Senmiao Technology Ltd 10-K

Item 8. Financial Statements and Supplementary Data The financial statements required by this item begin on page F-1 to F-42 hereof. Index to Financial Statements Report of Independent Registered Public Accounting Firm (PCOAB ID: 5395 ) F-2 Financial Statements: Consolidated Balance Sheets as of March 31, 2026 and 2025 F-3 Consolidated Statements of Operations and Comprehensive Loss for the Years Ended March 31, 2026 and 2025 F-4 Consolidated Statements of Changes in Equity (Deficit) for the Years Ended March 31, 2026 and 2025 F-5 Consolidated Statements of Cash Flows for the Years Ended March 31, 2026 and 2025 F-6 Notes to Consolidated Financial Statements F-7 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of Directors of Senmiao Technology Limited Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Senmiao Technology Limited (the “Company”) as of March 31, 2026 and 2025, the related consolidated statements of operations and comprehensive loss, changes in equity (deficit) and cash flows for each of the two years in the period ended March 31, 2026, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2026 and 2025, and the results of its operations and its cash flows for each of the two years in the period ended March 31, 2026, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. /s/ Marcum Asia CPAs LLP Marcum Asia CPAs LLP We have served as the Company’s auditor since 2018. (such date takes into account the acquisition of certain assets of Friedman LLP by Marcum Asia CPAs LLP effective September 1, 2022). New York. New York June 30, 2026 F- 2 SENMIAO TECHNOLOGY LIMITED CONSOLIDATED BALANCE SHEETS (Expressed in U.S. dollar, except for the number of shares) March 31, March 31, 2026 2025 ASSETS Current assets Cash $ 3,562,219 $ 701,302 Accounts receivable — 8,963 Finance lease receivables, current 44,454 166,339 Prepayments, other receivables and other current assets 471,001 781,587 Due from a related party, net, current 14,497 81,098 Current assets - discontinued operations — 499,473 Total current assets 4,092,171 2,238,762 Property and equipment, net 812,934 1,649,987 Other assets Operating lease right-of-use assets, net, a related party 47,520 6,910 Intangible assets, net 300,000 375,000 Finance lease receivables, non-current 5,052 23,193 Due from a related party, net, non-current — 422,064 Other assets - discontinued operations — 1,084,876 Total other assets 352,572 1,912,043 Total assets $ 5,257,677 $ 5,800,792 LIABILITIES, MEZZANINE EQUITY AND EQUITY/DEFICIT Current liabilities Accounts payable 103,563 124,470 Advances from customers 86,768 103,897 Accrued expenses and other liabilities 1,166,464 1,771,072 Due to related parties 747,094 414 Operating lease liabilities, current, a related party 58,023 10,365 Derivative liabilities 5,615,288 84,591 Current liabilities - discontinued operations — 3,123,363 Total current liabilities 7,777,200 5,218,172 Total liabilities 7,777,200 5,218,172 Commitments and contingencies (note 17) Mezzanine Equity Series A convertible preferred stock (par value $ 1,000 per share, 5,000 shares authorized; 262 and 991 shares issued and outstanding at March 31, 2026 and 2025, respectively) 42,943 234,364 Stockholders’ deficit Common stock (par value $ 0.0001 per share, 50,000,000 shares authorized; 4,557,489 and 1,051,804 shares issued and outstanding at March 31, 2026 and 2025, respectively) * 456 105 Additional paid-in capital 45,397,481 43,951,069 Accumulated deficit ( 50,379,773 ) ( 45,109,573 ) Accumulated other comprehensive loss ( 851,569 ) ( 1,697,164 ) Total Senmiao Technology Limited stockholders’ deficit ( 5,833,405 ) ( 2,855,563 ) Non-controlling interests 3,270,939 3,203,819 Total (deficit) equity ( 2,562,466 ) 348,256 Total liabilities, mezzanine equity and equity/deficit $ 5,257,677 $ 5,800,792 * Giving retroactive effect to the 1-for-10 reverse stock split effected on July 29, 2025 The accompanying notes are an integral part of the consolidated financial statements F- 3 SENMIAO TECHNOLOGY LIMITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Expressed in U.S. dollar, except for the number of shares) For the Years Ended March 31, 2026 2025 Revenues $ 1,546,127 $ 1,896,171 Cost of revenues ( 1,335,927 ) ( 1,324,447 ) Gross profit 210,200 571,724 Operating expenses Selling, general and administrative expenses ( 2,426,333 ) ( 1,864,151 ) Provision for credit losses ( 422,064 ) ( 697,165 ) Stock-based compensation ( 250,000 ) — Total operating expenses ( 3,098,397 ) ( 2,561,316 ) Loss from operations ( 2,888,197 ) ( 1,989,592 ) Other (expenses) income Other income (expenses), net 312,792 ( 121,491 ) Change in fair value of derivative liabilities 202,959 204,242 Excess of warrant fair value over offering proceeds ( 2,896,455 ) — Total other (expenses) income, net ( 2,380,704 ) 82,751 Loss before income tax expense ( 5,268,901 ) ( 1,906,841 ) Income tax expense — — Net Loss from continuing operations ( 5,268,901 ) ( 1,906,841 ) Discontinued operations: Loss before income taxes from operations of discontinued operations ( 529,369 ) ( 2,176,256 ) Gain on disposal of discontinued operations 426,766 397,775 Income tax benefits — 4,510 Net loss from discontinued operations ( 102,603 ) ( 1,773,971 ) Net loss ( 5,371,504 ) ( 3,680,812 ) Net (income) loss attributable to non-controlling interests 101,304 ( 44,493 ) Net loss attributable to the Company’s stockholders $ ( 5,270,200 ) $ ( 3,725,305 ) Net loss $ ( 5,371,504 ) $ ( 3,680,812 ) Other comprehensive loss Foreign currency translation adjustment ( 176,161 ) ( 24,936 ) Comprehensive loss ( 5,547,665 ) ( 3,705,748 ) less: Total comprehensive (loss) income attributable to non-controlling interests ( 256,152 ) 44,716 Total comprehensive loss attributable to stockholders $ ( 5,291,513 ) $ ( 3,750,464 ) Weighted average number of common stock* Basic and diluted 2,675,178 1,052,122 Loss per share - basic and diluted* ( 1.97 ) ( 3.54 ) Loss per share - basic and diluted Continuing operations $ ( 1.93 ) $ ( 1.85 ) Discontinued operations $ ( 0.04 ) $ ( 1.69 ) * Giving retroactive effect to the 1-for-10 reverse stock split effected on July 29, 2025 The accompanying notes are an integral part of the consolidated financial statements F- 4 SENMIAO TECHNOLOGY LIMITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT) For the years ended March 31, 2026 and 2025 (Expressed in U.S. dollar, except for the number of shares) Accumulated Additional other Non- Total Common stock paid-in Accumulated comprehensive controlling Equity Shares* Par value capital deficit loss interest (Deficit) BALANCE, March 31, 2024 1,051,804 $ 105 $ 43,951,069 $ ( 41,384,268 ) $ ( 1,672,005 ) $ 3,159,103 $ 4,054,004 Net loss — — — ( 3,725,305 ) — 44,493 ( 3,680,812 ) Foreign currency translation adjustment — — — — ( 25,159 ) 223 ( 24,936 ) BALANCE, March 31, 2025 1,051,804 $ 105 $ 43,951,069 $ ( 45,109,573 ) $ ( 1,697,164 ) $ 3,203,819 $ 348,256 Net loss — — — ( 5,270,200 ) — ( 101,304 ) ( 5,371,504 ) Exercise of November 2021 Private Placement Warrants 73,357 7 341,244 — — — 341,251 Cashless exercise of November 2021 Investor warrants into common stock 1,345,820 135 ( 135 ) — — — — Fair value of derivative liabilities upon exercise of warrants — — 4,099 — — — 4,099 Conversion of preferred stock into common stock 36,471 4 191,417 — — — 191,421 Additional shares of common stock round up adjustment due to retroactive effect of 1-for-10 reverse stock split 37 — — — — — — Issuance of common stock in PIPE Offering, net of issuance costs 500,000 50 659,942 — — — 659,992 Issuance of common stock for consulting services 200,000 20 249,980 — — — 250,000 Issuance of common stock in registered direct offering with concurrent private placement warrants 1,350,000 135 ( 135 ) — — — — Deconsolidation of discontinued operations — — — — 866,908 323,272 1,190,180 Foreign currency translation adjustment — — — — ( 21,313 ) ( 154,848 ) ( 176,161 ) BALANCE, March 31, 2026 4,557,489 $ 456 $ 45,397,481 $ ( 50,379,773 ) $ ( 851,569 ) $ 3,270,939 $ ( 2,562,466 ) * Giving retroactive effect to the 1-for-10 reverse stock split effected on July 29, 2025 The accompanying notes are an integral part of the consolidated financial statements F- 5 SENMIAO TECHNOLOGY LIMITED CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in U.S. dollar, except for the number of shares) For the Years Ended March 31, 2026 2025 Cash Flows from Operating Activities: Net loss $ ( 5,371,504 ) $ ( 3,680,812 ) Net loss from discontinued operations ( 102,603 ) ( 1,773,971 ) Net loss from continuing operations ( 5,268,901 ) ( 1,906,841 ) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation of property and equipment 881,130 911,051 Stock compensation expense 250,000 — Amortization of right-of-use assets 38,508 53,272 Amortization of intangible assets 75,000 75,000 Provision for credit losses 422,064 697,165 Gain on disposal of equipment ( 21,923 ) ( 4,020 ) Excess of warrant fair value over offering proceeds 2,896,455 — Offering costs allocable to derivative liabilities 12,575 — Gain from debt forgiveness ( 42,581 ) — Gain from voluntary waiver of compensation by related parties ( 170,000 ) — Loss from lease modification or termination — 19,636 Loss from termination of automobiles purchase — 196,777 Change in fair value of derivative liabilities ( 202,959 ) ( 204,242 ) Change in operating assets and liabilities Accounts receivable 9,158 2,441 Finance lease receivables 153,504 148,134 Prepayments, other receivables and other assets 335,428 16,654 Due from related parties 60,919 69,288 Accounts payable ( 26,595 ) 87,576 Advances from customers ( 21,886 ) ( 18,050 ) Accrued expenses and other liabilities ( 731,618 ) 229,642 Due to related parties 247,094 — Operating lease liabilities — ( 6,263 ) Operating lease liabilities, related parties ( 31,836 ) ( 41,347 ) Net Cash (Used in) Provided by Operating Activities from Continuing Operations ( 1,136,464 ) 325,873 Net Cash (Used in) Provided by Operating Activities from Discontinued Operations ( 465,097 ) 174,430 Net Cash (Used in) Provided by Operating Activities ( 1,601,561 ) 500,303 Cash Flows from Investing Activities: Purchases of property and equipment — ( 415 ) Cash received from disposal of property and equipment 35,530 16,761 Loan to a related party ( 229,469 ) — Net Cash (Used in) Provided by Investing Activities from Continuing Operations ( 193,939 ) 16,346 Net Cash Used in Investing Activities from Discontinued Operations — ( 481,124 ) Net Cash Used in Investing Activities ( 193,939 ) ( 464,778 ) Cash Flows from Financing Activities: Net proceeds from exercise of November 2021 Private Placement Warrants 341,251 — Net proceeds from issuance of common stock in PIPE Offering 659,992 — Net proceeds from registered direct offering of common stock and pre-funded warrants, and concurrent private placement of warrants 2,828,725 — Borrowings from related parties 778,307 — Repayments to related parties ( 269,365 ) ( 11,940 ) Net Cash Provided by (Used in) Financing Activities from Continuing Operations 4,338,910 ( 11,940 ) Net Cash Provided by (Used in) Financing Activities from Discontinued Operations 80,100 ( 111,780 ) Net Cash Provided by (Used in) Financing Activities 4,419,010 ( 123,720 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash 142,734 127,136 Net increase in cash, cash equivalents and restricted cash 2,766,244 38,941 Cash, cash equivalents and restricted cash, beginning of the year 833,577 794,636 Cash, cash equivalents and restricted cash, end of the year 3,599,821 833,577 Less: Cash, cash equivalents and restricted cash from discontinued operations ( 37,602 ) ( 132,275 ) Cash from continuing operations, end of year 3,562,219 701,302 Non-cash Transaction in Investing and Financing Activities Termination of right-of use assets and lease liabilities $ — $ 47,563 Recognition of right-of-use assets and lease liabilities, a related party $ 77,603 $ — Offset of loans due from a related party against accrued salary payable $ 221,389 $ — The following tables provide a reconciliation of cash, cash equivalent and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows: For the Years Ended March 31, 2026 2025 Cash from continuing operations, end of the year $ 3,562,219 $ 701,302 Cash and cash equivalent from discontinued operations, end of the year $ — $ 132,275 For the Years Ended March 31, 2026 2025 Cash from continuing operations, beginning of the year $ 701,302 $ 649,591 Cash and cash equivalent from discontinued operations, beginning of the year $ 132,275 $ 142,708 Restricted cash from discontinued operations, beginning of the year $ — $ 2,337 The accompanying notes are an integral part of the consolidated financial statements F- 6 SENMIAO TECHNOLOGY LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. ORGANIZATION AND PRINCIPAL ACTIVITIES Senmiao Technology Limited (the “Company”) is a U.S. holding company incorporated in the State of Nevada on June 8, 2017 . The Company operates its business in one segment: automobile transaction and related services focusing on the online ride-hailing industry in the People’s Republic of China (“PRC” or “China”) through the Company’s affiliated entities, Hunan Ruixi Business Operation Management Co., Ltd., a PRC limited liability company, a subsidiary which is formerly known as Hunan Ruixi Financial Leasing Co., Ltd. (“Hunan Ruixi”), and Sichuan Jinkailong Automobile Leasing Co., Ltd. (“Jinkailong”), a PRC limited liability company, an equity investee in which the Company holds 35 % of the equity interests. Hunan Ruixi holds a business license for automobile sales and has been engaged in automobile sales since January 2019. Hunan Ruixi also held a business license for automobile finance lease and was engaged in automobile finance lease services from March 2019 through July 31, 2025, the date of cessation. The Company also has been engaged in operating leasing services since March 2019. Jinkailong previously focused on providing automobile sales and financing transactions primarily to ride-hailing drivers and now mainly provides them operating lease and relevant after-transaction services. 