related Party [Member] | |||||
Leases [Line Items] | |||||
Operating lease payments due to related parties | 10,155 | 10,155 | $ 51,741 | ||
Automobiles [Member] | |||||
Leases [Line Items] | |||||
Operating lease costs | $ 273,446 | $ 400,082 | $ 755,476 | $ 1,460,938 |
Leases - Schedule of Operating and Finance Lease Expenses (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
Finance lease cost | ||||
Finance lease cost | $ 3,365 | $ 6,791 | $ 12,723 | $ 23,107 |
Total lease expenses | 350,941 | 523,327 | 1,012,609 | 1,847,212 |
Cost of revenue [Member] | ||||
Operating lease cost | ||||
Operating lease cost | 273,446 | 400,082 | 755,476 | 1,460,938 |
Finance lease cost | ||||
Finance lease cost | 59,483 | 59,968 | 178,240 | 180,627 |
Selling, general and administrative [Member] | ||||
Operating lease cost | ||||
Operating lease cost | 14,647 | 56,486 | 66,170 | 182,258 |
General and administrative [Member] | ||||
Finance lease cost | ||||
Finance lease cost | 282 | |||
Interest expenses on finance leases [Member] | ||||
Finance lease cost | ||||
Finance lease cost | $ 3,365 | $ 6,791 | $ 12,723 | $ 23,107 |
Leases - Schedule of Company’s Minimum Lease Payments (Details) |
Dec. 31, 2024
USD ($)
|
|||
---|---|---|---|---|
Schedule of Company’s Minimum Lease Payments [Abstract] | ||||
Operating lease payments Twelve months ending December 31, 2025 | $ 10,304 | [1] | ||
Twelve months ending December 31, 2025 | 388,066 | |||
Finance lease payments Twelve months ending December 31, 2025 | 377,762 | |||
Operating lease payments Total lease payments | 10,304 | [1] | ||
Finance lease payments Total lease payments | 377,762 | |||
Total lease payments | 388,066 | |||
Operating lease payments Less: discount | (149) | [1] | ||
Finance lease payments Less: discount | (4,569) | |||
Less: discount | (4,718) | |||
Operating lease payments Present value of lease liabilities | 10,155 | [1] | ||
Finance lease payments Present value of lease liabilities | 373,193 | |||
Present value of lease liabilities | $ 383,348 | |||
|
Commitments and Contingencies (Details) ¥ in Millions |
Dec. 31, 2024
USD ($)
|
Dec. 31, 2024
CNY (¥)
|
Sep. 23, 2022
USD ($)
Automobiles
|
---|---|---|---|
Commitments and Contingencies [Line Items] | |||
Total number of automobiles (in Automobiles) | 100 | 100 | 100 |
Purchase prepayments | $ 600,000 | ||
Automobiles [Member] | |||
Commitments and Contingencies [Line Items] | |||
Purchase amount | $ 1,500,000 | ||
Jinkailong [Member] | |||
Commitments and Contingencies [Line Items] | |||
Equity interest | 35.00% | 35.00% | |
Jinkailong [Member] | |||
Commitments and Contingencies [Line Items] | |||
Maximum amount of liabilities | $ 479,000 | ¥ 3.5 |
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