What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-06-30 compared with 2025-07-10 · 681 added, 535 removed, 145 unchanged (89% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

following discussion and analysis of our results of operations and financial condition should be read together with our consolidated

financial statements and the notes thereto and other financial information, which are included elsewhere in this Report.

Our financial

statements have been prepared in accordance with U.S.

In addition, our financial statements and the financial information included

in this Report reflect our organizational transactions and have been prepared as if our current corporate structure had been in place

throughout the relevant periods.

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 consolidated financial statements and

the notes thereto and other financial information, which are included elsewhere in this Report.

Our financial statements have been prepared

in accordance with U.S.

In addition, our financial statements and the financial information included in this Report reflect our

organizational transactions and have been prepared as if our current corporate structure had been in place throughout the relevant periods.

We are a provider of automobile

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operators of online ride-hailing platforms in the People’s Republic of China (“PRC” or “China”).

automobile transaction and related services through our majority owned subsidiaries, Chengdu Jiekai Yunli Technology Co., Ltd., a PRC

limited liability company and its subsidiary (“Jiekai”), and Hunan Ruixi Financial Leasing Co., Ltd., a PRC limited liability

company (“Hunan Ruixi”), and our former wholly owned subsidiary, Chengdu Corenel Technology Co., Ltd.

a PRC limited liability

company (“Corenel”).

Substantially all of our operations are conducted in China.

automobile transaction and related services in Hunan Province of China through our majority owned subsidiary, Hunan Ruixi Business Operation

Management Co., Ltd., a PRC limited liability company (“Hunan Ruixi”).

Prior to December 31, 2025,

we provided automobile transaction and related services in Sichuan Province of China through our former majority owned subsidiary, Chengdu

Jiekai Yunli Technology Co., Ltd., a PRC limited liability company and its subsidiary (“Jiekai”) and our former wholly owned

subsidiary, Chengdu Corenel Technology Co., Ltd.

a PRC limited liability company (“Corenel”).

As discussed below under “–

Automobile Transactions and Related Services”, we ceased our automobile transactions and related services in Sichuan Province of

China on December 31 2025.

From October 2020 to August

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ceased our online ride-hailing Platform Services on August 20, 2024.

Automobile Transactions and Related Services

During the year ended March

31, 2026, the Company began evaluating opportunities to expand its business into AI infrastructure.

In furtherance of this initiative,

the Company appointed David Nichols as a strategic advisor to assist the Company in advancing its strategy across AI infrastructure, digital

infrastructure and new energy initiatives, with a particular focus on power infrastructure origination, capital formation and institutional

partnerships.

Management is currently evaluating several potential AI data center

projects and, with the assistance of its advisors, is conducting commercial, operational and strategic due diligence.

The Company expects

to select one of these opportunities for further development if it determines that the project is commercially viable and consistent with

its long-term strategic objectives.

As of the date of this Annual Report, the Company has not entered into any definitive agreement with

respect to any AI data center or related infrastructure project, and there can be no assurance that any such opportunity will be consummated

or successfully implemented.

Our Automobile Transactions and Related Services

Our Automobile Transaction

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(v) automobile financing where we provide our customers with auto finance solutions through

financing leases (the “Auto Financing”);

(vi) default expenses we charges to the lessees for early-termination the contracts

finance leases (the “Auto Financing”);

(vi) default fees we charges to the lessees for early-termination the contracts

or other violation behaviors to the contracts (the “Default Revenue”);

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and operating leasing in March 2019, respectively.

November 22, 2018, the acquisition date of Hunan Ruixi, and as of March 31, 2025, 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 2,116 automobiles under operating leases and 191 automobiles under financing leases to customers, the vast

majority of whom are online ride-hailing drivers.

Considering the fierce competition

of the online ride-hailing industry and our operating losses in China, in December 2025 the Company

entered into a certain Acquisition Agreement (the “ Sichuan Acquisition Agreement”)

with Hu Mao Sheng Tang Holdings Limited., a non-affiliated Hong Kong company (“HMST”).

Pursuant to the Sichuan Acquisition

Agreement, the Company sold all of the equity interests in Sichuan Senmiao Yicheng Assets Management Co., Ltd.

Sichuan Senmiao Zecheng Business Consulting Co., Ltd.

(“Senmiao Consulting”) and its subsidiaries, which were our former subsidiaries

in Sichuan Province of China (“former subsidiaries in Sichuan”), to HMST for

nil consideration, while we undertook certain liabilities of $518,388 which were previously assumed by former subsidiaries in Sichuan

(the “Disposition”).

On December 31, 2025, the Disposition was completed and we ceased

our automobile Transactions and Related Services in Sichuan Province of China .

Since November 22, 2018,

the acquisition date of Hunan Ruixi, and as of March 31, 2026, we have facilitated financing for an aggregate of 312 automobiles with

a total value of approximately $5.4 million, sold an aggregate of 381 automobiles with a total value of approximately $3.7 million and

delivered 470 automobiles under operating leases and 197 automobiles under finance leases to customers, the vast majority of whom are

online ride-hailing drivers.

The table below provides

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Auto Operating Leasing

Auto Commissions

Auto Financing

Auto Commissions

Other Services

the year ended March 31, 2025, our Auto Operating Leasing, Auto Commissions, Auto Financing and other services income accounted for approximately

82.6%, 4.3%, 2.8%, and 10.3% 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 88.7%, 4.5%, 1.3%, and 5.5%

for the year ended March 31, 2024, respectively.

Discontinued Online Ride-Hailing Platform Services

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

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

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.

The number was rounded to the nearest thousand for disclosure purpose.

During the year ended March

31, 2026, our Auto Operating Leasing, Auto Financing, Auto Commissions, and other services income accounted for approximately 87.2%, 4.4%,

1.1%, and 7.3% of our total revenue from our automobile transactions and related services, respectively, while our Auto Operating Leasing,

Auto Financing, Auto Commissions, and other services income accounted for approximately 88.9%, 4.9%, 1.4%, and 4.8% for the year ended

March 31, 2025, 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.

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 to the fierce competition

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However, considering the changes in online ride-hailing industry

and development plan of the Company, on August 8, 2024, we entered into the Acquisition Agreement with the Purchaser, and certain other

parties thereto.

Pursuant to the Acquisition Agreement, the Purchaser 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.

Factors and Risks Affecting Results of Operations

and development plan of the Company, on August 8, 2024, we entered into the XXTX Acquisition Agreement with the Purchaser, and certain

other parties thereto.