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 100 % of the equity interests in its former wholly owned subsidiaries, Sichuan Senmiao Yicheng Assets Management Co., Ltd. (“Yicheng”), Sichuan Senmiao Zecheng Business Consulting Co., Ltd. (“Senmiao Consulting”) and its subsidiaries (together referred to as the “Disposed Entities”), to HMST for nil consideration, while the Company undertook certain liabilities of $ 518,388 which were previously assumed by the Disposed Entities (the “Disposition”). On December 31, 2025, the Disposition was completed and the Company disposed of its 100 % equity interest in Yicheng and Senmiao Consulting (refer to Note 4). After the Disposition, the Company discontinued its own automobile transaction and related services in Sichuan Province in China. The Company also used to operate online ride-hailing platform services through its own platform (known as Xixingtianxia) from October 2020 to August 2024, through Hunan Xixingtianxia Technology Co., Ltd., a PRC limited liability company (“XXTX”), which was a former wholly owned subsidiary of Senmiao Consulting. The Company’s ride hailing platform enabled qualified ride-hailing drivers to provide transportation services in several cities in China. On August 8, 2024, Senmiao Consulting entered into another Acquisition Agreement with Debt Assumption Takeover (the “XXTX Acquisition Agreement”) with Jiangsu Yuelaiyuexing Technology Co., Ltd. (the “Purchaser”), and other parties thereto, in connection with the acquisition (the “Acquisition”) by the Purchaser of 100 % of the Company’s equity interest in XXTX and its subsidiaries. On August 20, 2024, the Acquisition was completed and Senmiao Consulting disposed its 100 % equity interest in XXTX and its subsidiaries (refer to Note 4). After the disposition of XXTX, the Company operates its business in one segment. F- 7 The following diagram illustrates the Company’s corporate structure as of the filing date of these consolidated financial statements: Former Voting Agreements with Jinkailong’s Other Shareholders Hunan Ruixi entered into two voting agreements signed in August 2018 and February 2020, respectively, as amended (the “Voting Agreements”), with Jinkailong and other Jinkailong’s shareholders holding an aggregate of 65 % equity interests. Pursuant to the Voting Agreements, all other Jinkailong’s shareholders will vote in concert with Hunan Ruixi on all fundamental corporate transactions in the event of a disagreement for periods of 20 years and 18 years, respectively, ending on August 25, 2038. On March 31, 2022, Hunan Ruixi entered into an Agreement for the Termination of the Agreement for Concerted Action by Shareholders of Jinkailong (the “Termination Agreement”), pursuant to which the Voting Agreements mentioned above was terminated as of the date of the Termination Agreement. The termination will not impair the past and future legitimate rights and interests of all parties in Jinkailong. Starting from April 1, 2022, the parties no longer maintain a concerted action relationship with respect to the decision required to take concerted action at its shareholders meetings as stipulated in the Voting Agreements. Each party shall independently express opinions and exercise various rights such as voting rights and perform relevant obligations in accordance with the provisions of laws, regulations, normative documents and the Jinkailong’s articles of association. As a result of the Termination Agreement, the Company no longer has a controlling financial interest in Jinkailong and has determined that Jinkailong was deconsolidated from the Company’s consolidated financial statements effective as of March 31, 2022. However, as Hunan Ruixi still holds 35 % equity interests in Jinkailong, Jinkailong is the equity investee company of the Company since then. As of March 31, 2026 and 2025, the continuing operations of the Company has outstanding balance due from Jinkailong amounted to $ 0 and $ 422,064 , respectively, net of allowance for credit losses, which was classified as due from a related party, net, non-current (refer to Note 14). As of March 31, 2026 and 2025, allowance for credit losses due from Jinkailong amounted to $ 2,517,552 and $ 1,971,045 , respectively. During the years ended March 31, 2026 and 2025, the continuing operations of the Company recorded provision for credit losses against the balance due from Jinkailong of $ 422,064 and $ 697,165 , respectively. F- 8 2. LIQUIDITY AND CAPITAL RESOURCES In assessing the Company’s liquidity, the Company monitors and analyzes its cash on-hand and its operating and capital expenditure commitments. The Company’s liquidity needs are to meet its working capital requirements, operating expenses and capital expenditure obligations. Debt financing from financial institutions and equity financings have been utilized to finance the working capital requirements of the Company. The Company’s business is capital intensive, 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 working capital deficit of approximately $ 3.7 million as of March 31, 2026. However, recent financing arrangements have materially strengthened the Company’s cash position. Management evaluated and concluded that the factors aforementioned did not raise substantial doubt as to the Company’s ability to continue as a going concern. Management believes that the Company’s 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 (refer to note 20), will be sufficient to meet the Company’s working capital needs in the next 12 months from the date the audited consolidated financial statements are issued. If the Company experienced an adverse operating environment or incurred unanticipated capital expenditure requirements, or if the Company’s determined to accelerate its growth, then additional financing may be required. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of presentation The consolidated financial statements, including the consolidated balance sheets as of March 31, 2026, the consolidated statements of operations and comprehensive loss, the consolidated statements of changes in equity (deficit), and the consolidated statements of cash flows for the years ended March 31, 2026 and 2025, as well as other information disclosed in the accompanying notes, have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and pursuant to the rules and regulations of the SEC and pursuant to Regulation S-X. The consolidated financial statements include the accounts of the Company and include the assets, liabilities, revenues, and expenses of the subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors. All adjustments (including normal recurring adjustments) necessary to present a fair statement of the Company’s financial position as of March 31, 2026, its results of operations for the year ended March 31, 2026 and its cash flows for the year ended March 31, 2026, as applicable, have been made. F- 9 (b) Comparability and retrospective reclassification adjustments of prior period The Company has reclassified certain comparative balances in the consolidated balance sheet as of March 31, 2025 and certain comparative amounts in the consolidated statements of operations and comprehensive loss for the year ended March 31, 2025 to conform to the current year’s presentation, as a result of the retrospective application of discontinued operations (refer to Note 4) in accordance with ASC 205-20-45. The assets and liabilities of the discontinued operations have been classified as current assets of discontinued operations, other assets of discontinued operations and current liabilities of discontinued operations in the consolidated balance sheet as of March 31, 2025. The results of discontinued operations for the year ended March 31, 2025 have been reflected separately in the consolidated statements of operations and comprehensive loss as a single line item presented in accordance with U.S. GAAP. Cash flows from discontinued operations of the three categories for the year ended March 31, 2025 were separately presented in the consolidated statements of cash flows for all periods presented in accordance with U.S. GAAP. (c) Foreign currency translation Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing on the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates on the date of the balance sheet. The resulting exchange differences are recorded in the statement of operations. The reporting currency of the Company and its subsidiaries is U.S. dollars (“US$”) and the consolidated financial statements have been expressed in US$. However, the Company’s PRC subsidiary maintains the books and records in its functional currency, Chinese Renminbi (“RMB”), being the functional currency of the economic environment in which its operations are conducted. In general, for consolidation purposes, assets and liabilities of the Company and its subsidiaries whose functional currency is not the US$, are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of the Company and its subsidiaries are recorded as a separate component of accumulated other comprehensive loss within the consolidated statements of changes in equity (deficit). Translation of amounts from RMB into US$ has been made at the following exchange rates for the respective periods: March 31, March 31, 2026 2025 Balance sheet items, except for equity accounts – RMB: US$1: 6.8980 7.2567 For the years ended March 31, 2026 2025 Items in the statements of operations and comprehensive loss, and cash flows – RMB: US$1: 7.1019 7.2163 (d) Use of estimates In presenting the consolidated financial statements in accordance with U.S. GAAP, management makes estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. The Company bases its estimates on past experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Estimates are used when accounting for items and matters including, but not limited to, revenue recognition, residual values of property and equipment, lease liabilities, right-of-use assets, determinations of the useful lives and valuation of long-lived assets, estimates of allowances for credit losses for receivables and due from related parties, estimates of impairment of long-lived assets, fair value of derivative liabilities, valuation for share-based awards, and valuation of deferred tax assets. F- 10 (e) Fair values of financial instruments Accounting Standards Codification (“ASC”) Topic 825, Financial Instruments (“Topic 825”) requires disclosure of fair value information of financial instruments, whether or not recognized in the balance sheets, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Topic 825 excludes certain financial instruments and all nonfinancial assets and liabilities from its disclosure requirements. Accordingly, the aggregate fair value amounts do not represent the underlying value of the Company. The three levels of valuation hierarchy are defined as follows: Level 1 Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value. The following table sets forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2026 and 2025: Carrying Value as of Fair Value Measurement as of March 31, March 31, 2026 2026 Level 1 Level 2 Level 3 Derivative liabilities $ 5,615,288 $ — $ — $ 5,615,288 Carrying Value as of Fair Value Measurement as of March 31, March 31, 2025 2025 Level 1 Level 2 Level 3 Derivative liabilities $ 84,591 $ — $ — $ 84,591 F- 11 The following is a reconciliation of the beginning and ending balance of the assets and liabilities measured at fair value on a recurring basis for the years ended March 31, 2026 and 2025: August 2020 Underwritten Public February 2021 Registered Direct May 2021 Registered Direct Offering November 2021 Private Placement November 2025 Private Placement November 2025 Registered Direct Offering Offering Warrants Offering Warrants Investors Warrants Placement Warrants Offering Warrants Placement Warrants Investors Warrants Pre-funded Warrant Total BALANCE as of March 31, 2024 $ 3,219 $ 4,333 $ 80,636 $ 6,048 $ 179,520 $ 15,077 $ — $ — $ 288,833 Change in fair value of derivative liabilities ( 3,198 ) ( 4,114 ) ( 67,813 ) ( 5,086 ) ( 114,934 ) ( 9,097 ) — — ( 204,242 ) BALANCE as of March 31, 2025 21 219 12,823 962 64,586 5,980 — — 84,591 Derivative liabilities recognized at grant date 4,724,165 1,013,590 5,737,755 Change in fair value of derivative liabilities ( 21 ) ( 219 ) ( 12,823 ) ( 962 ) ( 60,487 ) ( 5,980 ) ( 231,066 ) 108,599 ( 202,959 ) Exercise — — — — ( 4,099 ) — — — ( 4,099 ) BALANCE as of March 31, 2026 $ — $ — $ — $ — $ — $ — $ 4,493,099 $ 1,122,189 $ 5,615,288 The warrants presented in the table above are not traded in an active securities market; therefore, the Company estimates the fair value to those warrants using the Black-Scholes valuation model as of March 31, 2026 and 2025. As of March 31, 2026 May 13, 2021 November 10, 2021 November 14, 2025 November 17, 2025 Placement Placement Investor Agent Investor Agent Investor Pre-funded Granted Date Warrants Warrants Warrants Warrants Warrants Warrants # of shares exercisable* 55,319 4,149 1,341,362 5,515 4,510,000 905,000 Valuation date 3/31/2026 3/31/2026 3/31/2026 3/31/2026 3/31/2026 3/31/2026 Exercise price* $ 105.00 $ 105.00 $ 1.03 $ 68.00 $ 1.26 $ 0.0001 Stock price* $ 1.24 $ 1.24 $ 1.24 $ 1.24 $ 1.24 $ 1.24 Expected term (years) 0.12 0.12 0.61 0.61 5.12 ** Risk-free interest rate 3.73 % 3.73 % 3.71 % 3.71 % 3.93 % 4.86 % Expected volatility 106 % 106 % 125 % 125 % 109 % 118 % F- 12 As of March 31, 2025 August 4, 2020 February 10, 2021 May 13, 2021 November 10, 2021 Placement Placement Placement Underwriters’ Agent ROFR Investor Agent Investor Agent Granted Date Warrants Warrants Warrants Warrants Warrants Warrants Warrants # of shares exercisable* 3,181 3,804 1,522 55,319 4,149 2,778,315 5,515 Valuation date 3/31/2025 3/31/2025 3/31/2025 3/31/2025 3/31/2025 3/31/2025 3/31/2025 Exercise price* $ 62.50 $ 138.00 $ 172.50 $ 105.00 $ 105.00 $ 2.16 $ 68.00 Stock price* $ 8.90 $ 8.90 $ 8.90 $ 8.90 $ 8.90 $ 8.90 $ 8.90 Expected term (years) 0.35 0.87 0.87 1.12 1.12 1.61 1.61 Risk-free interest rate 1.39 % 3.49 % 3.49 % 4.01 % 4.01 % 4.21 % 4.21 % Expected volatility 112 % 112 % 112 % 112 % 112 % 112 % 112 % * Giving retroactive effect to the 1-for-10 reverse stock split effected on July 29, 2025, except for the November 2025 Warrants ** No fixed termination date is specified in the agreement of November 2025 Pre-funded Warrants, which can be exercised at any time on or after the initial exercise date and until it is exercised in full, yet the Company adopted a 20 -year assumption for valuation purposes. As of March 31, 2026 and 2025, financial instruments of the Company comprised primarily current assets and current liabilities including cash, accounts receivable, finance lease receivables, prepayments, other receivables and other assets, due from a related party, accounts payable, advances from customers, operating lease liabilities, accrued expenses and other liabilities, and due to related parties which approximate their fair values because of the short-term nature of these instruments. The non-current portion of finance lease receivables were recorded at the gross amount adjusted for the interest using the effective interest rate method. The Company believes that the effective interest rates underlying these instruments approximate their fair values because the Company used its incremental borrowing rate to recognize the present value of these instruments as of March 31, 2026 and 2025. (f) Equity method investments The Company accounts for investments in private company by using equity method as the Company determined that it does not have control over Jinkailong under either voting or VIE models. As of March 31, 2026 and 2025, the Company owned 35 % equity investment in Jinkailong whereby the Company has the ability to influence the operating and financial decisions of Jinkailong. The Company records equity method investments initially at cost and subsequently records its share of the earnings or losses of the investee in the periods for which they are reported by the investee in its financial statements rather than in the period in which an investee declares a dividend. The Company adjusts the carrying amount of an investment for its share of the earnings or losses of the investee after the date of investment and reports the recognized earnings or losses in income. If an investment balance is reduced to zero as a result of cumulative losses, the Company will need to pause the recognition of losses until its share of earnings exceeds the accumulated losses resulting in the investment balance returning to zero . As of March 31, 2026 and 2025, the carrying value of the investment is $ 0 for both periods presented. F- 13 (g) Non-controlling interests For the Company’s non-wholly owned subsidiaries, a non-controlling interest is recognized to reflect portion of equity that is not attributable, directly or indirectly, to the Company. The cumulative results of operations attributable to non-controlling interests are also recorded as non-controlling interests in the Company’s consolidated balance sheets and consolidated statements of operations and comprehensive loss. Cash flows related to transactions with non-controlling interests are presented under financing activities in the consolidated statements of cash flows. (h) Segment reporting In November 2023, the FASB issued ASU 2023-07, which is an update to Topic 280, Segment Reporting: Improvements to reportable Segment Disclosures (“ASU 2023-07”), which enhances the disclosure required for reportable segments in annual and interim consolidated financial statements, including additional, more detailed information about a reportable segment’s expenses. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company adopted ASU 2023-07 for the year ended March 31, 2025, retrospectively to all periods presented in the consolidated financial statement. The adoption of this ASU had no material impact on reportable segments identified and had no effect on the Company’s consolidated financial position, results of operations, or cash flows. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (the “CODM”), the Company’s CODM has been identified as its CEO , who reviews the consolidated results when making decisions about allocating resources and assessing performance of the Company. The Company evaluated how the CODM manages the businesses of the Company to maximize efficiency in allocating resources and assessing performance. The Company has one operating and reportable segment of automobile transaction and related services as set forth in Note 1, after discontinued the online ride-hailing platform services on August 20, 2024. (i) Cash Cash primarily consists of unrestricted bank demand deposits available for immediate withdrawal. (j) Accounts receivable Accounts receivable are recorded at the invoiced amount less an allowance for credit losses, do not bear interest, and are subject to contractual payment term within one month. Starting from April 1, 2023, the Company adopted ASU No.2016-13 “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASC Topic 326”). The Company’s estimation of allowance for credit losses considers factors such as historical credit loss experience, age of receivable balances, current market conditions, reasonable and supportable forecasts of future economic conditions, as well as an assessment of receivables due from specific identifiable counterparties to determine whether these receivables are considered at risk or uncollectible. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company’s management continues to evaluate the reasonableness of the valuation allowance policy and update it if necessary. For the years ended March 31, 2026 and 2025, no provision for credit losses related to accounts receivable was provided. F- 14 (k) Finance lease receivables Finance lease receivables, which result from sales-type leases, are measured at discounted present value of (i) future minimum lease payments, (ii) any residual value not subject to a bargain purchase option as finance lease receivables on its balance sheet and (iii) accrued interest on the balance of the finance lease receivables based on the interest rate inherent in the applicable lease over the term of the lease. Management also periodically evaluates individual customer’s financial condition, credit history and the current economic conditions to make adjustments in the allowance for credit losses when necessary. Finance lease receivables are charged off against the allowance for credit losses after all means of collection have been exhausted and the potential for recovery is considered remote. As of March 31, 2026 and 2025, the Company determined no allowance for credit losses was necessary for finance lease receivables. As of March 31, 2026 and 2025, finance lease receivables consisted of the following: March 31, March 31, 2026 2025 Minimum lease payments receivable $ 85,774 $ 293,872 Less: Unearned interest ( 36,268 ) ( 104,340 ) Finance lease receivables $ 49,506 $ 189,532 Finance lease receivables, current $ 44,454 $ 166,339 Finance lease receivables, non-current $ 5,052 $ 23,193 Future scheduled minimum lease payments for investments in sales-type leases as of March 31, 2026 are as follows: Minimum future payments receivable Twelve months ending March 31, 2027 $ 78,381 Twelve months ending March 31, 2028 7,393 Total $ 85,774 (l) Property and equipment, net Property and equipment primarily consist of office equipment, fixtures and furniture and automobiles, which are stated at cost less accumulated depreciation and any provision required for impairment in value. Depreciation is computed using the straight-line method with no residual value based on the estimated useful life. The useful life of property and equipment is summarized as follows: Categories Useful life Office equipment, fixture and furniture 3 – 5 years Automobiles 3 – 5 years The Company evaluates property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. An asset or asset group is considered impaired if the asset’s or asset group’s carrying amount exceeds the future net undiscounted cash flows that the asset or asset group is expected to generate. If such asset or asset group is considered to be impaired, the impairment recognized is the amount by which the carrying amount of the asset or asset group, if any, exceeds its fair value determined using a discounted cash flow model. For the years ended March 31, 2026 and 2025, the Company did not recognize any impairment for property and equipment. Costs of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The cost and related accumulated depreciation and amortization of assets disposed of or retired are removed from the accounts, and any resulting gain or loss is reflected in the consolidated statements of operations and comprehensive loss. F- 15 (m) Intangible assets, net Purchased intangible assets are recognized and measured at fair value upon acquisition. Separately identifiable intangible assets that have determinable lives continue to be amortized over their estimated useful lives using the straight-line method as follows: Categories Useful life Software 5 – 10 years Separately identifiable intangible assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of any impairment loss for identifiable intangible assets is based on the amount by which the carrying amount of the assets exceeds the fair value of the assets. For the years ended March 31, 2026 and 2025, there was no impairment of intangible assets. (n) Loss per share Basic loss per share is computed by dividing net loss attributable to stockholders by the weighted average number of outstanding shares of common stock. Liability-classified pre-funded warrants are excluded from the denominator in the computation of basic loss per ordinary share, as such instruments are not considered to be outstanding ordinary shares. For the calculation of diluted loss per share, net loss attributable to stockholders for basic loss per share is adjusted by the effect of dilutive securities, including share-based awards, under the treasury stock method and convertible securities under the if-converted method. Potentially dilutive securities have been excluded from the computation of diluted loss per share if their inclusion is anti-dilutive. (o) Mezzanine Equity (redeemable) The Company evaluates its convertible preferred stock in accordance with ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20), and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, to determine if its convertible preferred stock should be treated as a liability or an equity. As a result, the Company determined that the convertible preferred stock should be treated as an equity as it did not meet the definition of liability instrument. In accordance with ASC 480-10-S99, the convertible preferred stock should be classified as a mezzanine equity, since it contained a change of control redemption right feature which is not solely within the control of the Company. The Company believes the future event of change of control is not probable as of March 31, 2026; therefore, the convertible preferred stock has not been re-measured to its redemption value. As of March 31, 2026, there was no change to the initial carrying amount of the convertible preferred stock. (p) Derivative liabilities The Company accounts for derivative liabilities in accordance with ASC 815 Derivatives and Hedging and ASC 820 Fair Value Measurement. The derivative liabilities are carried at fair value on the Company’s consolidated balance sheets, with any changes in fair value recognized in the Company’s consolidated statements of operations and comprehensive loss. The Company estimates the fair value of derivative liabilities using the Black-Scholes valuation model at initial recognition and each subsequent valuation date. (q) Revenue recognition The Company recognized its revenue under Accounting Standards Codification (“ASC”) 842 Leases (“ASC 842”) and Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (ASC 606). ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. It also requires the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. F- 16 To achieve that core principle, the Company applies the five steps defined under ASC 606: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company accounts for a contract with a customer when the contract is entered into by the parties, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration to collect is substantially probable. Leases - Lessor The Company recognized revenue as lessor in accordance with ASC 842. The two primary accounting provisions the Company uses to classify transactions as sales-type or operating leases are: (i) a review of the lease term to determine if it is for the major part of the economic life of the underlying equipment (defined as greater than 75 )%; and (ii) a review of the present value of the lease payments to determine if they are equal to or greater than substantially all of the fair market value of the equipment at the inception of the lease (defined as greater than 90 %). Automobiles included in arrangements meeting these conditions are accounted for as sales-type leases. Interest income from the lease is recognized in financing revenues over the lease term. Automobile included in arrangements that do not meet these conditions are accounted for as operating leases and revenue is recognized over the term of the lease. The Company excludes from the measurement of its lease revenues any tax assessed by a governmental authority that is both imposed on and concurrent with a specific revenue-producing transaction and collected from a customer. The Company considers the economic life of most of the automobiles to be three to five years, since this represents the most common long-term lease term for its automobiles and the automobiles will be used for online ride-hailing services. The Company believes three to five years is representative of the period during which an automobile is expected to be economically usable, with normal service, for the purpose for which it is intended. The Company’s lease pricing interest rates, which are used in determining customer payments in a finance lease arrangement, are developed based upon the local prevailing rates in the marketplace where its customer will be able to obtain an automobile loan under similar terms from the bank. The Company reassesses its pricing interest rates quarterly based on changes in the local prevailing rates in the marketplace. As of March 31, 2026, the Company’s pricing interest rate was 6.0 % per annum. Contract liabilities The Company’s contract liabilities consist of advances from customers, which are the upfront rent received from customers. The revenue recognized by continuing operations for the years ended March 31, 2026 and 2025 which was previously included in the advances from customers balances as of March 31, 2025 and March 31, 2024 was $ 100,596 and $ 118,828 , respectively. The Company’s advances from customers amounted to $ 86,768 and $ 103,897 as of March 31, 2026 and 2025, respectively. Disaggregated information of revenues recorded by continuing operations by business lines are as follows: For the Years Ended March 31, 2026 2025 Automobile Transaction and Related Services - Operating lease revenues from automobile rentals $ 1,348,542 $ 1,685,112 - Financing revenues 68,011 93,473 - Service fees from NEVs leasing 64,833 — - Default revenue 26,025 33,050 - Monthly services commissions 17,485 25,799 - Service fees from automobile purchase services 10,046 38,696 - Other service fees 11,185 20,041 