Pursuant to the XXTX Acquisition Agreement, the Purchaser acquired all of the equity interests in XXTX at a total

purchase price of zero, while taking over certain liabilities of XXTX as defined in the XXTX 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

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.

largely driven by the expansion of our automobile lessee base and the corresponding revenue generated from operating and finance lease.

We acquire customers for our Automobile Transaction and Related Services through the network of third-party sales teams, referral from

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our services.

As of March 31, 2025, we had 3 employees in our own sales department.

of Automobile Rentals

As of March 31, 2026, we had one employee in our own sales department.

Management of Automobile Rentals

Due to the fierce competition

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during the year ended March 31, 2026.

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 March 31, 2025,

for parking and management of automobiles for operating lease, we had one parking lot and 3 employees in Changsha, and we also share the

parking lot with our equity investee company, Jinkailong in Chengdu.

During the years ended March 31, 2025 and 2024, the average utilization

of the automobiles for operating lease was approximately 89.0% and 79.7%, respectively.

Service Offerings and Pricing

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.

to Retain Key Business Cooperators

To meet the demand in Changsha, we have purchased automobiles for our operating lease.

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 March 31, 2026, for parking and management of automobiles

for operating lease, we had one parking lot and three employees in Changsha.

During the years ended March 31, 2026 and 2025, the average

utilization of the automobiles for operating lease was approximately 88.3% and 92.3%, 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

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to us to have considerable resources to support the exploration and expansion of our business into new cities.

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

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.

to Collect Receivables on a Timely Basis

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 March 31, 2025, we had accounts receivable of operating lease of approximately $20,000 in

Besides, during the year ended March 31, 2025, we settled our commissions with the Partner Platforms for our online ride-hailing

platform services and automobile rental income on a monthly basis.

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.

to Manage Defaults Effectively

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 Partner Platforms during the year ended March 31, 2025.

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

We also charge default expenses from customers for their behaviors violated to the contracts.

Meanwhile, in order to strengthen

our market position, Hunan Ruixi has built up cooperation relationships with Partner Platforms, such as Hunan Didi Chuxing Technology

Co., Ltd., whereby the online ride-hailing requests and orders shall be completed on Partner Platforms utilizing the network of cars and

drivers of us while Hunan Ruixi earned rental income from drivers and earned commissions from Partner Platforms.

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

In accordance with the development of the operating lease business, our Partner Platforms, such as Didi, 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 March 31, 2026, we had no accounts receivable of operating lease.

Besides, during the year ended March 31, 2026, we settled our

commissions with the Partner Platforms for our 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

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 Partner Platforms during the year ended March 31, 2026.

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.

charge default fees from customers for their behaviors violated to the contracts.

Further, the automobiles

subject to our financing leases are not collateralized by us.

As of March 31, 2025, the total value of non-collateralized automobiles

was close to the amount of finance lease receivables since it was on a straight-line basis.

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

to Compete Effectively

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.

Opportunity and Government Regulations in China

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 55th Statistical report on Internet Development in China published in January

2025 by the China Internet Network Information Center (the “CNNIC”), the number of online ride-hailing service users had

reached 539 million by the end of December 2024, and took approximately 48.7% of the total number of Chinese internet users.

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.

subject to our finance leases are not collateralized by us.

As of March 31, 2026, the total value of non-collateralized automobiles was

close to the amount of finance lease receivables since it was on a straight-line basis.

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 finance 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.

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.

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

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 57th Statistical report on Internet Development in China published in February 2026 by the China

Internet Network Information Center (the “CNNIC”), the number of online ride-hailing service users had reached 539 million

by the end of December 2025, and took approximately 47.9% 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

For example, Dida Inc.

and Chenqi Technology Limited were listed on the Hong Kong Stock Exchange in June 2024,

and CaoCao Inc.

have filed their prospectuses again to the Stock Exchange of Hong Kong Limited April 2025.

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 April 30, 2025, approximately 382 online ride-hailing platforms

have obtained booking taxi operating licenses, representing an increase of approximately 9% as compared with the one as of April 30,

And the total volume of online ride-hailing orders was approximately 727 million in April 2025 in China, representing a decrease

of approximately 12% as compared with the one as of April 30, 2024.

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, representing

an increase of approximately 13% and 10% as compared with the ones as of March 31, 2024, respectively.

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.

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.

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

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;

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 43%

of ride-hailing drivers who leased our automobiles or used our services have not obtained the driver’s license for online ride-hailing

services as of March 31, 2025 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.

Meanwhile, during

the year ended March 31, 2025, Gaode conducted several rounds of compliance checks in Chengdu and other cities and reduced the number

of orders dispatched platforms that allowed drivers to provide services without appropriate licenses or certificates.

We assisted 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.

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.

of Continuing Operations for the year ended March 31, 2025 Compared to the year ended March 31, 2024

Chenqi Technology Limited and CaoCao Inc.

were listed on the Hong Kong Stock Exchange in June 2024

and June 2025, 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 April 30, 2026, approximately 399 online ride-hailing platforms have obtained booking taxi

operating licenses, representing an increase of approximately 4% as compared with the one as of April 30, 2025.

And the total volume of

online ride-hailing orders was approximately 727 million in April 30, 2026 in China, representing an increase of approximately 27% as

compared with the one as of April 30, 2025.

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 as of December 31, 2024, respectively.

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.

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 April 1, 2017, the General

Office of Changsha City People’s Government issued the “Detailed Rules for the Administration of Online Car-Hailing Business Services

of Changsha City”, which was abolished and replaced by the updated version issued on July 23, 2018.

On August 20, 2025, the Changsha

Municipal Bureau of Transportation further issued “Announcement of Changsha Municipal Bureau of Transportation on Further Improving

the Issuance of Vocational Qualification Certificates for Taxi Drivers and Other Related Matters”.

According to these regulations

and guidelines, three licenses /certificates are required for operating the online ride-hailing business in Changsha:

(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 newly added cars used for online ride-hailing in Changsha

shall be NEVs starting from 2027.

As of March 31, 2026, all

ride-hailing drivers who leased our automobiles or used our services have obtained the driver’s license for online ride-hailing

services, and 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.

We assisted 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.

The Chinese government has

exercised and continued to exercise substantial control over virtually every sector of the Chinese economy through regulation and state

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

year ended March 31, 2026 Compared to the year ended March 31, 2025

For the Years Ended

6 unchanged sentences

Loss from operations

Other income, net

Interest expense

Interest expense on finance leases

Other income (expense), net

Change in fair value of derivative liabilities

Excess of warrant fair value over offering proceeds

Loss before income taxes

3 unchanged sentences

$ (1,906,841 )

We started generating revenue

from Automobile Transaction and Related Services from our acquisition of Hunan Ruixi on November 22, 2018.