Total Revenues $ 1,546,127 $ 1,896,171 F- 17 Automobile transaction and related services Operating lease revenues from automobile rentals –The Company generates revenue from leasing its own automobiles. The Company recognizes revenue wherein an automobile is transferred to the lessees and the lessees has the ability to control the asset. Rental transactions are satisfied over the rental period and is recognized over time. As the operating lease revenue is fixed in nature under the Company’s various product solutions, the Company recognizes the revenue from operating lease on a straight-line basis over the lease term, based on periodic settlement between the Company and the online ride-hailing drivers. Rental periods are short term in nature, generally twelve months or less. Financing revenues – Interest income from the lease arising from the Company’s sales-type leases and bundled lease arrangements are recognized as financing revenues over the lease term based on the effective rate of interest in the lease. Service fees from NEVs leasing - Services fees from NEVs leasing are paid by some lessees who rent new energy electric vehicles from the Company. The amount of services fees is based on the product solutions chosen by lessees. The service content includes: (1) training services covering online ride-hailing regulations, operational skills, safety and other related aspects; (2) assistance to apply for the Network-Appointed Taxi Transport Certificate; (3) introducing online ride-hailing business and order-taking skills; (4) providing online ride-hailing operation and management services, etc. Default revenue - The Company charged the lessees default fees upon occurrence of default events such as early-termination of the contracts or other violation behaviors to the contracts. The default punishment is calculated and confirmed by the customers. Monthly services commissions – Commissions from the services are generated from the management and related services provided to Partner Platforms and other companies, which are settled on a monthly basis. The Company recognizes revenues at a point in time when performance obligations are completed and the commission amount is confirmed by the Partner Platforms and other companies, based on their evaluations on the services provided by the Company. Service fees from automobile purchase services - Automobile purchase services are paid by automobile purchasers for a series of the services provided to them throughout the purchase process such as credit assessment, installment of GPS devices, ride-hailing driver qualification and other administrative procedures. The service fee is based on the sales price of the automobiles and relevant services provided. The Company recognizes those revenues at a point in time when above mentioned services are completed, and the related automobile is delivered to the lessee or purchaser. The Company recognizes the revenue of service fees from NEVs leasing when the Company has fulfilled its performance obligation to provide NEVs leasing service such as consulting service and training service upon delivery of automobile. Accounts receivable related to automobile purchase services is collected upon the automobiles are delivered to lessees or purchaser. The Company recognizes default revenue at a point in time when performance obligations are completed and the default punishment is calculated and confirmed by the customers, which represent the collectability is probable from the customers. Other revenues – The Company generated other revenues such as miscellaneous service fees charged to its customers for some supporting services provided to online ride-hailing drivers. The Company recognizes revenues at a point in time when performance obligations are completed and the collectability is probable from the customers. F- 18 (r) Income taxes Deferred income tax liabilities and assets are recognized for the expected future tax consequences of temporary differences between the income tax basis and financial reporting basis of assets and liabilities. Provisions or benefits for income taxes consists of tax estimated from taxable income plus or minus deferred tax expenses (benefits) if applicable. Deferred tax is calculated using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax basis. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable income will be utilized with prior net operating loss carried forwards using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be utilized. Current income taxes are provided for in accordance with the laws of the relevant tax authorities. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. The Company did not have any significant unrecognized uncertain tax positions or any unrecognized liabilities, interest or penalties associated with unrecognized tax benefit as of March 31, 2026 and 2025. According to PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or withholding agent. The statute of limitations will be extended to five years under special circumstances, which are not clearly defined (but an underpayment of tax liability exceeding RMB 0.1 million is specifically listed as a special circumstance). In the case of a related party transaction, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion. The Company presents deferred tax assets and liabilities as non-current in the balance sheet based on an analysis of each taxpaying component within a jurisdiction. Meanwhile, the Internal Revenue Service (“IRS”) in the U.S. can include returns filed within the last three years in an audit unless a substantial error is found in which case, IRS may extend the period to six years. The Company is not currently under examination by any income tax authority, nor has it been notified of an impending examination. (s) Comprehensive loss Comprehensive loss includes net loss and foreign currency adjustments. Comprehensive loss is reported in the consolidated statements of operations and comprehensive loss. Accumulated other comprehensive loss, as presented on the consolidated balance sheets are the cumulative foreign currency translation adjustments. (t) Leases – lessee The Company accounts for leases in accordance with ASC 842. The Company enters into certain agreements as a lessee to lease automobiles and to conduct its automobiles rental operations. If any of the following criteria are met, the Company classifies the lease as a direct financing or sales-type lease (as a lessee): ● The lease transfers ownership of the underlying asset to the lessee by the end of the lease term; ● The lease grants the lessee an option to purchase the underlying asset that the Company is reasonably certain to exercise; F- 19 ● The lease term is for 75 % or more of the remaining economic life of the underlying asset, unless the commencement date falls within the last 25 % of the economic life of the underlying asset; ● The present value of the sum of the lease payments equals or exceeds 90 % of the fair value of the underlying asset; or ● The underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. Leases that do not meet any of the above criteria are accounted for as operating leases. Finance and operating lease ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Since the implicit rate for the Company’s leases is not readily determinable, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a similar economic environment and over a similar term. The Company considers extension, renewal and termination options at lease inception when calculating the present value of lease payments. However, the Company has determined there is no reasonable certainty that any of these options will be exercised, so such optional periods are generally excluded from the lease terms used for present value of lease payments. The Company has elected the short-term lease exception, therefore operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Its leases generally do not provide a residual guarantee. The finance or operating lease ROU asset also excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term for operating lease. Meanwhile, the Company recognizes the finance leases ROU assets and interest on an amortized cost basis. The amortization of finance ROU assets is recognized on a straight-line basis as amortization expense, while the lease liability is increased to reflect interest on the liability and decreased to reflect the lease payments made during the period. Interest expense on the lease liability is determined each period during the lease term as the amount that results in a constant periodic interest rate applied to the remaining balance of the liability. The Company reviews the impairment of its ROU assets consistent with the approach applied for its other long-lived assets. The Company reviews the recovery ability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of an asset or asset group may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the asset or asset group from the expected undiscounted future pre-tax cash flows of the related operations. The Company has elected to include the carrying amount of finance and operating lease liabilities in any tested asset group and include the associated lease payments in the undiscounted future pre-tax cash flows. For the years ended March 31, 2026 and 2025, the Company did not recognize impairment loss on its ROU assets. (u) Share-Based Awards The Company accounts for share-based awards issued in exchange for employee and non-employee services under ASC 718, Stock Compensation. Share-based awards issued to non-employees for goods or services are measured at the grant-date fair value of the equity instruments issued. For share-based awards that are not subject to vesting, forfeiture, or future service requirements, the full fair value of the awards is recognized as compensation expense on the issuance date. (v) Discontinued operations A discontinued operation may include a component of an entity or a group of components of an entity, or a business or nonprofit activity. A disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operation if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when any of the following occurs: (1) the component of an entity or group of components of an entity meets the criteria to be classified as held for sale; (2) the component of an entity or group of components of an entity is disposed of by sale; (3) the component of an entity or group of components of an entity is disposed of other than by sale (for example, by abandonment or in a distribution to owners in a spinoff). F- 20 (x) Significant risks and uncertainties 1) Credit risk a. Assets that potentially subject the Company to significant concentration of credit risk primarily consist of cash. The maximum exposure of these assets to credit risk is their carrying amounts as of the balance sheet dates. As of March 31, 2026 and 2025, approximately $ 325,000 and $ 1,000 , respectively, were deposited with banks in the United States which is insured by the U.S. government up to $ 250,000 . Approximately $ 2,238,000 and $ 0 was deposited with banks in Hong Kong as of March 31, 2026 and 2025, respectively, which is insured by the Hong Kong government up to $ 102,000 (HKD 800,000 ). As of March 31, 2026 and 2025, approximately $ 999,000 and $ 700,000 , respectively, were deposited in financial institutions located in mainland China, which were insured by the government authority. Under the Deposit Insurance System in China, an enterprise’s deposits at one bank are insured for a maximum of approximately $ 72,000 (RMB 500,000 ). To limit exposure to credit risk relating to deposits, the Company primarily places cash deposits with large financial institutions in China which management believes are of high credit quality. The Company’s operations are carried out entirely in mainland China. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the social, political, economic and legal environments in the PRC as well as by the general state of the PRC economy. In addition, the Company’s business may be influenced by changes in PRC government laws, rules and policies with respect to, among other matters, anti-inflationary measures, currency conversion and remittance of currency outside of China, rates and methods of taxation and other factors. b. In measuring the credit risk of accounts receivable due from the automobile purchasers (the “customers”), the Company mainly reflects the “probability of default” by the customer on its contractual obligations and considers the current financial position of the customer and the risk exposures to the customer and its likely future development. Historically, most of the automobile purchasers would pay the Company their previously defaulted amounts within one to three months. As a result, the Company would provide full provisions on accounts receivable if the customers default on repayments for over three months. As of March 31, 2026 and 2025, the Company record no allowance for credit losses against accounts receivable, respectively. 2) Foreign currency risk As of March 31, 2026 and 2025 substantially all of the Company’s operating activities and major assets and liabilities, except for the cash deposit of approximately $ 2,563,000 and $ 1,000 , respectively, in U.S. dollars, are denominated in RMB, which are not freely convertible into foreign currencies. All foreign exchange transactions take place through either the People’s Bank of China (the “PBOC”) or other authorized financial institutions at exchange rates quoted by PBOC. Approval of foreign currency payments by the PBOC or other regulatory institutions requires a payment application together with invoices and signed contracts. The value of RMB is subject to change in central government policies and international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. When there is a significant change in value of RMB, the gains and losses resulting from translation of financial statements of a foreign subsidiary will be significantly affected. RMB appreciated from 7.26 RMB into US$ 1.00 on March 31, 2025 to 6.90 RMB into US$ 1.00 on March 31, 2026. (y) Recently adopted accounting pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topics 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. For public business entities (PBEs), the ASU is effective for annual periods beginning after December 15, 2024. For all other entities (i.e. non-PBEs), the ASU is effective for annual periods beginning after December 15, 2025. Early adoption is permitted. As a PBE, the Company adopted ASU 2023-09 for its annual period beginning April 1, 2024, on a retrospective basis. (z) Recent accounting pronouncements not yet adopted In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), and in January 2025, the FASB issued ASU No. 