Revenue for the year ended

March 31, 2025 decreased by $930,959, or approximately 21.5%, as compared with the year ended March 31, 2024.

The decrease was mainly

due to the decreased number of automobiles for operating lease.

As we focus on our automobile

rental business, we expect revenue from our automobile rental to continuously account for a majority of our revenues.

We plan to provide

$ (3,362,060 )

We started generating

revenue from Automobile Transaction and Related Services from our acquisition of Hunan Ruixi on November 22, 2018.

As we focus on our

automobile rental business, we expect revenue from our automobile rental to continuously account for a majority of our revenues.

a series of product solutions to sustain and further increase the number of our automobiles for operating leases.

4 unchanged sentences

- Operating lease revenues from automobile rentals

- Financing revenues

- Service fees from NEVs leasing

- Monthly services commissions

- Default revenue

- Financing revenues

- Monthly services commissions

- Service fees from automobile purchase services

2 unchanged sentences

Revenue from our automobile

transaction and related services mainly includes operating lease revenues from automobile rentals, service fees from NEVs leasing, monthly

services commissions, default revenue, financing revenues, service fees from automobile purchase services, and other services fees, which

accounted for approximately 82.6%, 5.4%, 4.3%, 3.1%, 2.8%, 1.1% and 0.7%, respectively, of the total revenue during the year ended March

Meanwhile, operating lease revenues from automobile rentals, service fees from NEVs leasing, monthly services commissions, default

revenue, financing revenues, service fees from automobile purchase services and other services fees, which accounted for approximately

transaction and related services mainly includes operating lease revenues from automobile rentals, financing revenues, service fees from

NEVs leasing, default revenue, monthly services commissions, service fees from automobile purchase services, and other services fees,

which accounted for approximately 87.2%, 4.4%, 4.2%, 1.7%, 1.1%, 0.6% and 0.8%, respectively, of the total revenue during the year ended

March 31, 2026.

Meanwhile, operating lease revenues from automobile rentals, financing revenues, default revenue, monthly services commissions,

service fees from automobile purchase services, and other services fees, which accounted for approximately 88.9%, 4.9%, 1.7%, 1.4%, 2.0%

and 1.1%, respectively, of the total revenue during the year ended March 31, 2025.

lease revenues from automobile rentals

Operating lease revenues from automobile rentals

We generate revenues from

leasing our own automobiles and sub-leasing automobiles leased from third-parties and related parties or rendered by online ride-hailing

drivers with their authorization for a lease term of no more than twelve months.

The decrease in rental income of $1,030,045 or approximately

26.9% during the year ended March 31, 2025 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 826 automobiles with an average monthly rental income of approximately

$410 per automobile, resulting in a rental income of $2,800,992, including rental income of $46,461 from Jinkailong and other related

parties, for the year ended March 31, 2025.

We leased over 1,400 automobiles with an average monthly rental income of approximately $485

per automobile, resulting in a rental income of $3,831,037, including rental income of $34,742 from Jinkailong, for the year ended March

fees from NEVs leasing

generated revenues of $184,625 and $45,231 from leasing NEVs by charging leases service fees during the year ended March 31, 2025 and

2024, respectively.

The amount of services fees for NEVs leasing were based on our product solutions timely in accordance which adjusted

with different market conditions.

services commissions

generated revenues of $145,227 and $196,099 from the monthly management and related services provided to our Partner Platforms and other

companies during the years ended March 31, 2025 and 2024, respectively.

The decrease of $50,872 or approximately 25.9% was due to decrease

in the number of the automobiles and drivers we served, who ran their business through the Partner Platforms.

generated default revenues of $105,025 and $100,763 from the automobile lessee’s early-termination of the contracts or other

violation behaviors to the contracts during the years ended March 31, 2025 and 2024, respectively.

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.

recognized a total interest income of $93,473 from an average monthly number of 46 automobiles and $57,677 from an average monthly number

of 33 automobiles during the years ended March 31, 2025 and 2024, 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 year ended March 31, 2025.

fees from automobile purchase services and Other Service fees

leasing our own automobiles by online ride-hailing drivers with their authorization, with the majority of lease term of no more than 12

The decrease in rental income of $336,570 or approximately 20.0% during the year ended March 31, 2026 was mainly due to the decrease

in the number and average monthly rental of automobiles leased for operating lease.

We leased approximately 340 automobiles with an average

monthly rental income of approximately $381 per automobile, resulting in a rental income of $1,348,542 for the year ended March 31, 2026.

While we approximately 366 automobiles with an average monthly rental income of approximately $437 per automobile, resulting in a rental

income of $1,685,112 for the year ended March 31, 2025.

Financing revenues

We started our finance lease

business in March 2019 and began to generate interest income from providing finance lease 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 24 or 48 months.

We recognized a total interest income of

$68,011 from an average monthly number of 46 automobiles and $93,473 from an average monthly number of 46 automobiles during the years

ended March 31, 2026 and 2025, respectively.

The decrease was due to the decreased outstanding principal finance lease upon periodic rental

payments during the year ended March 31, 2026.

Service fees from NEVs leasing

We generated revenues

of $64,833 and $0 from leasing NEVs by charging leases service fees during the years ended March 31, 2026 and 2025, respectively.

The amount of services fees for NEVs leasing were based on our timely product solutions which adjusted in accordance with different

market conditions.

Default revenue

We generated default revenues

of $26,025 and $33,050 from the automobile lessee’s early-termination of the contracts or other violation behaviors to the contracts

during the years ended March 31, 2026 and 2025, respectively.

The decrease was primarily attributable to a lower incidence of early-terminations

and contractual breaches by the automobile lessees, driven by improved credit quality of our lessee base, enhanced risk management and

contract monitoring practices during the year ended March 31, 2026.

Monthly services commissions

We generated revenues of

$17,485 and $25,799 from the monthly management and related services provided to our Partner Platforms and other companies during the

years ended March 31, 2026 and 2025, respectively.

The decrease was due to the decrease in the number of automobiles leased to online

ride-hailing drivers for operating lease during the year ended March 31, 2026, which in turn led to lower commission income from the Partner

Platforms related to the monthly management and related services.

Service fees from automobile purchase services and Other Service

We generated revenues of

$10,046 and $38,696 from the automobile purchase services during the years ended March 31, 2026 and 2025, respectively.