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Both early adoption and retrospective application are permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements and related disclosures. F- 21 In July 2025, the FASB issued Accounting Standards Update (“ASU”) 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets. ASU 2025-05 amends ASC 326, Financial Instruments—Credit Losses, and introduces a practical expedient available for all entities and an accounting policy election available for all entities, other than public business entities, that elect the practical expedient. These changes apply to the estimation of expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue from contracts with customers. Under the practical expedient, entities may assume that current conditions as of the balance sheet date remain unchanged for the remaining life of the asset when developing reasonable and supportable forecasts. This simplifies the estimation process for short-term financial assets. ASU 2025-05 is effective for the Company’s annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. ASU 2025-05 should be applied on a prospective basis. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements and related disclosures. In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The ASU clarifies interim disclosure requirements and the applicability of Topic 270. The objective of the amendments is to provide further clarity about the current interim disclosure requirements. The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Adoption of this ASU can be applied either a prospective or a retrospective approach. Early adoption is permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements and related disclosures. In December 2025, the FASB issued ASU No. 2025-12, Codification Improvements. The ASU addresses thirty-three items, representing the changes to the Codification that (1) clarify, (2) correct errors, or (3) make minor improvements. Generally, the amendments in this Update are not intended to result in significant changes for most entities. The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2026. The adoption method of this ASU may vary, on an issue-by-issue basis. Early adoption is permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements and related disclosures. Except for the above-mentioned pronouncements, there are no new recent issued accounting standards that will have material impact on the consolidated statements and related disclosures. 4. DISCONTINUED OPERATIONS Discontinued operations - Online ride-hailing platform service Since August 2024, the Company has discontinued its online ride-hailing platform service business. The following table sets forth the reconciliation of the amounts of major classes of income and losses from discontinued operations of online ride-hailing platform service in the consolidated statements of operations and comprehensive loss for the years ended March 31, 2026 and 2025, respectively. For the Years Ended March 31, 2026 2025 Revenues $ — $ 344,241 Cost of revenues — ( 247,025 ) Gross profit — 97,216 Operating expenses — Selling, general and administrative expenses — ( 166,937 ) Provision for credit losses — ( 173,278 ) Total operating expenses — ( 340,215 ) Loss from operations — ( 242,999 ) Other income, net — 33,214 Interest expense — ( 8,372 ) Loss before income taxes — ( 218,157 ) Gain on disposal of discontinued operations — 397,775 Income tax benefit — 4,510 Net income from discontinued operations $ — $ 184,128 F- 22 Reconciliation of the amount of cash flows from discontinued operations in the consolidated statements of cash flows for the years ended March 31, 2026 and 2025 are as follows: For the Years Ended March 31, 2026 2025 Net cash used in operating activities from discontinued operations $ — $ ( 73,441 ) Net cash provided by investing activities from discontinued operations $ — $ 49 Net cash used in financing activities from discontinued operations $ — $ ( 82,074 ) Discontinued operations - Automobile Transaction related Services in Sichuan Prior to December 31,2025, the Company used to operate automobile transaction related services in Sichuan Province, China through Disposed Entities. In December 2025, the Company entered into the Sichuan Acquisition Agreement with HMST. Pursuant to the Sichuan Acquisition Agreement, the Company sold 100 % of the equity interests in each of Yicheng and Senmiao Consulting to HMST for nil consideration, while the Company undertook certain liabilities of $ 518,388 which were previously assumed by the Disposed Entities. On December 31, 2025, the Disposition was completed and the Company disposed its 100 % equity interest in Disposed Entities. After the disposition, the Company discontinued its operations in Sichuan Province in China. This decision was driven by recurring losses in Sichuan regional business area, which prompted the Company to strategically exit from its operations in Sichuan Province. In connection with this Disposition, the long-term accumulation of local resources, industry reputation and market reputation of Disposed Entities can promote HMST quickly enter the local market, connect channels and partners, and reduce market development costs; at the same time, HMST can rationally utilize its mature entities and basic assets to reduce new establishment and operating costs. In accordance with ASC 205-20-45, the discontinuation of automobile transaction related services in Sichuan was accounted for as a discontinued operation, as it represented a strategic shift with a significant impact on the Company’s overall operations and financial results. Reconciliation of the carrying amounts of major classes of assets and liabilities from discontinued operations of Disposed Entities in consolidated balance sheet as of March 31, 2025 are as follows: March 31, 2025 ASSETS Current assets Cash and cash equivalents $ 132,275 Accounts receivable 12,164 Accounts receivable, a related party 7,924 Prepayments, other receivables, and other current assets, net 233,497 Prepayment - a related party 22,662 Due from related parties, net, current 90,951 Total current assets 499,473 Other Assets Property and equipment, net 2,934 Finance lease right-of-use assets, net 117,867 Due from a related party, net, non-current 964,075 Total other assets 1,084,876 Total assets $ 1,584,349 LIABILITIES Current liabilities Accounts payable $ 38,761 Advances from customers 20,726 Income tax payable 19,918 Accrued expenses and other liabilities 2,504,673 Due to related parties 179,017 Finance lease liabilities, current 360,268 Total current liabilities 3,123,363 Total liabilities $ 3,123,363 F- 23 The following table sets forth the reconciliation of the amounts of major classes of income and losses from discontinued operations of Disposed Entities in the consolidated statements of operations and comprehensive loss for the years ended March 31, 2026 and 2025. For the Years Ended March 31, 2026 2025 Revenues $ 1,346,873 $ 1,492,901 Cost of revenues ( 919,715 ) ( 1,214,822 ) Gross profit 427,158 278,079 Operating expenses Selling, general and administrative expenses ( 928,071 ) ( 759,969 ) Provision for credit losses ( 253,942 ) ( 1,396,034 ) Total operating expenses ( 1,182,013 ) ( 2,156,003 ) Loss from operations ( 754,855 ) ( 1,877,924 ) Other income (expenses), net 226,101 ( 65,030 ) Interest expense on finance leases ( 615 ) ( 15,145 ) Loss before income taxes ( 529,369 ) ( 1,958,099 ) Gain on disposal of discontinued operations* 426,766 — Income tax expenses — — Net loss from discontinued operations $ ( 102,603 ) $ ( 1,958,099 ) * As of December 31, 2025, net deficit from discontinued operations of Disposed Entities was $ 1,419,775 . Together with the realized accumulated other comprehensive loss upon disposal of Disposed Entities and the loss of $518,388 through undertaking of certain liabilities, the Company recorded a total gain of $ 426,766 on disposal of Disposed Entities. Reconciliation of the amount of cash flows from discontinued operations in the consolidated statements of cash flows for the years ended March 31, 2026 and 2025 are as follows: For the Years Ended March 31, 2026 2025 Net cash (used in) provided by operating activities from discontinued operations $ ( 465,097 ) $ 247,871 Net cash used in investing activities from discontinued operations $ — $ ( 481,173 ) Net cash provided by (used in) financing activities from discontinued operations $ 80,100 $ ( 29,706 ) F- 24 5. ACCOUNTS RECEIVABLE Accounts receivable mainly includes monthly service commission receivables due from Partner Platforms and other companies of operating lease, and service fee receivables due from automobile purchasers. As of March 31, 2026 and 2025, accounts receivable was comprised of the following: March 31, March 31, 2026 2025 Receivables of operating lease $ — $ 7,681 Receivables of automobile sales due from automobile purchasers — 1,282 Total Accounts receivable $ — $ 8,963 Movement of allowance for credit losses for the years ended March 31, 2026 and 2025 are as follows: March 31, March 31, 2026 2025 Beginning balance $ — $ 1,545 Write off — ( 1,538 ) Translation adjustment — ( 7 ) Ending balance $ — $ — There were no recoveries of accounts receivable that had been written off in prior periods during the year ended March 31, 2026. 6. PREPAYMENTS, OTHER RECEIVABLES AND OTHER CURRENT ASSETS As of March 31, 2026 and 2025, the prepayments, other receivables and other current assets were comprised of the following: March 31, March 31, 2026 2025 Prepaid expenses (i) $ 387,314 $ 256,291 Purchase contract termination refund (ii) — 440,972 Deposits (iii) 76,925 79,801 Employee advances — 413 Others 6,762 4,110 Total prepayments, other receivables and other current assets $ 471,001 $ 781,587 Movement of allowance for credit losses for the years ended March 31, 2026 and 2025 are as follows: March 31, March 31, 2026 2025 Beginning balance $ — $ 2,633 Write off — ( 2,634 ) Translation adjustment — 1 Ending balance $ — $ — There were no recoveries of other receivables that had been written off in prior periods during the year ended March 31, 2026. F- 25 (i) Prepaid expenses The balance of prepaid expense represented automobile purchase prepayments, automobile liability insurance premium for automobiles for operating lease and other miscellaneous expense such as office lease, office remodel expense, etc. that will expire within one year. (ii) Purchase contract termination refund In September 2022, the Company entered into an automobile purchase agreement with a third party to purchase a total of 100 automobiles while a termination agreement with the seller had been signed in March 2025. Pursuant to which, the prepayment with the amount of approximately $ 0.44 million should be refunded to the Company in installments before March 31, 2026. The balance of purchase contract termination refund represented the part of the purchase prepayments originally made for the automobile purchase, which were fully refunded due to the termination of automobile purchase. (iii) Deposits The balance of deposits mainly represented the security deposit made by the Company to various automobile leasing companies and Didi Chuxing Technology Co., Ltd., who runs an online ride-hailing platform. As of March 31, 2026 and 2025, no allowance for credit losses was recorded, as recoverability is deemed probable based on counterparty creditworthiness and historical experience. 7. PROPERTY AND EQUIPMENT, NET Property and equipment as of March 31, 2026 and 2025 consist of the following: March 31, March 31, 2026 2025 Automobiles $ 4,436,421 $ 4,356,020 Office equipment, fixtures and furniture 43,718 41,558 Subtotal 4,480,139 4,397,578 Less: accumulated depreciation ( 3,667,205 ) ( 2,747,591 ) Total property and equipment, net $ 812,934 $ 1,649,987 Depreciation expense for the year ended March 31, 2026 and 2025 were amounted to $ 881,130 and $ 911,051 , respectively. 8. INTANGIBLE ASSETS, NET Intangible assets as of March 31, 2026 and 2025 consisted of the following: March 31, March 31, 2026 2025 Software $ 751,713 $ 751,628 Less: accumulated amortization ( 451,713 ) ( 376,628 ) Total intangible assets, net $ 300,000 $ 375,000 Amortization expense for the years ended March 31, 2026 and 2025 were amounted to $ 75,000 and $ 75,000 , respectively. F- 26 The following table sets forth the Company’s future amortization expense for the next four years as of March 31, 2026: Amortization expenses Twelve months ending March 31, 2027 $ 75,000 Twelve months ending March 31, 2028 75,000 Twelve months ending March 31, 2029 75,000 Twelve months ending March 31, 2030 75,000 Total $ 300,000 9. ACCRUED EXPENSES AND OTHER LIABILITIES March 31, March 31, 2026 2025 Deposits (i) $ 551,905 $ 540,424 Assumed liabilities of Disposed Entities (ii) 363,169 — Accrued payroll and welfare 141,555 689,783 Accrued expenses (iii) 60,289 484,407 Other taxes payable 38,479 49,464 Payables for expenditures on automobile transaction and related services 11,067 6,857 Other payables — 137 Total accrued expenses and other liabilities $ 1,166,464 $ 1,771,072 (i) Deposits The balance of deposits represented the security deposit from operating and finance lease customers to cover lease payment and related automobile expense in case the customers’ accounts are in default. The balance is refundable at the end of the lease term, after deducting any missed lease payment and applicable fee. (ii) Assumed liabilities of Disposed Entities The assumed liabilities of the disposed subsidiaries represent the debts that the Company is required to assume pursuant to the Sichuan Acquisition Agreement in connection with the disposal of Disposed Entities (refer to note 4), which are repayable on demand or per contractual terms. (iii) Accrued expenses The balance of accrued expenses represented the unbilled or payable balances to the expenses related to the daily operations of automobiles and services fees to professional institutions. 