The increase was

due to the number of automobiles purchase transactions increased to 28 during the year ended March 31, 2025 from 22 in the same period

generate other revenues from other miscellaneous service fees charged to our customers during the years ended March 31, 2025 and 2024.

Other services fees mainly include the maintenance fees charged to our customers pursuant to certain new production solutions.

The decrease was

due to the number of automobiles purchase transactions decreased to 8 during the year ended March 31, 2026 from 28 during the year ended

March 31, 2025.

We generate other revenues

from other miscellaneous service fees charged to our customers during the years ended March 31, 2026 and 2025.

Other services fees mainly

include the maintenance fees charged to our customers pursuant to certain new product 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 $856,031 or approximately 25.2% during the year ended March 31, 2025 as compared

with the year ended March 31, 2024, mainly due to a decrease in the monthly average number of the automobiles leased from the third parties

for operating lease from 470 in the year ended March 31, 2024 to 293 in the year ended March 31, 2025.

During years ended March 31, 2025

and 2024, we paid $114,368 and $472,848, respectively, to related parties for costs of automobiles under operating leases.

had gross profit of $849,803 and $924,731, respectively, during the years ended March 31, 2025 and 2024.

The decrease of $74,928 was

mainly due to the decrease in gross profit from Auto Operating Leasing.

the depreciation and rental cost of automobiles, daily maintenance, insurance and other usage costs of automobiles which related to our

Auto Operating Leasing.

Cost of revenues kept relatively stable, primarily due to total number of our own automobiles used for operating

leasing remaining substantially unchanged during the year ended March 31, 2026 as compared with the year ended March

We had gross profit of $210,200

and $571,724, respectively, during the years ended March 31, 2026 and 2025.

The following table sets forth the breakdown of gross profit

7 unchanged sentences

in the year ended March 31, 2025.

The decrease was attributable to the decrease in average monthly rental income from approximately $485

for the year ended March 31, 2024 to approximately $410 for the year ended March 31, 2025, as well as a decrease in the number of the

automobiles leased for operating lease decreased from over 1,400 for the year ended March 31, 2024 to 826 for the year ended March 31,

However, our overall gross margin slightly increased to approximately 25.1% for the year ended March 31, 2025 from approximately

21.4% for the year ended March 31, 2024 due to an increase in revenues from other services with much higher gross margin.

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 $3,130,213 for the year ended March 31, 2024 to $2,624,120 for the year ended March 31, 2025,

representing a decrease of $506,093, or approximately 16.2%.

The decrease was attributable to our continuous control on costs and streamlined

expenses structure during the year ended March 31, 2025.

The decrease mainly consisted of (1) a decrease of $337,946 in salary and employee

benefits as the average monthly number of our employees decreased from 56 for the year ended March 31, 2024 to 52 for the year ended March

and (2) a decrease of $158,958 in offices rental and charges in the year ended March 31, 2025.

for credit losses

The decrease was attributable to the average monthly rental of automobiles leased for operating lease

decreased from $437 in the year ended March 31, 2025 to $381 in the year ended March 31, 2026.

As the gross margin of the revenues from

our operating leasing decreased, our overall gross profit margin decreased to approximately 13.6% for the year ended March 31, 2026 from

approximately 30.2% for the year ended March 31, 2025.

Selling, General and Administrative Expenses

For the year ended March

31, 2026, selling, general and administrative expenses primarily consist of salary and employee benefits, rental expense, travel expenses,

and other expenses.

Selling, general and administrative expenses increased from $1,864,151 for the year ended March 31, 2025 to $2,426,333

for the year ended March 31, 2026, representing an increase of $562,182, or approximately 30.2%.

The increase was mainly due to (1) the

increase of $578,703 in professional service fees such as financial, market consulting due to our financing arrangements during the year

ended March 31, 2026;

(2) an increase of $42,657 in salary and employee benefits mainly due to the higher compensation scales for current executive officers;

and partly offset by (3) the decrease of $25,336 in offices rental and charges

in the year ended March 31, 2026.

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 we provided provision

for credit losses of $2,093,199 against receivables from Jinkailong for the year ended March 31, 2025.

We provided provision for credit

losses of $1,703,563 against receivables from Jinkailong, $17,974 against the security deposit not returned for over one year after the

end of the cooperation, and $1,557 and $2,652 against receivable and other receivable for unsettled balances from a historical customer,

respectively, for the year ended March 31, 2024.

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 year ended March 31, 2025.

for credit losses of $422,064 and $697,165 against receivables from Jinkailong for the years ended March 31, 2026 and 2025, respectively.

Stock-based compensation

In November 2025, we entered

into the Consulting Agreement with the Consultant, pursuant to which we engaged the Consultant to provide consulting services.

an aggregate of 200,000 shares of our common stock in November 2025 at $1.25 per share to settle the compensation for the services.

did not have similar transaction during the year ended March 31, 2025.

Other income (expenses), net

For the year ended March

31, 2025, we had other income, net of $211,254, which primarily consist of the (1) a gain of approximately $397,000 from deconsolidation

31, 2026, we had other income, net of $312,792, which primarily consist of the (1) a gain of $170,000 for voluntary waiver of compensation

by the Company’s former directors;

(2) penalty income of approximately $75,000 from the customers;

partially offset by (3) a loss of $197,000 from the termination

of an automobiles purchase agreement;

(4) the expense of approximately $78,000 for processing automobile violation fines;

(5) the expense

of approximately $25,000 for liquidated damages and compensation fee for litigation;

(6) the expense of approximately $20,000 from the

termination of our right-of-use assets for an exhibition hall we leased in Changsha;

and (7) the miscellaneous other income, net of approximately

(3) a gain of approximately $43,000

from historical debt forgiveness by service providers;

(4) income of approximately $22,000 from the disposal of our own automobiles used

for operating leases;

(5) the miscellaneous other income of approximately $16,000;

partially offset by (6) approximately $13,000 in offering

costs allocable to the derivative liabilities for our pre-funded warrants and November 2025 private placement warrants upon closing.

For the year ended March

31, 2024, we had other income, net of $358,192, which primarily consist of (1) penalty income of approximately $215,000 from the customers;

(2) the income of approximately $35,000 from the disposal of our right-of-use assets and our own vehicles used for operating leases;

(3) commission income of approximately $34,000 from an automobile supplier;

(4) aggregate subsidy from the local governments in Changsha

and Chengdu of approximately $23,000;

(5) income of approximately $18,000 from the additional deductions for input tax;

and (6) the miscellaneous

income of approximately $33,000.