10. EMPLOYEE BENEFIT PLAN The Company has made employee benefit plan in accordance with relevant PRC regulations, including retirement insurance, unemployment insurance, medical insurance, housing fund, work injury insurance and maternity insurance. The contributions made by the Company were $ 69,304 and $ 72,888 for the years ended March 31, 2026 and 2025, respectively, from operations of the Company. F- 27 11. EQUITY Warrants Warrants in Offerings Warrants issued in connection with the equity offering meet the definition of derivatives as contemplated in Derivatives and Hedging (“ASC 815”) and are accounted for as a derivative. These warrants are classified as liabilities under the caption “Derivative liabilities” in the consolidated statements of balance sheets and recorded at estimated fair value at each reporting date, computed using the Black-Scholes valuation model. Changes in the liability from period to period are recorded in the consolidated statements of operations and comprehensive loss under the caption “Change in fair value of derivative liabilities.” August 2020 Underwriters’ Warrants Giving retroactive effect to the twice 1-for-10 reverse stock splits on the Company’s common stock became effective on April 6, 2022 and July 29, 2025, respectively, as of March 31, 2025, there were 3,181 underwriters’ warrants outstanding with fair value of $ 21 , and the exercise price of those warrants was adjusted to $ 62.50 . During the year ended March 31, 2026, the change of fair value was a gain of $ 21 recognized in the consolidated statements of operations and comprehensive loss based on the decrease in fair value of the liabilities and the remaining 3,181 underwriters’ warrants has expired. During the year ended March 31, 2025, the change of fair value was a gain of $ 3,198 recognized in the consolidated statements of operations and comprehensive loss based on the decrease in fair value of the liabilities. February 2021 Registered Direct Offering Warrants Giving retroactive effect to the twice 1-for-10 reverse stock splits on the Company’s common stock became effective on April 6, 2022 and July 29, 2025, respectively, as of March 31, 2025, there were 5,326 February 2021 registered direct offering warrants outstanding with fair value of $ 219 , and the exercise prices of the Placement Agent Warrants and the ROFR Warrants of the February 2021 Registered Direct Offering were adjusted to $ 138.00 and $ 172.50 , respectively. During the years ended March 31, 2026, the change of fair value was a gain of $ 219 recognized in the consolidated statements of operations and comprehensive loss based on the decrease in fair value of the liabilities and the remaining 5,326 registered direct offering warrants has expired. During the year ended March 31, 2025, the change of fair value was a gain of $ 4,114 recognized in the consolidated statements of operations and comprehensive loss based on the decrease in fair value of the liabilities. May 2021 Registered Direct Offering Warrants Giving retroactive effect to the twice 1-for-10 reverse stock splits on the Company’s common stock became effective on April 6, 2022 and July 29, 2025, respectively, as of March 31, 2026 and 2025, there were 59,468 and 59,468 May 2021 registered direct offering warrants outstanding and the exercise price of those warrants was adjusted to $ 105.00 and $ 105.00 , respectively. During the years ended March 31, 2026 and 2025, the change of fair value was a gain of $ 13,785 and $ 72,899 recognized in the consolidated statements of operations and comprehensive loss based on the decrease in fair value of the liabilities, respectively. As of March 31, 2026 and 2025, the fair value of the derivative instrument totaled $ 0 and $ 13,785 , respectively. November 2021 Private Placement Warrants Giving (1) retroactive effect to the twice 1-for-10 reverse stock splits on the Company’s common stock became effective on April 6, 2022 and July 29, 2025, respectively; and (2) the anti-dilution adjustment resulted from the registered direct offering completed on November 20, 2025, as of March 31, 2026 and 2025, there were 1,341,362 and 2,778,315 , respectively, November 2021 Investors Warrants outstanding and the exercise price of those warrants was adjusted to $ 1.03 and $ 2.16 , respectively. On June 11, 2025, a holder of November 2021 private placement warrants exercised the warrants with exercise price of $ 1.13 per share to purchase 20,000 shares of the Company’s common stock. In September 2025, a holder of November 2021 private placement warrants exercised the warrants with exercise price of $ 2.16 per share to purchase 53,357 shares of the Company’s common stock and six holders of November 2021 private placement warrants exercised the warrants on a “cashless” basis to receive 1,345,820 shares of the Company’s common stock. All related derivative liabilities were derecognized upon exercise, with their total fair value of $ 4,099 reclassified from derivative liabilities to additional paid-in capital. F- 28 Giving retroactive effect to the twice 1-for-10 reverse stock splits on the Company’s common stock became effective on April 6, 2022 and July 29, 2025, respectively, as of March 31, 2026 and 2025, there were 5,515 and 5,515 November 2021 Placement Agent Warrants outstanding, respectively, and the exercise price of those warrants was adjusted to $ 68.00 . During the years ended March 31, 2026 and 2025, the change of fair value was a gain of $ 66,467 and $ 124,031 , recognized in the consolidated statements of operations and comprehensive loss based on the decrease in fair value of the liabilities, respectively. As of March 31, 2026 and 2025, the fair value of the derivative instrument totaled $ 0 and $ 70,566 , respectively. November 2025 registered direct offering of common stock and pre-funded warrants, and concurrent private placement of warrants 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 November 2025 Private Placement was closed 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 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. The Company concluded that both pre-funded warrants and November 2025 private placement warrants qualify as derivative liabilities. At the issuance date in November 2025, the fair value of these warrants was estimated at $ 5,737,755 in total 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. As of March 31, 2026, the fair value of the pre-funded warrants and November 2025 private placement warrants was $ 1,122,189 and $ 4,493,099 , respectively. During the year ended March 31, 2026, the change in fair value of the November 2025 private placement warrants was a gain of $ 231,066 recognized in the consolidated statements of operations and comprehensive loss while there was a loss amounted to $ 108,599 recognized in the consolidated statements of operations and comprehensive loss caused by the change in fair value of the pre-funded warrants. As of the filing date of these consolidated financial statements, the pre-funded warrants had not been exercised, and all such pre-funded Warrants remain outstanding in accordance with their terms, and the November 2025 private placement warrants remain outstanding as issued. Restricted Stock Units On October 29, 2020, the Board approved the issuance of an aggregate of 1,273 restricted stock units (“RSUs”) to directors, officers and certain employees as stock compensation for their services for the years ended March 31, 2022, giving retroactive effect to the twice 1-for-10 reverse stock splits on the Company’s common stock became effective on April 6, 2022 and July 29, 2025, respectively. Total RSUs granted to these directors, officers and employees were valued at an aggregate fair value of $ 140,000 . These RSUs vested in four equal quarterly installments on January 29, 2021, April 29, 2021, July 29, 2021 and October 29, 2021 or in full upon the occurrence of a change in control of the Company, provided that the director, officer or the employee remains in service through the applicable vesting date. The RSUs will be settled by the Company’s issuance of shares of common stock in certificated or uncertificated form upon the earlier of (i) vesting date, (ii) a change in control and (iii) termination of the services of the director, officer or employee due to a “separation of service” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended, or the death or disability of such director, officer or employee. As of the filing date of these consolidated financial statements, all RSUs with an aggregate of 1,273 were vested and 955 were settled by the Company. The Company expects to settle the remaining vested RSUs by issuance of shares of common stock before December 31, 2026 and the vested RSUs have been accounted in an expense and additional paid-in capital. F- 29 Equity Incentive Plan At the 2018 Annual Meeting of Stockholders of the Company held on November 8, 2018, the Company’s stockholders approved the Company’s 2018 Equity Incentive Plan for employees, officers, directors and consultants of the Company and its affiliates. In March 2023 and April 2024, the Annual Meeting of Stockholders of Company for the years ended March 31, 2022 and 2023 further approved the amendments to the 2018 Equity Incentive Plan, to increase the number of shares of common stock reserved under the Plan to 150,000 shares and 180,000 shares, respectively, giving retroactive effect to the twice 1-for-10 reverse stock splits on the Company’s common stock became effective on April 6, 2022 and July 29, 2025, respectively. A committee consisting of at least two independent directors would be appointed by the Board or in the absence of such a committee, the board of directors, will be responsible for the general administration of the Equity Incentive Plan. All awards granted under the Equity Incentive Plan will be governed by separate award agreements between the Company and the participants. As of March 31, 2026, the Company has granted an aggregate of 3,038 RSUs, among which, 2,645 RSUs were issued under the Equity Incentive Plan, 318 RSUs were vested but have not been issued while 75 RSUs were forfeited due to two directors ceased to serve on the board of the Company since November 8, 2018. During the years ended March 31, 2026 and 2025, no new RSUs were granted. Conversion Price Adjustment for November 2021 Preferred Shares Pursuant to the Certificate of Designation for the series A convertible preferred stock signed by the Company and certain institutional investors in November 2021 Private Placement, the initial conversion price of the series A Convertible Preferred Shares was $ 0.68 . If as of the applicable date the conversion price then in effect is greater than the greater of (1) $ 0.41 (the “Floor Price”) (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events) and (2) 85 % of the closing bid price on the applicable date (the “Adjustment Price”), the conversion price shall automatically lower to the Adjustment Price accordingly. As the 1-for-10 reverse stock split on the Company’s Common Stock became effective on April 6, 2022, the conversion price and the Floor Price of the Preferred Shares mentioned above were proportionally adjusted. Further, on August 9, 2022, the Company and the investors agreed to reduce the conversion price of the series A Convertible Preferred Shares from $ 4.10 to $ 2.00 and to increase the number of the shares of common stock that are available to be issued upon conversion of the Preferred Shares from 1,092,683 to 2,240,000 . As the 1-for-10 reverse stock split on the Company’s Common Stock became effective on July 29, 2025, the conversion price of the Preferred Shares was adjusted to $ 20.00 . As of March 31, 2026 and 2025, there were 262 and 991 shares of Series A convertible preferred stock outstanding, respectively, valued at $ 42,943 and $ 234,364 recorded as mezzanine equity, respectively. During April and June 2025, an aggregate of 729 shares of Series A convertible preferred stock were converted into 36,471 shares of the Company’s common stock. The conversion resulted in addition of $ 4 to common stock and $ 191,417 to additional paid-in capital. Giving retroactive effect to the twice 1-for-10 reverse stock splits on the Company’s common stock became effective on April 6, 2022 and July 29, 2025, respectively, as of March 31, 2026, 4,738 shares of Series A convertible preferred stock were converted into 223,583 shares of the Company’s common stock. 1-for- 10 shares reverse split on common stock The Company considered the above transactions after giving a retroactive effect to a 1-for-10 reverse stock split of its common stock which became effective on July 29, 2025. The Company believed it is appropriate to reflect the above transactions on a retroactive basis similar to those after a stock split or dividend pursuant to ASC 260. All shares and per share amounts and in the consolidated financial statements have been retroactively stated to reflect the effect of the reverse stock split. Upon execution of the 1-for-10 reverse stock split, the Company recognized additional 37 shares of common stock due to round up issue. November 2025 PIPE Offering of common stock On November 13, 2025, the Company entered into a securities purchase agreement (the “PIPE SPA”) with certain non-U.S. investors (the “PIPE Purchasers”), pursuant to which the Company agreed to sell, and the PIPE Purchasers agreed to purchase, severally and not jointly, an aggregate of 500,000 shares of common stock of the Company, par value $ 0.0001 per share at an offering price of $ 1.32 per share (the “PIPE Offering”). The gross proceeds of the PIPE Offering are $ 659,992 , after deduction of customary expenses. The PIPE Offering was closed on November 14, 2025. F- 30 November 2025 Common stock issued for consulting services In November 2025, the Company entered into a consulting services agreement (the “Consulting Agreement”) with a consultant (the “Consultant”), pursuant to which the Company engaged the Consultant to provide certain consulting services. As compensation for such services, the Company agreed to issue the Consultant an aggregate of 200,000 shares of its common stock, par value $ 0.0001 . These shares were valued at $ 250,000 , based on the closing price of the Company’s common stock on the issuance date. Pursuant to the agreement, the shares issued to the Consultant are not subject to vesting or forfeiture. In addition, the Company has no recourse or substantial disincentives against the Consultant if services are terminated prior to the termination or expiration of the service period. As a result, the shares issued to the Consultant are required to be expensed on the issuance date in accordance with ASC 718. Accordingly, the Company recognized stock-based compensation expense of $ 250,000 during the year ended March 31, 2026. 