Expense and Interest Expense on Finance Leases

We had no interest expense

for the year ended March 31, 2025, while the interest expense for the year ended March 31, 2024 was resulted from the borrowings of Corenel

from a financial institution for its automobile commercial insurance by installment.

expense on finance leases for the years ended March 31, 2025 and 2024 was $15,145 and $29,088, 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.

in Fair Value of Derivative Liabilities

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

The change in fair value of derivative liabilities for the years ended March 31, 2025 and 2024 was a gain of $204,242 and $212,949,

respectively.

The following table sets forth the breakdown of the gain in fair value of derivative liabilities for the years ended March

31, 2025 and 2024:

31, 2025, we had other expenses, net of $121,491, which primarily consist of (1) a loss of $197,000 from the termination of an automobiles

purchase agreement;

(2) the expense of approximately $20,000 from the termination of our right-of-use assets for an exhibition hall we

leased in Changsha;

(3) the miscellaneous income, net of approximately $1,000;

partially offset by (4) the penalty income of approximately

$97,000 from the customers.

Change in Fair Value of Derivative Liabilities

Warrants issued in our registered

direct offerings that took place in February 2021, May 2021 and November 2025, and the August 2020 underwritten public offering, and the

November 2021 and November 2025 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 years ended March 31, 2026 and 2025 was a gain

of $202,959 and $204,242, respectively.

The following table sets forth the breakdown of the gain (loss) in fair value of derivative liabilities

for the years ended March 31, 2026 and 2025:

For the Years Ended

- June 2019 registered direct offering

- August 2020 underwritten public offering

2 unchanged sentences

- November 2021 private placement

- November 2025 Private placement

- November 2025 registered direct offering

Total Change in Fair Value of Derivative Liabilities

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 years ended March 31, 2025, while we had current income tax of $20,206

represented the provision of enterprise income tax resulting from the taxable income from Jiekai for the year ended March 31, 2024.

loss from continuing operations

a result of the foregoing, net loss from continuing operations for the year ended March 31, 2025 was $3,467,165, representing a decrease

of $387,041 from net loss of $3,854,206 for the year ended March 31, 2024.

of Discontinued Operations for the year ended March 31, 2025 Compared to the year ended March 31, 2024

Excess of warrant fair value over offering proceeds

In November 2025, we issued

common shares, pre-funded warrants and the concurrent private placement warrants, generating aggregate gross proceeds of $2,841,300.

We concluded that these warrants qualify as liability instruments.

At the issuance date in November 2025, the fair value of the warrants

was estimated at $5,737,755 using the Black-Scholes valuation model, and the $2,896,455 excess of the warrants’ fair value over

the total offering proceeds was recognized as a loss in the consolidated statements of operations and comprehensive loss.

Income Tax Expense

Generally, our subsidiary

Hunan Ruixi is subject to enterprise income tax on its taxable income in China at a rate of 25%.

And the applicable tax rate of our HK

subsidiary, Senmiao HK, for the first HKD$2 million of assessable profits is 8.25% and assessable profits above HKD$2 million will continue

to be subject to the rate of 16.5% for corporations in Hong Kong.

The enterprise income tax is calculated based on the entity’s

global income as determined under PRC tax laws and accounting standards.

With the exception of Senmiao HK, which generated profits primarily

from tax-exempt interest income on bank deposits, all entities suffered losses.

Accordingly, no tax expense was recorded for the years

ended March 31, 2026 and 2025.

Net loss from continuing operations

As a result of the foregoing,

net loss from continuing operations for the year ended March 31, 2026 was $5,268,901, representing an increase of $3,362,060 from net

loss of $1,906,841 for the year ended March 31, 2025.

Results of Discontinued Operations for the

year ended March 31, 2026 Compared to the year ended March 31, 2025

For the Years Ended

7 unchanged sentences

Interest expense

Interest expense on finance leases

Loss before income taxes

Gain on disposal of discontinued operations

Income tax benefit

Net loss from discontinued operations

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

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.

the year ended March 31, 2025, 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 ride-hailing drivers completed rides and earned income through Xixingtianxia (the

“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.

the year ended March 31, 2024, approximately 4.9 million rides with gross fare of approximately $15.1 million were completed through

our Xixingtianxia platform and an average of over 5,000 Active Drivers each month.

XXTX earned online ride-hailing platform service fees

of $2,494,397, after netting off approximately $0.3 million incentives paid to Active Drivers.

of revenues from discontinued operations represents technical service charges, insurance and other expenses related to Online Ride-Hailing

Platform Services.

During the year ended March 31, 2025, cost of revenues decreased as compared with the year ended March 31, 2024, 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.

General and Administrative Expenses

general and administrative expenses from discontinued operations primarily consisted of (1) $64,734 in salary and employee benefits;

(2) $37,688 in depreciation of office equipment and amortization of intangible assets;

(3) $31,499 in entertainment, advertising and

and (4) other miscellaneous expenses in the year ended March 31, 2025.

primarily consisted of (1) $425,623 in salary and employee benefits;

$ (1,773,971 )

The result of discontinued

operations was the financial figures of our former subsidiary, XXTX and former subsidiaries in Sichuan.

As of December 31, 2025, we deconsolidated

former subsidiaries in Sichuan and its business result was included in our automobile transactions and related services before we deconsolidated

its financial figures.

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.

The following table sets

forth the breakdown of revenues by revenue source for years ended March 31, 2026 and 2025:

For the Years Ended

Revenue from automobile transactions and related services (discontinued operations)

- Operating lease revenues from automobile rentals

- Service fees from NEVs leasing

- Monthly services commissions

- Default revenue

- Other service fees

Total revenue from automobile transactions and related services (discontinued operations)

Revenue from online ride-hailing platform services (discontinued operations)

Total Revenue from discontinued operations

Revenue from automobile transactions and related

services (discontinued operations)

Revenue from our automobile

transaction and related services (discontinued operations) mainly includes operating lease revenues from automobile rentals, service fees

from NEVs leasing, monthly services commissions, default revenue and other services fees, which accounted for approximately 75.1%, 16.6%,

4.8%, 2.2% and 1.3%, respectively, of the total revenue from automobile transaction and related services from discontinued operations

during the year ended March 31, 2026.

Meanwhile, operating lease revenues from automobile rentals, service fees from NEVs leasing, monthly

services commissions, default revenue and other services fees, which accounted for approximately 74.7%,12.4%, 8.0%, 4.8% and 0.1%, respectively,

of the total revenue from automobile transaction and related services from discontinued operations during the year ended March 31, 2025.