12. INCOME TAXES The United States of America The Company is incorporated in the State of Nevada in the U.S., and is subject to U.S. federal corporate income taxes with tax rate of 21 %. The State of Nevada does not impose any state corporate income tax. Green Energy Capital Asset Inc. (“Green Energy”) is incorporated in the State of Wyoming in the U.S., and is subject to U.S. federal corporate income taxes with tax rate of 21 %. The State of Wyoming does not impose any state corporate income tax. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act imposes a one-time transition tax on deemed repatriation of historical earnings of foreign subsidiaries, and future foreign earnings are subject to U.S. taxation. The Tax Act also established the Global Intangible Low-Taxed Income (GILTI), a new inclusion rule affecting non-routine income earned by foreign subsidiaries. For the years ended March 31, 2026 and 2025, the Company’s foreign subsidiary in China was operating at loss and as such, did not record a liability for GILTI tax. On July 4, 2025, the One Big Beautiful Act (“OBBBA”) was signed into law. The OBBBA made several key provisions of the Tax Cuts and Jobs Act of 2017 permanent, including 100 % bonus depreciation, the immediate expensing of domestic research costs, and the introduction of a favorable modification to the business interest expense limitation. Together, these changes accelerate the timing of certain tax deductions in the current period that allow for reductions in cash taxes. However, there is no tax impact for the Company because none of the accelerated deductions under the OBBBA’s scope-such as qualified bonus depreciation or domestic research expense apply to the Company’s operations or asset in the current period. Consequently, the OBBBA has no effect on the Company’s current or deferred tax position. The Company’s net loss for U.S. income taxes from U.S amounted to approximately $ 4.7 million and $ 2.2 million for the years ended March 31, 2026 and 2025, respectively. As of March 31, 2026 and 2025, the Company’s net operating loss carryforward for U.S. income taxes was approximately $ 10.0 million and $ 7.9 million, respectively. The net operating loss carryforward will not expire and is available to reduce future years’ taxable income but limited to 80 % of income until utilized. Management believes that the utilization of the benefit from this loss appears uncertain due to the Company’s operating history. Accordingly, the Company has recorded a 100 % valuation allowance on the deferred tax asset to reduce the deferred tax assets to zero on the consolidated balance sheets. As of March 31, 2026 and 2025, valuation allowances for deferred tax assets for US income taxes were approximately $ 2.7 million and $ 1.7 million, respectively. Management reviews the valuation allowance periodically and makes changes accordingly. PRC Hunan Ruixi is subject to PRC Enterprise Income Tax (“EIT”) on the taxable income in accordance with the relevant PRC income tax laws. The EIT rate for companies operating in the PRC is 25 %. Hong Kong Senmiao Technology (Hong Kong)., Limited (“Senmiao HK”) is subject to Hong Kong Profits Tax (“Profits Tax”) on the assessable profits in accordance with the relevant Hong Kong tax legislation. The applicable tax rate 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. Income/(loss) before income tax by jurisdiction as follows: For the Years Ended March 31, 2026 2025 U.S. $ ( 4,738,176 ) $ ( 2,165,429 ) PRC ( 536,050 ) 258,588 Hong Kong 5,325 — Total net loss before income tax $ ( 5,268,901 ) $ ( 1,906,841 ) F- 31 For the years ended March 31, 2026 and 2025, the Company had no current tax expense or deferred tax expense. Upon adoption of ASU 2023-09, Improvements to Income Tax Disclosures, as described in Note 3 (y), Recently adopted accounting pronouncements, the reconciliation of taxes at the PRC statutory rate to our provision for (benefit from) income taxes for the years ended March 31, 2026 and 2025 was as follows: For the Years Ended March 31, 2026 2025 Loss before income tax $ ( 5,268,901 ) 100.0 % $ ( 1,906,841 ) 100.0 % PRC statutory income tax rate 25.0 % 25.0 % Computed income tax benefit with PRC statutory income tax rate ( 1,317,225 ) 25.0 % ( 476,710 ) 25.0 % Domestic tax effects Changes in valuation allowance 98,220 ( 1.9 )% 43,530 ( 2.3 )% True-up on NOL — — % 72,424 ( 3.8 )% Non-deductible expenses 4,863 ( 0.1 )% 2,113 ( 0.1 )% Non-deductible expense on contract default — — % 49,194 ( 2.6 )% Other adjustments 30,930 ( 0.6 )% — — % Foreign tax effects U.S. Different tax rate in other jurisdictions 189,527 ( 3.6 )% 86,617 ( 4.5 )% Changes in valuation allowance 991,689 ( 18.8 )% 78,894 ( 4.1 )% True-up on NOL — — % 101,291 ( 5.3 )% Non-deductible overseas salary — — % 25,200 ( 1.3 )% Other adjustments 3,328 ( 0.1 )% 17,447 ( 1.0 )% Other foreign jurisdictions ( 1,332 ) 0.1 % — — % Effective tax rate $ — — % $ — — % Upon adoption of ASU 2023-09, Improvements to Income Tax Disclosures, as described in Note 3 (y), Recently adopted accounting pronouncements, cash paid for income taxes, during the years ended March 31, 2026 and 2025 were as follows: For the Years Ended March 31, 2026 2025 U.S. $ — $ — PRC — — Hong Kong — — Total $ — $ — The significant components of deferred taxes for continuing operations were as follows: March 31, March 31, 2026 2025 Deferred Tax Assets Net operating loss carried forward $ 2,324,852 $ 1,907,516 Allowance for credit losses 609,018 503,502 Excess of warrant fair value over offering proceeds 608,255 — Lease liability 14,506 2,591 Total deferred tax assets 3,556,631 2,413,609 Less: valuation allowance ( 3,503,857 ) ( 2,413,609 ) Total deferred tax assets, net of valuation allowance 52,774 — Net off against deferred tax liabilities ( 52,774 ) — Net deferred tax assets $ — $ — F- 32 March 31, March 31, 2026 2025 Deferred tax liabilities Right of use asset $ ( 10,153 ) $ — Change in fair value of derivative liabilities ( 42,621 ) — Total deferred tax liabilities ( 52,774 ) — Net off against deferred tax assets 52,774 — Net deferred tax liabilities $ — $ — The changes related to valuation allowance from continuing operations are as follows: March 31, March 31, 2026 2025 Balance at beginning of the year $ 2,413,609 $ 2,291,185 Additions 1,090,248 122,424 Balance at end of the year $ 3,503,857 $ 2,413,609 As of March 31, 2026 and 2025, the Company’s PRC entity from continuing operations had net operating loss carryforwards of approximately $ 0.9 million and $ 1.0 million, respectively, which will be available to offset future taxable income. As of March 31, 2026, these carryforwards will expire in calendar year 2026 through 2031, if not used. As of March 31, 2026 and 2025, valuation allowances for deferred tax assets for PRC income taxes were approximately $ 0.8 million and $ 0.7 million, respectively. With the consideration of the duration of statutory carry forward periods and forecasts of future profitability, it has concluded that it is more likely than not that all its deferred tax assets generated from the Company would not be utilized in the future. The Company has provided full allowance of its deferred tax assets. Uncertain tax positions The Group evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of March 31, 2026 and 2025, the Group did not have any unrecognized uncertain tax positions. For the years ended March 31, 2026 and 2025, the Company did not incur any interest and penalties related to potential underpaid income tax expenses. According to PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or withholding agent. The statute of limitations will be extended to five years under special circumstances, which are not clearly defined (but an underpayment of tax liability exceeding RMB 0.1 million is specifically listed as a special circumstance). In the case of a related party transaction, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion. 13. CONCENTRATION Major customers No Major customer disclosures are required as the Company’s revenue and accounts receivable are not concentrated with any single or group of customers meeting the materiality threshold for concentration disclosure. Major Suppliers For the year ended March 31, 2026, one supplier accounted for approximately 30.9 % of the total costs of revenue from continuing operations of the Company. For the year ended March 31, 2025, two suppliers accounted for approximately 30.7 % and 10.2 % of the total costs of revenues from the continuing operations of the Company, respectively. As of March 31, 2026 and 2025, one supplier represented approximately 91.4 % and 94.2 % of the Company’s accounts payable from continuing operations, respectively. 14. RELATED PARTY TRANSACTIONS AND BALANCES The following is a list of related parties which the Company has transactions with for the years end March 2026 and 2025: (a) Mr. Xi Wen, the former CEO and director of the Company. (b) Ms. Jie Gao, a director of the Company. F- 33 (c) Mr. Trent Davis, a former director of the Company. (d) Ms. Sichun Wang, a former director of the Company. (e) Ms. Xiang Hu, a shareholder of the Company. (f) World Trade Technology Limited (“World Trade Technology”), a company where the Company’s Chief Financial Officer serves as Financial Controller. (g) Hunan Dingchentai Investment Co., Ltd. (“Dingchentai”), a company where one of the Company’s independent directors Ms. Xiaojuan Lin serves as the legal representative and general manager. 1. Related Party Balances 1) Due from related parties As of March 31, 2026 and 2025, balances due from related parties from the Company’s operations were comprised of the following: March 31, March 31, 2026 2025 Total due from related parties (i)(ii) $ 2,532,049 $ 2,474,207 Less: Allowance for credit losses(i) ( 2,517,552 ) ( 1,971,045 ) Due from related parties, net $ 14,497 $ 503,162 Due from a related party, net, current (ii)(iii) $ 14,497 $ 81,098 Due from a related party, net, non-current(i) $ — $ 422,064 (i) As of March 31, 2026 and 2025, balances due from Jinkailong, the Company’s equity investee company, was $ 0 and $ 422,064 , respectively, net of allowance for credit losses. The balances were a result of Jinkailong’s deconsolidation on March 31, 2022. Movement of allowance for credit losses due from Jinkailong for the years ended March 31, 2026 and 2025 are as follows: March 31, March 31, 2026 2025 Beginning balance $ 1,971,045 $ 1,284,203 Addition 422,064 697,165 Translation adjustment 124,443 ( 10,323 ) Ending balance $ 2,517,552 $ 1,971,045 (ii) On January 3, 2024, Xiang Hu, entered into a loan agreement wherein the Company agreed to provide an interest-free special reserve loan of $ 150,000 for a period of 12 months, which was extended for 12 months since January 3, 2025. As of March 31, 2026 and 2025, the balance was $ 0 and $ 81,098 , respectively. (iii) As of March 31, 2026, balance of $ 14,497 represented business cash advances to Jie Gao, which was repaid to the Company in June 2026. F- 34 2) Due to related parties March 31, March 31, 2026 2025 Loan payable to a related party (i) $ — $ 414 Other payable due to a related party (ii) 578,398 — Other payable due to a related party (iii) 168,696 — Total due to related parties $ 747,094 $ 414 (i) As of March 31, 2025, the balances of $ 414 represented borrowings from Xi Wen, which is unsecured, interest free and due on demand. (ii) As of March 31,2026, the balances of $ 578,398 comprises an interest-free loan of $ 500,000 from World Trade Technology, which is expected to be repaid on or before September 10, 2026, together with expenses of $ 78,398 settled on the Company’s behalf by World Trade Technology, which is unsecured, interest-free and repayable on demand. (iii) As of March 31,2026, the balance of $ 168,696 represented funds collected by the Company on behalf of Xiang Hu, which had been fully paid off in May 2026. 3) Operating lease right-of-use assets, a related party and Operating lease liabilities, a related party March 31, March 31, 2026 2025 Operating lease right-of-use assets, a related party $ 47,520 $ 6,910 Operating lease liabilities, a related party $ 58,023 $ 10,365 The Company entered into lease agreements with Dingchengtai and recorded operating lease right-of-use assets and lease liabilities accordingly. The current lease agreement will expire in May 2027. 2. Related Party Transactions For the Years Ended March 31, 2026 2025 Lease expenses to Dingchentai (1) $ 41,067 $ 41,691 Voluntary Waiver of Compensation by Xi Wen (2) $ 70,000 $ — Voluntary Waiver of Compensation by Trent Davis (2) $ 65,000 $ — Voluntary Waiver of Compensation by Sichun Wang (2) $ 35,000 $ — Advances to Jie Gao (3) $ ( 14,081 ) $ — Repayments from Xiang Hu (3) $ 75,000 $ 69,288 Payment by World Trade Technology on behalf of the Company (4) $ 78,398 $ — Funds collected by the Company on behalf of Xiang Hu (4) $ 168,696 $ — Borrowing from World Trade Technology (5) $ 500,000 $ — Borrowings from Xiang Hu (6) $ 140,807 $ — Repayments to Xiang Hu (6) $ ( 140,807 ) $ — Borrowings from Xi Wen (7) $ 137,500 $ — Repayments to Xi Wen (7) $ ( 128,558 ) $ ( 11,940 ) Loans to Xi Wen (7) $ ( 229,469 ) $ — Offset of loans due from Xi Wen against accrued salary payable to Xi Wen (7) $ 221,389 $ — (1) For the years ended March 31, 2026 and 2025, the Company incurred $ 41,067 and $ 41,691 in rental expenses, respectively, for lease agreements entered into with Dingchentai. (2) For the year ended March 31, 2026, the three former directors voluntarily waived all accrued but unpaid director compensation upon their resignation from the Company’s board of directors. F- 35 (3) The amount of $ 14,081 represented the advance to Jie Gao for operational purposes in February 2026, which was fully repaid in June 2026. For the years ended March 31, 2026 and 2025, Xiang Hu repaid $ 75,000 and $ 69,288 , respectively, against an interest-free special reserve loan of $ 150,000 granted to him on January 3, 2024 for operational purposes. (4) In February and March 2026, World Trade Technology paid a total of $ 78,398 in operating expenses on behalf of the Company, which is unsecured, interest-free and repayable on demand. In November 2025, the Company collected $ 168,696 on behalf of Xiang Hu and remitted the full amount to his designated account in May 2026. (5) In February 2026, the Company obtained an unsecured and interest-free loan of $ 500,000 from World Trade Technology which shall be due and repayable on September 10, 2026. (6) In December 2025, the Company obtained a loan amounted to $ 140,807 (RMB 1,000,000 ) from Xiang Hu, which was unsecured, interest free and repayable on demand. The loan was fully repaid in March 2026 . (7) During the year ended March 31, 2026, the Company obtained total of $137,500 borrowings from Xi Wen, repaid $128,558 to him, and loaned total of $229,469 to Xi Wen. All of these loans between the Company and Xi Wen were unsecured, interest free and repayable on demand. The loan balances due from Xi wen amounted to $221,389 were offset against the accrued salary payable to Xi Wen as of December 31, 2025. For the year ended March 31, 2025, the Company repaid borrowings of $11,940 to Xi Wen, which was borrowed before March 31, 2024. The loan was unsecured, interest free and due on demand. 15. LEASES Lessor The Company’s operating leases for automobile rentals have rental periods that are typically short term, generally is twelve months or less. In the revenue recognition section of Note 3 (q), the Company discloses that revenue earned from automobile rentals, wherein an identified asset is transferred to the customer and the customer has the ability to control that asset, is accounted for under Topic 842 upon adoption for the years ended March 31, 2026 and 2025. Lessee As of March 31, 2026 and 2025, the Company has engaged in offices and showroom leases which were classified as operating leases. Payments under the Company’s lease arrangement are fixed. F- 36 The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company recognized lease expense on a straight-line basis over the lease term for operating lease. Interest expense on the lease liability is determined each period during the lease term as the amount that results in a constant periodic interest rate applied to the remaining balance of the liability. As of March 31, 2026, the weighted-average remaining operating lease term of its existing leases is approximately 1.17 years. Operating lease expense for office and showroom leases totaled $ 41,067 and $ 73,736 for the years ended March 31, 2026 and 2025 respectively, of which $ 38,508 and $ 53,272 were amortization of leased asset for operating leases for the years ended March 31, 2026 and 2025, respectively. The following table sets forth the Company’s minimum lease payments in future periods: Operating lease payments* Twelve months ending March 31, 2027 $ 59,521 Total lease payments 59,521 Less: imputed interest ( 1,498 ) Present value of lease liabilities $ 58,023 * As of March 31, 2026, the outstanding balance of operating lease payments due to a related party was $ 58,023 , which included $ 17,506 of rent for the period from January to May 2026 that should be paid by March 31, 2026 in accordance with the lease contract. As of March 31, 2025, the outstanding balance of operating lease payments due to a related party was $ 10,365 . 16. LOSS PER SHERE – BASIC AND DILUTED Basic loss per share is computed by dividing net loss for the period by the weighted average number of ordinary shares outstanding during the period. Diluted loss per ordinary share is calculated by adjusting the weighted average number of ordinary shares outstanding, assuming conversion of all potentially dilutive ordinary shares. As the Company incurred a loss for the years ended March 31, 2026 and 2025, all potentially dilutive ordinary shares for these years would have an anti-dilutive effect, if converted, and thus have been excluded from the computation of basic and diluted loss per ordinary share. For the Years Ended March 31, 2026 2025 Numerator: Net loss attributable to the Company’s stockholders $ ( 5,270,200 ) $ ( 3,725,305 ) Denominator: Weighted average number of common stock - basic and diluted 2,675,178 1,052,122 The following table presents ordinary share equivalents that were excluded from the calculation of diluted loss per ordinary share for all years presented, as the effect of their inclusion would have been anti-dilutive: For the Years Ended March 31, 2026 2025 Anti-dilutive ordinary share equivalents Warrants 6,821,345 2,851,805 Series A convertible preferred stock 13,100 49,571 Total anti-dilutive ordinary share equivalents 6,834,445 2,901,376 F- 37 17. COMMITMENTS AND CONTINGENCIES Purchase commitments As of March 31, 2026, the Company did not have any significant capital and other commitments. Contingent liability of Jinkailong Pursuant to the Regulations of the State Council on Implementing the Management System for Registered Capital Registration in the Company Law of the People’s Republic of China issued on July 1, 2024 (the “Registered Capital Registration Implementing Rules”), as Jinkailong was registered and established before June 30, 2024, its shareholders should fully pay their unpaid subscribed capital before June 30, 2032. As of March 31, 2026, Hunan Ruixi holds 35 % of equity interest of Jinkailong and has not made any payments towards the investment amounted to RMB 3.5 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. 18. SEGMENT INFORMATION The Company presents segment information after elimination of inter-company transactions. In general, revenue, cost of revenue and operating expenses are directly attributable, or are allocated, to each segment. The Company’s long-lived assets are all located in the PRC and all of the Company’s revenues are derived from the PRC. Therefore, no geographical segments are presented. The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker (CODM) for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company does not allocate assets to its segments as the CODM does not evaluate the performance of segments using asset information. By assessing the qualitative and quantitative criteria established by Accounting Standards Codification (“ASC”) 280, “Segment Reporting”, the Company considers itself to be operating in only one reportable segment of automobile transaction and related services after discontinued the online ride-hailing platform services on August 20, 2024. The Company’s CODM relies upon the consolidated results of operations as a whole when making decisions about allocating resources and assessing the performance of the Company. The Company has concluded that consolidated net (loss) income is the measure of segment profitability. Within the information provided, the CODM specifically reviews depreciation and amortization, which are a significant segment expense, as this represents significant cost affecting the Company’s decision on how to allocate resources. Other operating expenses are reviewed in aggregate. The following table presents the significant revenue, loss from operations, loss before income taxes and net loss in the Company’s operating segments from continuing operations and discontinued operations for the years ended March 31, 2026 and 2025: For the Years Ended March 31, 2026 2025 Automobile Automobile Transaction and Transaction and Online ride-hailing Related Related platform Services Services Services from continuing operations* from continuing operations* from discontinued operations Revenues $ 1,546,127 $ 1,896,171 $ 344,241 Depreciation and amortization $ 994,638 $ 1,039,323 $ 37,984 Loss from operations $ ( 2,888,197 ) $ ( 1,989,592 ) $ ( 242,999 ) Loss before income taxes $ ( 5,268,901 ) $ ( 1,906,841 ) $ ( 218,157 ) Net (loss) income $ ( 5,268,901 ) $ ( 1,906,841 ) $ 184,128 Capital expenditure $ — $ 415 $ — * Amounts of continuing operating segment can agree to the consolidated statements of operations and comprehensive loss for the years ended March 31, 2026 and 2025. F- 38 19. PARENT-ONLY FINANCIALS The Company’s PRC subsidiary is restricted in its ability to transfer a portion of its net assets to the Company. Payment of dividends by the entity organized in the PRC is subject to limitations, procedures and formalities. Regulations in the PRC currently permit payments of dividends only out of accumulated profits as determined in accordance with accounting standards and regulations in the PRC. The Company’s PRC subsidiary is also required to set aside at least 10 % of its after-tax profit based on PRC accounting standards each year to its statutory reserves account until the accumulative amount of such reserves reaches 50 % of its respective registered capital. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends. As of March 31, 2026, The Company’s PRC subsidiary has incurred accumulated losses, and the Company has concluded that the subsidiary is unable to remit any portion of its net assets to the Company In addition, the Company’s operations and revenues are conducted and generated in the PRC, all of the Company’s revenue being earned and currency received is denominated in RMB. RMB is subject to the foreign exchange control regulation in China, and, as a result, the Company may be unable to distribute any dividends outside of China due to PRC foreign exchange control regulations that restrict the Company’s ability to convert RMB into USD. Regulation S-X requires that the condensed financial information of registrant shall be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. For purposes of the above test, restricted net assets of consolidated subsidiaries shall mean that amount of the registrant’s proportionate share of net assets of consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred to the parent company by subsidiaries in the form of loans, advances or cash dividends without the consent of a third party. The Company has a consolidated shareholders’ deficit, its net asset base for purposes of calculating the proportionate share of restricted net assets of consolidated subsidiaries should be zero. And the Company’s PRC subsidiary has restricted net assets, therefore, any restrictions placed on the net assets of subsidiaries with positive equity would result in the 25 percent threshold being exceeded and a corresponding requirement to provide parent company-only financial information. Certain information and footnote disclosures normally included in financial statements prepared in conformity with generally accepted accounting principles have been condensed or omitted. The Company’s investment in subsidiary is stated at cost plus equity in undistributed loss of subsidiaries. F- 39 SENMIAO TECHNOLOGY LIMITED CONDENSED BALANCE SHEETS March 31, March 31, 2026 2025 ASSETS Current Assets Cash $ 1,800 $ 999 Due from subsidiaries 2,148,569 10,435,066 Due from a related party — 75,000 Prepayments, other receivables and other current assets, net 199,143 — Total Current Assets 2,349,512 10,511,065 Other Assets Intangible assets 300,000 375,000 Total Assets $ 2,649,512 $ 10,886,065 LIABILITIES, MEZZANINE EQUITY AND DEFICIT Current Liabilities Accrued expenses and other liabilities $ 480,578 $ 1,080,265 Due to a related party 78,398 — Due to a subsidiary 113,521 — Derivative liabilities 5,615,288 84,591 Total Current Liabilities 6,287,785 1,164,856 Other Liabilities Excess of investments in subsidiaries 2,152,189 12,342,408 Total Liabilities 8,439,974 13,507,264 Commitments and Contingencies Mezzanine Equity Series A convertible preferred stock (par value $ 1,000 per share, 5,000 shares authorized; 262 and 991 shares issued and outstanding at March 31, 2026 and 2025, respectively) 42,943 234,364 Stockholders’ deficit Common stock (par value $ 0.0001 per share, 50,000,000 shares authorized; 4,557,489 and 1,051,804 shares issued and outstanding at March 31, 2026 and 2025, respectively) * 456 105 Additional paid-in capital 45,397,481 43,951,069 Accumulated deficit ( 50,379,773 ) ( 45,109,573 ) Accumulated other comprehensive loss ( 851,569 ) ( 1,697,164 ) Total Senmiao Technology Limited Stockholders’ deficit ( 5,833,405 ) ( 2,855,563 ) Total Liabilities, Mezzanine Equity and deficit $ 2,649,512 10,886,065 * Giving retroactive effect to the 1-for-10 reverse stock split effected on July 29, 2025 F- 40 SENMIAO TECHNOLOGY LIMITED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS For the Years Ended March 31, 2026 2025 General and administrative expenses $ ( 1,753,320 ) $ ( 978,022 ) Other income, net 200,006 — Change in fair value of derivative liabilities 202,959 204,242 Excess of warrant fair value over offering proceeds ( 2,896,455 ) — Equity of losses in subsidiaries ( 1,023,390 ) ( 2,951,525 ) Net loss $ ( 5,270,200 ) $ ( 3,725,305 ) For the Years Ended March 31, 2026 2025 Cash Flows from Operating Activities: Net loss $ ( 5,270,200 ) $ ( 3,725,305 ) Adjustments to reconcile net loss to net cash used in operating activities: Equity of loss of subsidiaries 1,023,390 2,951,525 Amortization of intangible asset 75,000 75,000 Stock compensation expense 250,000 — Gain from debt forgiveness ( 42,581 ) — Gain from voluntary waiver of compensation by related parties ( 170,000 ) — Excess of warrant fair value over offering proceeds 2,896,455 — Offering costs allocable to derivative liabilities 12,575 — Change in fair value of derivative liabilities ( 202,959 ) ( 204,242 ) Change in operating assets and liabilities Prepayments, receivables and other current assets ( 199,143 ) 37,124 Due from a related party 75,000 — Due to a related party 78,398 — Accrued expenses and other liabilities ( 684,105 ) 201,761 Net Cash Used in Operating Activities ( 2,158,170 ) ( 664,137 ) Cash Flows from Investing Activities: Loan to a related party ( 229,469 ) — Loan to subsidiaries ( 1,579,028 ) — Net Cash Used in Investing Activities ( 1,808,497 ) — Cash Flows from Financing Activities: Net proceeds from exercise of November 2021 Private Placement Warrants 341,251 — Net proceeds from issuance of common stock in PIPE Offering 659,992 — Net proceeds from registered direct offering of common stock and pre-funded warrants and concurrent private placement of warrants 2,828,725 — Repayment from subsidiaries — 569,239 Borrowings from related parties 137,500 74,773 Net Cash Provided by Financing Activities 3,967,468 644,012 Net increase (decrease) in cash 801 ( 20,125 ) Cash, beginning of year 999 21,124 Cash, end of year $ 1,800 $ 999 F- 41 20. SUBSEQUENT EVENTS On April 23, 2026, the Company entered into a certain securities purchase agreement with certain purchasers, pursuant to which the Company 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 was closed on June 25, 2026. All Units were sold, and the aggregate gross proceeds to the Company from the April 2026 Units Private Placement were approximately $ 11.0 million. The Company evaluated all events and transactions that occurred after March 31, 2026 up through the date the Company issued these consolidated financial statements. Other than the event disclosed above, there was no other subsequent event occurred that would require recognition or disclosure in the Company’s consolidated financial statements. F- 42 Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.