Operating lease revenues from automobile rentals

Our former subsidiaries in

Sichuan generated revenues from leasing sub-leasing automobiles leased from third-parties and related parties or rendered by online ride-hailing

drivers with their authorization for a lease term of no more than twelve months.

Our former subsidiaries in Sichuan leased over 410 automobiles

with an average monthly rental income of approximately $392 per automobile, resulting in a rental income of $1,011,119, including rental

income of $79,203 from two related parties, for the year ended March 31, 2026.

Our former subsidiaries in Sichuan leased approximately

460 automobiles with an average monthly rental income of approximately $373 per automobile, resulting in a rental income of $1,115,880,

including rental income of $46,461 from Jinkailong and other related parties for the year ended March 31, 2025.

Service fees from NEVs leasing

Our former subsidiaries in

Sichuan generated revenues of $223,775 and $184,625 from leasing NEVs by charging leases service fees during the years ended March 31,

2026 and 2025, respectively.

The amount of services fees for NEVs leasing were based on our timely product solutions which adjusted in

accordance with different market conditions.

Monthly services commissions

Our former subsidiaries in

Sichuan generated revenues of $65,188 and $119,428 from the monthly management and related services provided to Partner Platforms during

the years ended March 31, 2026 and 2025, respectively.

Default revenue

Our former subsidiaries in

Sichuan generated default revenues of $30,190 and $71,975 from the automobile lessee’s early-termination of the contracts or other

violation behaviors to the contracts during the years ended March 31, 2026 and 2025, respectively.

Other Service fees

Our former subsidiaries in

Sichuan generate other revenues from other miscellaneous service fees charged to our customers during the years ended March 31, 2026 and

2025, which mainly include the maintenance fees charged to our customers pursuant to certain new product solutions.

Revenue from online ride-hailing platform services

(discontinued operations)

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 year ended March

31, 2025, 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 ride-hailing drivers completed rides and earned income through Xixingtianxia (the “Active Drivers”)

XXTX earned online ride-hailing platform service fees of $344,241, after netting off approximately $32,000 incentives paid

to Active Drivers.

Cost of Revenues

During the years ended March

31, 2026 and 2025, cost of revenues from discontinued operations of $919,715 and $1,214,822, respectively.

These costs represented the

amortization of ROUs, rental cost of automobiles, daily maintenance and insurance expense of automobiles which related to Auto Operating

Leasing, including $110,328 and $114,368 paid to related parties for rental costs of automobiles under operating leases for the years

ended March 31, 2026 and 2025, respectively.

During the year ended March

31, 2025, cost of revenues from discontinued operations of $247,025 represented the technical service charges, insurance and other expenses

which related to Online Ride-Hailing Platform Services.

Selling, General and Administrative Expenses

For the year ended March

31, 2026, selling, general and administrative expenses from discontinued operations related to Auto Operating Leasing, which amounted

to $928,071, primarily consisted of (1) $616,586 in outsourced operating services related to automobile lease;

(2) $183,298 in salary

and employee benefits;

(3) $86,660 in entertainment, advertising and promotion;

in depreciation of office equipment and amortization of intangible assets;

and (4) other miscellaneous expenses in the year ended March

for credit losses

the year ended March 31, 2025, 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.

income(expense), net

the year ended March 31, 2025, XXTX had other income, net of $33,214, which primarily due to the miscellaneous other income in its daily

the year ended March 31, 2024, XXTX had other expense, net of $42,742, which primarily due to the miscellaneous other expense in its

daily operations.

expense from discontinued operations was resulted from the borrowings of XXTX from a financial institution for its working capital turnover.

and (4) other miscellaneous expenses.

For the year ended March

31, 2025, selling, general and administrative expenses from discontinued operations related to Auto Operating Leasing, which amounted

to $759,969, primarily consisted of (1) $441,499 in salary and employee benefits;

(2) $181,646 in outsourced operating services related

to automobile lease;

(3) $106,526 in entertainment, advertising and promotion;

and (3) other miscellaneous expenses.

For the year ended March

31, 2025, selling, general and administrative expenses from discontinued operations related to Online Ride-Hailing Platform Services,

which amounted to $166,937 primarily consisted of (1) $64,859 in salary and employee benefits;

(2) $37,746 in depreciation of office equipment

and amortization of intangible assets;

(3) $32,187 in entertainment, advertising and promotion;

and (4) other miscellaneous expenses.

Provision for credit losses

For the years ended March

31, 2025 and March 31, 2024, XXTX had deferred tax benefit of $4,510 and $29,222, respectively, resulted from deferred tax, while all

the subsidiaries of XXTX suffered losses for the years ended March 31, 2025 and 2024, no income taxes were recorded for the corresponding

period accordingly.

loss from discontinued operations

a result of the foregoing, the net loss from discontinued operations for the year ended March 31, 2025 was $213,647.

While the net loss

from discontinued operations for the year ended March 31, 2024 was $380,008.

and Going Concern

We have financed our operations

primarily through proceeds from our equity offerings, stockholder loans, commercial debt, borrowings from financial institutions and cash

flow from operations.

had cash and cash equivalents of $833,577 as of March 31, 2025 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.

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 $3.7 million for the year ended March 31, 2025;

(2) accumulated deficit of approximately $45.1

31, 2026 and 2025, our former subsidiaries in Sichuan provided provision for credit losses of $253,942 and $1,396,034 against receivables

from Jinkailong, respectively.

For the year ended March

31, 2025, 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 year ended March 31, 2026, our former subsidiaries in Sichuan

had other income, net of $226,101 which was primarily due to deconsolidation of Corenel.

For the year ended March 31, 2025, our former subsidiaries in Sichuan

and XXTX had other expense, net of $65,030 and other income, net of $33,214, respectively, which was primarily due to the miscellaneous

income and expense in the daily operations.

Interest Expense and Interest expense on finance leases

There was no interest

expense or interest expense on finance leases from discontinued operations for the year ended March 31, 2026.

Interest expense from discontinued

operations for the year ended March 31, 2025 was resulted from the borrowings of XXTX from a financial institution for its working capital

Interest expense on finance

leases from discontinued operations for the year ended March 31, 2025 represented the interest expense accrued under finance 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.

Gain on disposal of discontinued operations

We had a gain of $426,766

from disposal of our former subsidiaries in Sichuan during the year ended March 31, 2026, and $397,775 from disposal of XXTX during the

year ended March 31, 2025, which was resulted from the net deficit of disposal entities, the realized accumulated other comprehensive

loss upon disposal of disposal entities and the consideration through us undertaking of certain liabilities.

Income Tax Benefit

For the year ended March

31, 2025, XXTX had deferred tax benefit of $4,510, which was resulted from recognition of deferred tax assets.

Net loss from discontinued operations

As a result of the foregoing,

the net losses from discontinued operations for the years ended March 31, 2026 and 2025 was $102,603 and $1,773,971, respectively.

Liquidity and Capital Resources

In assessing liquidity, we monitor and analyze our cash on-hand and

our operating and capital expenditure commitments.

Our 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 our

working capital requirements.

Our business is capital intensive,

and certain factors show negative trends in its liquidity position, including (1) the net loss of approximately $5.4 million for the year

ended March 31, 2026;

(2) accumulated deficit of approximately $50.4 million as of March 31, 2026;

(3) $1.1 million of net cash outflows

in operating activities from continuing operations for the year ended March 31, 2026, and (4) the net working capital deficit of approximately

$3.7 million as of March 31, 2026.

(3) the working capital deficit of approximately $3.0 million as of March 31, 2025.

We do not believe that the

proceeds from our future 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;

financial support and credit

guarantee commitments from our related parties.

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.

However, recent financing

arrangements have materially strengthened our cash position.

Management evaluated and concluded that the factors aforementioned did not

raise substantial doubt as to our ability to continue as a going concern.

On April 23, 2026, we entered

into a certain securities purchase agreement with certain purchasers to sell an aggregate of up to 10,000,000 units (the “Units”),

each Unit consisting of one (1) share of its common stock, par value $0.0001 per share, and four (4) warrants, each to purchase one (1)

share of common stock, at a purchase price of $1.10 per Unit (the “April 2026 Units Private Placement”).

The aggregate gross

proceeds to the Company from the Offering, all Units are sold, is approximately $11.0 million.

We believe that our cash

balance of approximately $3.6 million as of March 31, 2026, together with the additional gross proceeds of approximately $11.0 million

collected from the April 2026 Units Private Placement, will be sufficient to meet our working capital needs in the next 12 months from

the date the audited consolidated financial statements are issued.

If we experienced an adverse operating environment or incurred unanticipated

capital expenditure requirements, or if we determined to accelerate our growth, then additional financing may be required.

The following table summarizes

our cash flows:

For the Years Ended

Net Cash Provided by Operating Activities

Net Cash (Used in) Provided by Operating Activities from Continuing Operations

$ (1,136,464 )

Net Cash (Used in) Provided by Operating Activities from Discontinued Operations

Net Cash (Used in) Provided by Operating Activities

Net Cash (Used in) Provided by Investing Activities from Continuing Operations

Net Cash Used in Investing Activities from Discontinued Operations

Net Cash Used in Investing Activities

Net Cash Used in Financing Activities

Net Cash Provided by (Used in) Financing Activities from Continuing Operations

Net Cash Provided by (Used in) Financing Activities from Discontinued Operations

Net Cash Provided by (Used in) Financing Activities

Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash

Cash, Cash Equivalents and Restricted Cash at Beginning of the Year

Cash, Cash Equivalents and Restricted Cash at End of the Year

Cash and cash equivalents from discontinued operations

Cash, Cash equivalents and Restricted Cash from continuing operations, End of Year

Flow in Operating Activities

Cash, Cash Equivalents and Restricted Cash, Beginning of the Year

Cash, Cash Equivalents and Restricted Cash, End of the Year

Cash, Cash Equivalents and Restricted Cash from discontinued operations

Cash from continuing operations, End of Year

Cash Flow in Operating Activities

For the year ended March

2025, net cash provided by operating activities was $500,303, which consisted of net cash inflows of $574,072 from continuing operations

and net cash outflows of $73,769 from discontinued operations.

While for the year ended March 31, 2024, net cash provided by operating

activities was $7,241, which consisted of net cash inflows of $310,241 from continuing operations and net cash outflows of $303,000 from

discontinued operations.

The increase of $263,831 in

net cash provided by operating activities from continuing operations for the year ended March 31, 2025 as compared with the year ended

March 31, 2024 was primarily attributable to (1) decrease of $387,041 in net loss;

(2) increase of $367,453 in the provision for credit

(3) increase of $265,541 in the change of Operating lease liabilities (both third parties and related parties);

of $210,973 in the change of other receivables due from related parties;

(5) the loss of $196,777 from termination of automobiles purchase;

and partially offset by (6) non-incurrence of $444,300 in stock-based compensation in the year ended March 31, 2025 as compared with

it in the same period in 2024;

(7) the gain of $397,003 from deconsolidation of XXTX;

(8) decrease of $138,510 in the change of balance

due to related parties;

(9) decrease of $107,702 in amortization of right-of-use assets;

and (10) decrease of $96,024 in the change of

accounts receivable (both third parties and a related party).

Flow in Investing Activities

31, 2026, net cash used in operating activities was $1,601,561, which consisted of the net outflows of $1,136,464 from continuing operations

and $465,097 from discontinued operations.

While for the year ended March 31, 2025, net cash provided by operating activities was $500,303,

which consisted of net cash inflows of $325,873 from continuing operations and $174,430 from discontinued operations.

The increase of

$1,462,337 in net cash used in operating activities from continuing operations for the year ended March 31, 2026 as compared with

the year ended March 31, 2025 was primarily attributable to (1) increase of $3,362,060 in net loss from continuing operations;

decrease of $714,166 in the change of accrued expenses and other liabilities (both third parties and due to a related party);

decrease of $275,101 in the provision for credit losses;

(4) non-incurrence of the loss of $196,777 from termination of automobiles

purchase in the year ended March 31, 2026 as compared with it in the same period in 2025;

(5) a gain of $170,00 for voluntary waiver

of compensation by the company’s former directors in the year ended March 31, 2026;

(6) decrease of $114,171 in the change of

accounts payable;

(7) a gain of $42,581 from debt forgiveness by service providers in the year ended March 31, 2026;

and partially

offset by (8) a loss of $2,896,455 arising from excess of the warrants’ fair value over the total offering proceeds from the

November 2025 issuance of common shares, pre-funded warrants and concurrent private placement warrants;

(9) increase of $318,774 in

the prepayments, other receivables and other assets;

(10) $250,000 increased in stock-based compensation in the year ended March 31,

Cash Flow in Investing Activities

For the year ended March

31, 2025, we had net cash used in investing activities of $464,778, which consisted of the net cash outflows of $464,827 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 $336,397;

(2) the cash of $143,589 released upon disposal of XXTX, (3) the purchase furniture

for office purpose of $1,602, partially offset by (4) the proceeds from sales of the used automobiles of $16,761.

31, 2026, we had net cash used in investing activities of $193,939 from continuing operations, which consisted of (1) the loan to a related

party of $229,469;

partially offset by (2) the proceeds from sales of the used-automobiles of $35,530.

For the year ended March

31, 2024, we had net cash used in investing activities of $569,608, which consisted of the net cash outflows of $569,767 from continuing

operations and net cash inflows of $159 from discontinued operations.

The majority of net cash used in investing activities was $671,679

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 $101,912.

Flow in Financing Activities

31, 2025, we had net cash used in investing activities of $464,778, which consisted of the net inflows of $16,346 from continuing operations

and net outflows of $481,124 from discontinued operations.

The majority of net cash provided by investing activities from continuing operations

was (1) the proceeds from sales of the used-automobiles of $16,761;

partially offset by (2) the purchase furniture for office purpose

Cash Flow in Financing Activities

For the year ended March

31, 2025, we had net cash used in financing activities of $123,720, which consisted of net cash outflows of $42,427 from continuing operations

and net cash outflows of $81,293 from discontinued operations.

The majority of net cash used in financing activities from continuing operations consisted of:

(1) principal payments made for finance lease liabilities of $44,345;

(2) repayments to a related party of $11,940;

partially offset by

(3) repayments from a related party of $13,858.

While the net cash used in financing activities from discontinued operations consisted of:

(1) repayment of current borrowings to a financial

institution of $59,389;

and (2) repayment to a related party of $21,904.

31, 2026, we had net cash provided by financing activities of $4,419,010, which consisted of the net inflows of $4,338,910 from continuing

operations and net inflows of $80,100 from discontinued operations.

The majority of net cash provided by financing activities from continuing

operations consisted of:

(1) net proceeds of $659,992 from the exercise of November 2021 Private Placement Warrants from an investor;

(2) net proceeds of $341,251from issuance of common stock in PIPE Offering in November 2025;

(3) net proceeds of $2,828,725 from issuance

of common stock and pre-funded warrants in registered direct offering and concurrent private placement of warrants in November 2025;

borrowings from related parties of $778,307;

partially offset by (5) repayments to related parties of $269,365.

For the year ended March

31, 2024, we had net cash used in financing activities of $168,340, which consisted of the net cash outflows of $391,605 from continuing

operations and net cash inflows of $223,265 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 $215,443;

(2) repayments to related parties and affiliates

and (3) repayment of current borrowings to a financial institution of $8,445;

partially offset by (4) repayment from a related

party of $339,049.

While the net cash provided by financing activities from discontinued operations primarily attributable to the borrowings

from a financial institution of $249,297.

Sheet Arrangements

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:

31, 2025, we had net cash used in financing activities of $123,720, which consisted net outflows of $11,940 from continuing operations

and $111,780 from discontinued operations.

The net cash used in financing activities financing activities from continuing operations was

repayments to a related party.

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

September 23, 2022, we entered into an automobile purchase agreement with a third party to purchase a total of 100 automobiles for the

amount of approximately $1.5 million, and we have terminated the purchase agreement on March 31, 2025.

As of the filing date of this

Report, we have no purchase commitment.

As of the filing date of

this Report, we have no purchase commitment.

Contingent Liabilities

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,

As of March 31, 2025, 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 $482,000).

According to the Registered Capital Registration Implementing Rules, Hunan Ruixi

shall pay the subscribed capital of Jinkailong before June 30, 2032.

do not believe our business and operations have been materially affected by inflation.

Accounting Estimates

consolidated financial statements and accompanying notes have been prepared in accordance with U.S.

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.

the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates.

Some of our accounting policies require a higher degree of judgment than others in their application.

The management determined there

were no critical accounting estimates.

reading our 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

(ii) accounts receivable, net;

(iii) property and equipment, net;

(iv) revenue recognition;

and (v) leases - lessee.

Note 3—Summary of Significant Accounting Policies to our consolidated financial statements for the disclosure of these accounting

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.

31, 2026, Hunan Ruixi holds 35% of equity interest of Jinkailong and has not made any payments towards the investment amounting to RMB3.5

million (approximately $507,000).

According to the Registered Capital Registration Implementing Rules, Hunan Ruixi shall pay the subscribed

capital of Jinkailong before June 30, 2032.

We do not believe our business

and operations have been materially affected by inflation.

Critical Accounting Estimates

Our consolidated financial

statements and accompanying notes have been prepared in accordance with U.S.

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.

Since the use of estimates

is an integral component of the financial reporting process, our actual results could differ from those estimates.

Some of our accounting

policies require a higher degree of judgment than others in their application.

The management determined there were no critical accounting

When reading our 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) property and equipment, net;

(ii) revenue recognition.

See Note 3—Summary of Significant

Accounting Policies to our consolidated financial statements for the disclosure of these accounting policies.

Recent Developments

Private Placement

On November 14, 2025, the

Company entered into a securities purchase agreement with certain accredited investors, providing for (i) the issuance of 1,350,000 shares

of common stock, par value $0.0001 per share, and 905,000 pre-funded warrants to purchase 905,000 shares of the common stock, at a purchase

price of $1.26 per share, in a registered direct offering for aggregate gross proceeds of approximately $2.8 million, and (ii) the concurrent

4,510,000 private placement warrants to purchase up to 4,510,000 shares of common stock (the “November 2025 Private Placement”).

The common stock and pre-funded warrants were issued on November 17, 2025.

The 905,000 pre-funded warrants have an exercise price of $0.0001

per share of common stock, are immediately exercisable and remain exercisable until exercised in full.

The 4,510,000 private placement

warrants were issued on June 25, 2026, have an exercise price of $1.26 per share of common stock, and have a term of 5.5 years and are

exercisable at any time on or after the initial exercisability date.

On April 23, 2026, we entered

into a certain securities purchase agreement with certain purchasers, pursuant to which we agreed to sell an aggregate of up to 10,000,000

units (the “Units”), each Unit consisting of one (1) share of its common stock, par value $0.0001 per share, and four (4)

warrants, each to purchase one (1) share of common Stock (the “April 2026 Units Private Placement”), at a purchase price of

$1.10 per Unit.

The April 2026 Units Private Placement closed on June 25, 2026.

All Units were sold, and the aggregate gross proceeds

from the April 2026 Units Private Placement were approximately $11.0 million.

Quantitative and Qualitative Disclosures about Market Risk

required for smaller reporting companies.

Not required for smaller reporting companies.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis