AIHS 10-Q/A
Senmiao Technology Ltd (VAI)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
For the quarterly period ended
For the transition period from to
Commission file number:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
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| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class: | Trading Symbol | Name of each exchange on which registered: | ||
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Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check One):
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller reporting company | |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b 2 of the Exchange Act). Yes ☐ No
As of February 6, 2026, there were
EXPLANATORY NOTE
TABLE OF CONTENTS
i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q/A (the “Report”), including, without limitation, statements under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “will,” “potential,” “projects,” “predicts,” “continues,” or “should,” or, in each case, their negative or other variations or comparable terminology. There can be no assurance that actual results will not materially differ from expectations. Such statements include, but are not limited to, any statements relating to our ability to consummate any acquisition or other business combination and any other statements that are not statements of current or historical facts. These statements are based on management’s current expectations, but actual results may differ materially due to various factors, including, but not limited to:
| ● | our goals and strategies, including our ability to maintain our automobile transaction and related services business in China; |
| ● | our management’s ability to properly develop and achieve any future business growth and any improvements in our financial condition and results of operations; |
| ● | the regulations and the impact by public health epidemics in China on the industries we operate in and our business, results of operations and financial condition; |
| ● | the growth or lack of growth in China of disposable household income and the availability and cost of credit available to finance car purchases; |
| ● | the growth or lack of growth of China’s online ride-hailing, automobile financing and leasing industries; |
| ● | changes in online ride-hailing, transportation networks, and other fundamental changes in transportation pattern in China; |
| ● | our expectations regarding demand for and market acceptance of our products and services; |
| ● | our expectations regarding our customer base; |
| ● | our ability to maintain positive relationships with our business partners; |
| ● | competition in the online ride-hailing, automobile financing and leasing industries in China; |
| ● | macro-economic and political conditions affecting the global economy generally and the market in China specifically; and |
| ● | relevant Chinese government policies and regulations relating to the industries in which we operate. |
You should read this Report and the documents that we refer to in this Report with the understanding that our actual future results may be materially different from and worse than what we expect. Other sections of this Report and our other reports filed with the Securities and Exchange Commission (the “SEC”) include additional factors which could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emerge from time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements.
You should not rely upon forward-looking statements as predictions of future events. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
This Report also contains statistical data and estimates that we obtained from industry publications and reports generated by third-parties. Although we have not independently verified the data, we believe that the publications and reports are reliable. The market data contained in this Report involves a number of assumptions, estimates and limitations. The ride-hailing and automobile financing markets in China may not grow at the rates projected by market data, or at all. The failure of these markets to grow at the projected rates may have a material adverse effect on our business and the market price of our common stock. If any one or more of the assumptions underlying the market data turns out to be incorrect, actual results may differ from the projections based on these assumptions. In addition, projections, assumptions and estimates of our future performance and the future performance of the industries in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described herein or our other reports filed with the SEC. You should not place undue reliance on these forward-looking statements.
ii
PART I – FINANCIAL INFORMATION
Item 1. Unaudited Condensed Consolidated Financial Statements
SENMIAO TECHNOLOGY LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in U.S. dollar, except for the number of shares)
| December 31, | March 31, | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| (As Restated) | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable | ||||||||
| Finance lease receivables, current | ||||||||
| Prepayments, other receivables and other current assets | ||||||||
| Due from a related party, net, current | ||||||||
| Current assets - discontinued operations | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Other assets | ||||||||
| Operating lease right-of-use assets, net, a related party | ||||||||
| Intangible assets, net | ||||||||
| Finance lease receivables, non-current | ||||||||
| Due from a related party, net, non-current | ||||||||
| Other assets - discontinued operations | ||||||||
| Total other assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES, MEZZANINE EQUITY AND EQUITY/DEFICIT | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Advances from customers | ||||||||
| Accrued expenses and other liabilities | ||||||||
| Due to a related party | ||||||||
| Operating lease liabilities, current - a related party | ||||||||
| Derivative liabilities | ||||||||
| Current liabilities - discontinued operations | ||||||||
| Total current liabilities | ||||||||
| Other liabilities | ||||||||
| Operating lease liabilities, non-current - a related party | ||||||||
| Total other liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (note 16) | ||||||||
| Mezzanine Equity | ||||||||
| Series A convertible preferred stock (par value $ | ||||||||
| Stockholders’ deficit | ||||||||
| Common stock (par value $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total Senmiao Technology Limited stockholders’ deficit | ( | ) | ( | ) | ||||
| Non-controlling interests | ||||||||
| Total (deficit) equity | ( | ) | ||||||
| Total liabilities, mezzanine equity and equity/deficit | $ | $ | ||||||
| * |
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements
1
SENMIAO TECHNOLOGY LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Expressed in U.S. dollar, except for the number of shares)
| For the Three Months Ended December 31, | For the Nine Months Ended December 31, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| (As Restated) | (As Restated) | |||||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gross profit | ||||||||||||||||
| Operating expenses | ||||||||||||||||
| Selling, general and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Provision for credit losses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Stock-based compensation | ( | ) | ( | ) | ||||||||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other (expense) income | ||||||||||||||||
| Other income, net | ||||||||||||||||
| Change in fair value of derivative liabilities | ||||||||||||||||
| Excess of warrant fair value over offering proceeds | ( | ) | ( | ) | ||||||||||||
| Total other (expense) income, net | ( | ) | ( | ) | ||||||||||||
| Loss before income tax expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax expense | ||||||||||||||||
| Net Loss from continuing operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Discontinued operations: | ||||||||||||||||
| Loss before income taxes from operations of discontinued operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gain on disposal of discontinued operations | ||||||||||||||||
| Income tax benefits | ||||||||||||||||
| Net loss from discontinued operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net (income) loss attributable to non-controlling interests | ( | ) | ( | ) | ||||||||||||
| Net loss attributable to the Company’s stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss | $ | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
| Other comprehensive loss | ||||||||||||||||
| Foreign currency translation adjustment | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Comprehensive loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| less: Total comprehensive income (loss) attributable to non-controlling interests | ( | ) | ( | ) | ||||||||||||
| Total comprehensive loss attributable to stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average number of common stock* | ||||||||||||||||
| Basic and diluted | ||||||||||||||||
| Loss per share - basic and diluted* | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss per share - basic and diluted | ||||||||||||||||
| Continuing operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Discontinued operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| * |
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements
2
SENMIAO TECHNOLOGY LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Nine Months Ended December 31, 2025 and 2024
(Expressed in U.S. dollar, except for the number of shares)
| For the Nine Months Ended December 31, 2024 | ||||||||||||||||||||||||||||
| Accumulated | ||||||||||||||||||||||||||||
| Additional | other | Non- | ||||||||||||||||||||||||||
| Common stock | paid-in | Accumulated | comprehensive | controlling | Total | |||||||||||||||||||||||
| Shares* | Par value | capital | deficit | loss | interest | equity | ||||||||||||||||||||||
| BALANCE, March 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Foreign currency translation adjustment | — | ( | ) | ( | ) | |||||||||||||||||||||||
| BALANCE, June 30, 2024 (Unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
| Net (loss) income | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Foreign currency translation adjustment | — | |||||||||||||||||||||||||||
| BALANCE, September 30, 2024 (Unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Foreign currency translation adjustment | — | ( | ) | ( | ) | |||||||||||||||||||||||
| BALANCE, December 31, 2024 (Unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
| For the Nine Months Ended December 31, 2025 | ||||||||||||||||||||||||||||
| Accumulated | ||||||||||||||||||||||||||||
| Additional | other | Non- | Total | |||||||||||||||||||||||||
| Common stock | paid-in | Accumulated | comprehensive | controlling | Equity | |||||||||||||||||||||||
| Shares* | Par value | capital | deficit | loss | interest | (Deficit) | ||||||||||||||||||||||
| (As Restated) | (As Restated) | (As Restated) | ||||||||||||||||||||||||||
| BALANCE, March 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Exercise of November 2021 Private Placement Warrants | ||||||||||||||||||||||||||||
| Fair value of derivative liabilities upon exercise of warrants | — | |||||||||||||||||||||||||||
| Conversion of preferred stock into common stock | ||||||||||||||||||||||||||||
| Additional shares of common stock round up adjustment due to retroactive effect of 1-for-10 reverse stock split | ||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| BALANCE, June 30, 2025 (Unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Exercise of November 2021 Private Placement Warrants | ||||||||||||||||||||||||||||
| Cashless exercise of November 2021 Investor warrants into common stock | ( | ) | ||||||||||||||||||||||||||
| Fair value of derivative liabilities upon exercise of warrants | — | |||||||||||||||||||||||||||
| Foreign currency translation adjustments | — | |||||||||||||||||||||||||||
| BALANCE, September 30, 2025 (Unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Issuance of common stock in PIPE Offering, net of issuance costs | ||||||||||||||||||||||||||||
| Issuance of common stock for consulting services | ||||||||||||||||||||||||||||
| Issuance of common stock and pre-funded warrants in registered direct offering and concurrent private placement warrants | ( | ) | ||||||||||||||||||||||||||
| Foreign currency translation adjustments | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Deconsolidation of discontinued operations | — | |||||||||||||||||||||||||||
| BALANCE, December 31, 2025 (Unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||
| * |
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements
3
SENMIAO TECHNOLOGY LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in U.S. dollar, except for the number of shares)
| For the Nine Months Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| (As Restated) | ||||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Net loss from discontinued operations | ( | ) | ( | ) | ||||
| Net loss from continuing operations | ( | ) | ( | ) | ||||
| Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||||
| Depreciation of property and equipment | ||||||||
| Stock compensation expense | ||||||||
| Amortization of right-of-use assets | ||||||||
| Amortization of intangible assets | ||||||||
| Provision for credit losses | ||||||||
| Gain on disposal of equipment | ( | ) | ( | ) | ||||
| Gain from debt forgiveness | ( | ) | ||||||
| Loss from lease modification | ||||||||
| Excess of warrant fair value over offering proceeds | ||||||||
| Offering costs allocable to derivative liabilities | ||||||||
| Change in fair value of derivative liabilities | ( | ) | ( | ) | ||||
| Change in operating assets and liabilities | ||||||||
| Accounts receivable | ||||||||
| Finance lease receivables | ||||||||
| Prepayments, other receivables and other assets | ||||||||
| Due from a related party | ||||||||
| Accounts payable | ( | ) | ||||||
| Advances from customers | ( | ) | ( | ) | ||||
| Accrued expenses and other liabilities | ( | ) | ||||||
| Operating lease liabilities | ( | ) | ||||||
| Operating lease liabilities – a related party | ( | ) | ( | ) | ||||
| Net Cash (Used in) Provided by Operating Activities from Continuing Operations | ( | ) | ||||||
| Net Cash (Used in) Provided by Operating Activities from Discontinued Operations | ( | ) | ||||||
| Net Cash (Used in) Provided by Operating Activities | ( | ) | ||||||
| Cash Flows from Investing Activities: | ||||||||
| Purchases of property and equipment | ( | ) | ||||||
| Cash received from disposal of property and equipment | ||||||||
| Loan to a related party | ( | ) | ||||||
| Net Cash Used in Investing Activities from Continuing Operations | ( | ) | ||||||
| Net Cash Provided by Investing Activities from Discontinued Operations | ( | ) | ||||||
| Net Cash Used in Investing Activities | ( | ) | ( | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Net proceeds from exercise of November 2021 Private Placement Warrants | ||||||||
| Net proceeds from issuance of common stock in PIPE Offering | ||||||||
| Net proceeds from issuance of common stock and pre-funded warrants in registered direct offering and concurrent private placement of warrants | ||||||||
| Borrowings from related parties | ||||||||
| Repayments to a related party | ( | ) | ||||||
| Net Cash Provided by Financing Activities from Continuing Operations | ||||||||
| Net Cash Provided by (Used in) Financing Activities from Discontinued Operations | ( | ) | ||||||
| Net Cash Provided by (Used in) Financing Activities | ( | ) | ||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | ||||||||
| Net increase in cash, cash equivalents and restricted cash | ||||||||
| Cash, cash equivalents and restricted cash, beginning of the period | ||||||||
| Cash, cash equivalents and restricted cash, end of the period | ||||||||
| Less: Cash, cash equivalents and restricted cash from discontinued operations | ( | ) | ( | ) | ||||
| Cash and cash equivalents from continuing operations, end of the period | ||||||||
| Supplemental Cash Flow Information | ||||||||
| Cash paid for interest expense | $ | $ | ||||||
| Cash paid for income tax | $ | $ | ||||||
| Non-cash Transaction in Investing and Financing Activities | ||||||||
| Termination of right-of use assets and lease liabilities | $ | $ | ||||||
| Recognition of right-of-use assets and lease liabilities, a related party | ||||||||
The following tables provides a reconciliation of cash, cash equivalent and restricted cash reported within the unaudited condensed consolidated balance sheets that sum to the total of the same amounts shown in the unaudited condensed consolidated statements of cash flows:
| For the Nine Months Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Cash and cash equivalent from continuing operations, end of the period | $ | $ | ||||||
| Cash, cash equivalent and restricted cash from discontinued operations, end of the period | $ | $ | ||||||
| For the Nine Months Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Cash and cash equivalent from continuing operations, beginning of the period | $ | $ | ||||||
| Cash and cash equivalent from discontinued operations, beginning of the period | $ | $ | ||||||
| Restricted cash from discontinued operations, beginning of the period | $ | $ | ||||||
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements
4
SENMIAO TECHNOLOGY LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(As Restated)
1. ORGANIZATION AND PRINCIPAL ACTIVITIES
Senmiao Technology Limited (the “Company”) is a U.S. holding company incorporated in the State of Nevada on
Hunan Ruixi holds a business license for automobile sales and has been engaged in automobile sales since January 2019, and Hunan Ruixi held business license for automobile financial leasing and engaged in automobile financial leasing services since March 2019, which has been ceased as of July 31, 2025. The Company also has been engaged in operating leasing services through Hunan Ruixi, Jiekai and its equity investee company, Jinkailong since March 2019. Jinkailong used to facilitate automobile sales and financing transactions for its clients, who are primarily ride-hailing drivers and provides them operating lease and relevant after-transaction services.
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
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
5
The following diagram illustrates the Company’s corporate structure as of the filing date of these unaudited condensed consolidated financial statements:
Former Voting Agreements with Jinkailong’s Other Shareholders
Hunan Ruixi entered into two voting agreements signed in August 2018 and February 2020, respectively, as amended (the “Voting Agreements”), with Jinkailong and other Jinkailong’s shareholders holding an aggregate of
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
As of December 31, 2025 and March 31, 2025, the continuing operations of the Company has outstanding balance due from Jinkailong amounted to $
As of December 31, 2025 and March 31, 2025, allowance for credit losses due from Jinkailong amounted to $
6
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 our liquidity position, including (1) the net loss of approximately $
However, the Company’s liquidity position has been substantially improved by two financing transactions completed in November 2025. Specifically, the Company received net cash proceeds of approximately $
Management evaluated the Company’s current liquidity and operating forecasts for the twelve months following the issuance of these unaudited condensed consolidated financial statements and has concluded that, as a result of the recent financing and improved cash flows, there was no substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issuance of unaudited condensed consolidated financial statements for the quarterly period ended December 31, 2025.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of presentation
The unaudited condensed consolidated financial statements, including the unaudited condensed consolidated balance sheet as of December 31, 2025, the unaudited condensed consolidated statements of operations and comprehensive loss, and the unaudited condensed consolidated statements of changes in equity for the three and nine months ended December 31, 2025 and 2024, and the unaudited condensed consolidated statements of cash flows for the nine months ended December 31, 2025 and 2024, as well as other information disclosed in the accompanying notes, have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and pursuant to the rules and regulations of the SEC and pursuant to Regulation S-X. The interim unaudited condensed consolidated financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and the notes thereto, included in the Form 10-K for the fiscal year ended March 31, 2025, which was filed with the SEC on July 10, 2025.
The interim unaudited condensed consolidated financial statements and the accompanying notes have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the results of operations for the periods presented. The consolidated results of operations for any interim period are not necessarily indicative of the results to be expected for the full year or for any other future years or interim periods.
(b) Restatement to Previously Reported Financial Statements
On June 26, 2026, the audit committee of the board of directors of the Company, after discussion with the Company’s management, concluded that the Company’s unaudited condensed consolidated financial statements as of and for the three and nine months ended December 31, 2025 included in the Quarterly Report on Form 10-Q as filed with the SEC on February 13, 2026 should no longer be relied upon due to the misstatements described below.
7
During the preparation of the Company’s consolidated financial statements for the year ended March 31, 2026, management identified the following misstatements to the Company’s financial statements for as of and for the three and nine months ended December 31, 2025:
During the three and nine months ended December 31, 2025, pre-funded warrants and November 2025 private placement warrants issued with common stocks in November 2025 were incorrectly classified as equity instruments, while the pre-funded warrants and November 2025 private placement warrants should be classified as liability instruments measured at fair value, with changes in fair value reported each period in earnings. Such error has resulted in the misstatements of “derivative liabilities”, “additional paid-in capital” and “accumulated deficit” as of December 31, 2025, and the misstatements of “change in fair value of derivative liabilities”, “excess of warrant fair value over offering proceeds”, “other income, net”, “net loss from continuing operations” and “net loss” for the three and nine months ended December 31, 2025. Adjustments have been made to the statements of operations as well as the balance sheet, statement of changes in equity (deficit) and statement of cash flows. The amount recorded reflects pre-funded warrants and November 2025 private placement warrants as liability instruments measured at fair value and resulted in increase in other expense, increase in derivative liabilities, and a reduction to additional paid-in capital.
This note discloses the nature of the restatement adjustments and discloses the cumulative effects of these adjustments included in Amendment No. 1 to the Original Form 10-Q. The effects of the misstatements have been corrected in all impacted tables and footnotes throughout these unaudited condensed consolidated financial statements.
Impact to the unaudited condensed consolidated balance sheet as of December 31, 2025
| As reported | Adjustments | As restated | ||||||||||
| Derivative liabilities | $ | $ | $ | |||||||||
| Total current liabilities | ||||||||||||
| Total liabilities | ||||||||||||
| Additional paid-in capital | ( | ) | ||||||||||
| Accumulated deficit | ( | ) | ( | ) | ( | ) | ||||||
| Total Senmiao Technology Limited stockholders’ equity (deficit) | ( | ) | ( | ) | ||||||||
| Total equity (deficit) | $ | $ | ( | ) | $ | ( | ) | |||||
Impact to the unaudited condensed consolidated statement of operations for the three months ended December 31, 2025
| As reported | Adjustments | As restated | ||||||||||
| Change in fair value of derivative liabilities | $ | $ | $ | |||||||||
| Excess of warrant fair value over offering proceeds | ( | ) | ( | ) | ||||||||
| Other income, net | ( | ) | ||||||||||
| Total other (expense) income, net | ( | ) | ( | ) | ||||||||
| Loss before income tax expense | ( | ) | ( | ) | ( | ) | ||||||
| Net loss from continuing operations | ( | ) | ( | ) | ( | ) | ||||||
| Net loss | ( | ) | ( | ) | ( | ) | ||||||
| Net loss attributable to the Company’s stockholders | ( | ) | ( | ) | ( | ) | ||||||
| Comprehensive loss | ( | ) | ( | ) | ( | ) | ||||||
| Total comprehensive loss attributable to stockholders | ( | ) | ( | ) | ( | ) | ||||||
| Loss per share - basic and diluted* | ( | ) | ( | ) | ( | ) | ||||||
| Loss per share - basic and diluted | ||||||||||||
| Continuing operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
8
Impact to the unaudited condensed consolidated statement of operations for the nine months ended December 31, 2025
| As reported | Adjustments | As restated | ||||||||||
| Change in fair value of derivative liabilities | $ | $ | $ | |||||||||
| Excess of warrant fair value over offering proceeds | ( | ) | ( | ) | ||||||||
| Other income, net | ( | ) | ||||||||||
| Total other (expense) income, net | ( | ) | ( | ) | ||||||||
| Loss before income tax expense | ( | ) | ( | ) | ( | ) | ||||||
| Net loss from continuing operations | ( | ) | ( | ) | ( | ) | ||||||
| Net loss | ( | ) | ( | ) | ( | ) | ||||||
| Net loss attributable to the Company’s stockholders | ( | ) | ( | ) | ( | ) | ||||||
| Comprehensive loss | ( | ) | ( | ) | ( | ) | ||||||
| Total comprehensive loss attributable to stockholders | ( | ) | ( | ) | ( | ) | ||||||
| Loss per share - basic and diluted* | ( | ) | ( | ) | ( | ) | ||||||
| Loss per share - basic and diluted | ||||||||||||
| Continuing operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Impact to the unaudited condensed consolidated statement of changes in equity for the nine months ended December 31, 2025
| As reported | Adjustments | As restated | ||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Additional paid-in capital | ( | ) | ||||||||||
| Accumulated deficit | ( | ) | ( | ) | ( | ) | ||||||
| Total equity (deficit) | $ | $ | ( | ) | $ | ( | ) | |||||
Impact to the unaudited condensed consolidated statement of cash flows for the nine months ended December 31, 2025
| As reported | Adjustments | As restated | ||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Net loss from continuing operations | ( | ) | ( | ) | ( | ) | ||||||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||
| Excess of warrant fair value over offering proceeds | ||||||||||||
| Offering costs allocable to derivative liabilities | ||||||||||||
| Change in fair value of derivative liabilities | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
(c) Comparability and reclassification adjustments
The Company has reclassified certain comparative balances in the unaudited condensed consolidated balance sheet as of March 31, 2025 and certain comparative amounts in the unaudited condensed consolidated statements of operations and comprehensive loss for the three and nine months ended December 31, 2024 to conform to the current period’s presentation, as a result of the retrospective application of discontinued operations of Yicheng, Senmiao Consulting and its subsidiaries (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, current liabilities of discontinued operations, and other liabilities of discontinued operations in the Unaudited condensed consolidated balance sheet as of March 31, 2025. The results of discontinued operations for the three and nine months ended December 31, 2024 have been reflected separately in the unaudited condensed consolidated statements of operations and comprehensive loss as a single line item for all periods presented in accordance with U.S. GAAP. Cash flows from discontinued operations of the three categories for the nine months ended December 31, 2024 were separately presented in the unaudited condensed consolidated statements of cash flows for all periods presented in accordance with U.S. GAAP. The reclassifications and retrospective adjustments to the March 31, 2025 balances are unaudited.
9
(d) Foreign currency translation
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing on the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates on the date of the balance sheet. The resulting exchange differences are recorded in the statement of operations.
The reporting currency of the Company and its subsidiaries is U.S. dollars (“US$”) and the unaudited condensed consolidated financial statements have been expressed in US$. However, the Company’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 unaudited condensed consolidated statements of changes in equity.
Translation of amounts from RMB into US$ has been made at the following exchange rates for the respective periods:
| December 31, | March 31, | |||||||
| 2025 | 2025 | |||||||
| Balance sheet items, except for equity accounts – RMB: US$1: | ||||||||
| For the Three months ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Items in the statements of operations and comprehensive loss, and cash flows – RMB: US$1: | ||||||||
| For the Nine months ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Items in the statements of operations and comprehensive loss, and cash flows – RMB: US$1: | ||||||||
(e) Use of estimates
In presenting the unaudited condensed consolidated financial statements in accordance with U.S. GAAP, management makes estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. The Company bases its estimates on past experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Estimates are used when accounting for items and matters including, but not limited to, revenue recognition, residual values of property and equipment, determinations of the useful lives and valuation of long-lived assets, estimates of allowances for credit losses for receivables and due from related parties, estimates of impairment of long-lived assets, and valuation of deferred tax assets.
10
(f) Fair values of financial instruments
Accounting Standards Codification (“ASC”) Topic 825, Financial Instruments (“Topic 825”) requires disclosure of fair value information of financial instruments, whether or not recognized in the balance sheets, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Topic 825 excludes certain financial instruments and all nonfinancial assets and liabilities from its disclosure requirements. Accordingly, the aggregate fair value amounts do not represent the underlying value of the Company. The three levels of valuation hierarchy are defined as follows:
| Level 1 | Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
| Level 2 | Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. |
| Level 3 | Inputs to the valuation methodology are unobservable and significant to the fair value. |
The following table sets forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2025 and March 31, 2025:
| Carrying Value as of | Fair Value Measurement as of | |||||||||||||||
| December 31, | December 31, 2025 | |||||||||||||||
| 2025 | Level 1 | Level 2 | Level 3 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Derivative liabilities | $ | $ | $ | $ | ||||||||||||
| Carrying Value as of | Fair Value Measurement as of | |||||||||||||||
| March 31, | March 31, 2025 | |||||||||||||||
| 2025 | Level 1 | Level 2 | Level 3 | |||||||||||||
| Derivative liabilities | $ | $ | $ | $ | ||||||||||||
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 nine months ended December 31, 2025 and for the year ended March 31, 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 | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Change in fair value of derivative liabilities | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| BALANCE as of March 31, 2025 | ||||||||||||||||||||||||||||||||||||
| Derivative liabilities recognized at grant date | ||||||||||||||||||||||||||||||||||||
| Change in fair value of derivative liabilities | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Exercise | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| BALANCE as of December 31, 2025 (Unaudited). | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
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 December 31, 2025 and March 31, 2025.
| As of December 31, 2025 | ||||||||||||||||||||||||||||||||
| February 10, 2021 | May 13, 2021 | November 10, 2021 | November | November | ||||||||||||||||||||||||||||
| Placement | Placement | Placement | 14, 2025 | 17, 2025 | ||||||||||||||||||||||||||||
| Agent | ROFR | Investor | Agent | Investor | Agent | Investor | Pre-funded | |||||||||||||||||||||||||
| Granted Date | Warrants | Warrants | Warrants | Warrants | Warrants | Warrants | Warrants | Warrants | ||||||||||||||||||||||||
| # of shares exercisable* | ||||||||||||||||||||||||||||||||
| Valuation date | ||||||||||||||||||||||||||||||||
| Exercise price* | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Stock price* | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Expected term (years) | ||||||||||||||||||||||||||||||||
| Risk-free interest rate | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
| Expected volatility | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
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* | ||||||||||||||||||||||||||||
| Valuation date | ||||||||||||||||||||||||||||
| Exercise price* | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Stock price* | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Expected term (years) | ||||||||||||||||||||||||||||
| Risk-free interest rate | % | % | % | % | % | % | % | |||||||||||||||||||||
| Expected volatility | % | % | % | % | % | % | % | |||||||||||||||||||||
| * |
| ** |
As of December 31, 2025 and March 31, 2025, financial instruments of the Company comprised primarily current assets and current liabilities including cash and cash equivalents, accounts receivable, finance lease receivables, prepayments, other receivables and other assets, due from related parties, accounts payable, advance from customers, lease liabilities, accrued expenses and other liabilities, due to related parties, and operating and financing lease liabilities, which approximate their fair values because of the short-term nature of these instruments, and current liabilities of borrowings from a financial institution, which approximate their fair values because of the stated loan interest rate to the rate charged by similar financial institutions.
The non-current portion of finance lease receivables, operating and financing lease liabilities were recorded at the gross amount adjusted for the interest using the effective interest rate method. The Company believes that the effective interest rates underlying these instruments approximate their fair values because the Company used its incremental borrowing rate to recognize the present value of these instruments as of December 31, 2025 and March 31, 2025.
Other than as listed above, the Company did not identify any assets or liabilities that are required to be presented on the balance sheet at fair value.
(g) 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.
13
(h) Cash and cash equivalents
Cash and cash equivalents primarily consist of bank deposits with original maturities of three months or less, which are unrestricted as to withdrawal and use. Cash and cash equivalents also consist of funds received from automobile purchasers as payments for automobiles, funds received from automobile lessees as payments for rentals, which were held at the third-party platforms’ fund accounts and which are unrestricted and immediately available for withdrawal and use.
(i) Accounts receivable
Accounts receivable are recorded at the invoiced amount less an allowance for any uncollectible accounts and do not bear interest, and are due on demand. The carrying value of accounts receivable is reduced by an allowance that reflects the Company’s best estimate of the amounts that will not be collected. An allowance for credit losses is recorded in the period when a loss is probable based on an assessment of specific evidence indicating collection is unlikely, historical bad debt rates, accounts aging, financial conditions of the customer and industry trends. Starting from April 1, 2023, the Company adopted ASU No.2016-13 “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASC Topic 326”). Management also periodically evaluates individual customer’s financial condition, credit history, and the current economic conditions to make adjustments in the allowance when it is considered necessary. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company’s management continues to evaluate the reasonableness of the valuation allowance policy and update it if necessary. As of December 31, 2025 and March 31, 2025, the Company determined allowance for credit losses was necessary for accounts receivable.
(j) 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 December 31, 2025 and March 31, 2025, the Company determined allowance for credit losses was necessary for finance lease receivables.
As of December 31, 2025 and March 31, 2025, finance lease receivables consisted of the following:
| December 31, | March 31, | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Minimum lease payments receivable | $ | $ | ||||||
| Less: Unearned interest | ( | ) | ( | ) | ||||
| Financing lease receivables | $ | $ | ||||||
| Finance lease receivables, current | $ | $ | ||||||
| Finance lease receivables, non-current | $ | $ | ||||||
14
Future scheduled minimum lease payments for investments in sales-type leases as of December 31, 2025 are as follows:
| Minimum future payments receivable | ||||
| Twelve months ending December 31, 2026 | $ | |||
| Twelve months ending December 31, 2027 | ||||
| Total | $ | |||
(k) 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 less 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 | ||||
| Automobiles | ||||
The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An asset is considered impaired if its carrying amount exceeds the future net undiscounted cash flows that the asset is expected to generate. If such asset is considered to be impaired, the impairment recognized is the amount by which the carrying amount of the asset, if any, exceeds its fair value determined using a discounted cash flow model. For the three and nine months ended December 31, 2025 and 2024, the Company did not recognize impairment for property and equipment.
Costs of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The cost and related accumulated depreciation and amortization of assets disposed of or retired are removed from the accounts, and any resulting gain or loss is reflected in the unaudited condensed consolidated statements of operations and comprehensive loss.
(l) 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 | ||||
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 three and nine months ended December 31, 2025 and 2024, there was no impairment of intangible assets.
(m) Loss per share
Basic loss per share is computed by dividing net loss attributable to stockholders by the weighted average number of outstanding shares of common stock, adjusted for outstanding shares of common stock that are subject to repurchase.
For the calculation of diluted loss per share, net loss attributable to stockholders for basic loss per share is adjusted by the effect of dilutive securities, including share-based awards, under the treasury stock method and convertible securities under the if-converted method. Potentially dilutive securities, of which the amounts are insignificant, have been excluded from the computation of diluted net loss per share if their inclusion is anti-dilutive.
As of December 31, 2025, the Company’s dilutive securities from the outstanding series A convertible preferred stock are convertible into
15
(n) Derivative liabilities
A contract is designated as an asset or a liability and is carried at fair value on the Company’s balance sheet, with any changes in fair value recorded in the Company’s results of operations. The Company then determines which options, warrants and embedded features require liability accounting and records the fair value as a derivative liability. The changes in the values of these instruments are shown in the unaudited condensed consolidated statements of operations and comprehensive loss as “change in fair value of derivative liabilities”.
(o) 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.
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
The Company excludes from the measurement of its lease revenues any tax assessed by a governmental authority that is both imposed on and concurrent with a specific revenue-producing transaction and collected from a customer.
The Company considers the economic life of most of the automobiles to be to years, since this represents the most common long-term lease term for its automobiles and the automobiles will be used for online ride-hailing services. The Company believes three to 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 bundled lease arrangement, are developed based upon the local prevailing rates in the marketplace where its customer will be able to obtain an automobile loan under similar terms from the bank. The Company reassesses its pricing interest rates quarterly based on changes in the local prevailing rates in the marketplace. As of December 31, 2025, the Company’s pricing interest rate was
16
Contract liability
The Company’s contract liabilities consist of advances from customers, which are the upfront rent received from customers. The revenue recognized for the nine months ended December 31, 2025 and 2024 that was previously included in the advances from customers balances as of March 31, 2025 and March 31, 2024 was $
The Company’s advances from customers amounted to $
Disaggregated information of revenues by business lines are as follows:
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Automobile Transaction and Related Services | ||||||||||||||||
| - Operating lease revenues from automobile rentals | $ | $ | $ | $ | ||||||||||||
| - Financing revenues | ||||||||||||||||
| - Service fees from NEVs leasing | ||||||||||||||||
| - Default revenue | ||||||||||||||||
| - Monthly services commissions | ||||||||||||||||
| - Service fees from automobile purchase services | ||||||||||||||||
| - Other service fees | ||||||||||||||||
| Total Revenues | $ | $ | $ | $ | ||||||||||||
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, is accounted for under ASC Topic 842. Rental transactions are satisfied over the rental period and is recognized over time. As the operating lease revenue are variable in nature which is based on online ride-hailing drivers or third-parties’ performance for a certain period, the Company recognized the revenue from operating lease by using the output method based on periodic settlement between the Company and the online ride-hailing drivers or third-parties when such revenue is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Rental periods are short term in nature, generally are twelve months or less.
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, which based on the product solutions. The service content includes: (1) introducing the current situation of the online ride-hailing industry; (2) guiding the lessees to open an account on Partner Platforms; (3) introducing online ride-hailing business and order-taking skills; (4) providing violation handling consultation, insurance claims consultation, and traffic accident legal consultation; etc.
Default revenue – The Company charged the lessees default expenses such as early-termination the contracts or other violation behaviors to the contracts. The default punishment is calculated and confirmed by the customers.
17
Monthly services commissions – Commissions from the services generated from the management and related services provided to Partner Platforms and other companies, which are settled on a monthly basis. The Company recognizes revenues at a point in time when performance obligations are completed and the commission amount is confirmed by the Partner Platforms and other companies, based on their evaluations on the services provided by the Company.
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, which 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 corresponding an automobile is delivered to the lessee or purchaser. The Company recognizes the revenue of service fees from NEVs leasing once the lessees terminate the lease term and confirmed the settlement between the Company and the lessees. 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 and sales of automobiles. The Company recognizes revenues at a point in time when performance obligations are completed and the collectability is probable from the customers.
(p) 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; |
| ● | The lease term is for |
| ● | The present value of the sum of the lease payments equals or exceeds |
| ● | 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.
18
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 of the automobile loans on the remaining balance of the liability.
The Company’s review on the impairment of its ROU assets is 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 an 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 three and nine months ended December 31, 2025 and 2024, the Company did not recognize impairment loss on its ROU assets.
(q) Stock-Based Compensation
The Company accounts for share-based payments issued in exchange for employee and non-employee services under ASC 718, Stock Compensation. Share-based payments 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.
(r) 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).
(s) Significant risks and uncertainties
| 1) | Credit risk |
| a. | Assets that potentially subject the Company to significant concentration of credit risk primarily consist of cash and cash equivalents. The maximum exposure of these assets to credit risk is their carrying amounts as of the balance sheet dates. As of December 31, 2025 and March 31, 2025, approximately $ |
19
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 December 31, 2025 and March 31, 2025, the Company record no allowance for credit losses against accounts receivable.
| 2) | Foreign currency risk |
As of December 31, 2025 and March 31, 2025 substantially all of the Company’s operating activities and major assets and liabilities, except for the cash deposit of approximately $
(t) 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 unaudited condensed 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 unaudited condensed consolidated statements and related disclosures.
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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 unaudited condensed consolidated statements of operations and comprehensive loss for the three and nine months ended December 31, 2025 and 2024.
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ( | ) | ||||||||||||||
| Gross profit | ||||||||||||||||
| Operating expenses | ||||||||||||||||
| Selling, general and administrative expenses | ( | ) | ||||||||||||||
| Provision for credit losses | ( | ) | ||||||||||||||
| Total operating expenses | ( | ) | ||||||||||||||
| Loss from operations | ( | ) | ||||||||||||||
| Other income, net | ||||||||||||||||
| Interest expense | ( | ) | ||||||||||||||
| Loss before income taxes | ( | ) | ||||||||||||||
| Gain on disposal of discontinued operations | ||||||||||||||||
| Income tax benefit | ||||||||||||||||
| Net income from discontinued operations | $ | $ | $ | $ | ||||||||||||
Reconciliation of the amount of cash flows from discontinued operations in the unaudited condensed consolidated statements of cash flows for the nine months ended December 31, 2025 and 2024 are as follows:
For the Nine Months Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Net cash used in operating activities from discontinued operations | $ | $ | ( | ) | ||||
| Net cash provided by investing activities from discontinued operations | $ | $ | ||||||
| Net cash used in financing activities from discontinued operations | $ | $ | ( | ) | ||||
21
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 Yicheng, Senmiao Consulting and its subsidiaries. In December 2025, the Company entered into the Sichuan Acquisition Agreement with HMST. Pursuant to the Sichuan Acquisition Agreement, the Company sold
| March 31, 2025 | ||||
| (Unaudited) | ||||
| ASSETS | ||||
| Current assets | ||||
| Cash and cash equivalents | $ | |||
| Accounts receivable | ||||
| Accounts receivable, a related party | ||||
| Prepayments, other receivables, and other current assets, net | ||||
| Prepayment - a related party | ||||
| Due from related parties, net, current | ||||
| Total current assets | ||||
| Other Assets | ||||
| Property and equipment, net | ||||
| Financing lease right-of-use assets, net | ||||
| Due from a related party, net, non-current | ||||
| Total other assets | ||||
| Total assets | $ | |||
| LIABILITIES | ||||
| Current liabilities | ||||
| Accounts payable | $ | |||
| Advances from customers | ||||
| Income tax payable | ||||
| Accrued expenses and other liabilities | ||||
| Due to related parties | ||||
| Financing lease liabilities, current | ||||
| Total current liabilities | ||||
| Total liabilities | $ | |||
22
The following table sets forth the reconciliation of the amounts of major classes of income and losses from discontinued operations of Yicheng, Senmiao Consulting and its subsidiaries in the unaudited condensed consolidated statements of operations and comprehensive loss for the three and nine months ended December 31, 2025 and 2024.
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gross profit | ||||||||||||||||
| Operating expenses | ||||||||||||||||
| Selling, general and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Provision for credit losses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expenses), net | ( | ) | ( | ) | ( | ) | ||||||||||
| Interest expense on finance leases | ( | ) | ( | ) | ( | ) | ||||||||||
| Loss before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gain on disposal of discontinued operations* | ||||||||||||||||
| Income tax expenses | ||||||||||||||||
| Net loss from discontinued operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| * |
Reconciliation of the amount of cash flows from discontinued operations in the unaudited condensed consolidated statements of cash flows for the nine months ended December 31, 2025 and 2024 are as follows:
| For the Nine Months Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Net cash (used in) provided by operating activities from discontinued operations | $ | ( | ) | $ | ||||
| Net cash used in investing activities from discontinued operations | $ | $ | ( | ) | ||||
| Net cash provided by (used in) financing activities from discontinued operations | $ | $ | ( | ) | ||||
5. ACCOUNTS RECEIVABLE
Accounts receivable includes rental receivables due from operating lessees. It also includes a portion of bundled lease arrangements on fixed minimum monthly payments to be paid by the automobile purchasers arising from automobile sales and services fees, net of unearned interest income, discounted using the Company’s lease pricing interest rates.
As of December 31, 2025 and March 31, 2025, accounts receivable was comprised of the following:
| December 31, | March 31, | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Receivables of operating lease | $ | $ | ||||||
| Receivables of automobile sales due from automobile purchasers | ||||||||
| Total Accounts receivable | $ | $ | ||||||
23
Movement of allowance for credit losses for the nine months ended December 31, 2025 and for the year ended March 31, 2025 are as follows:
| December 31, | March 31, | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Beginning balance | $ | $ | ||||||
| Write off | ( | ) | ||||||
| Translation adjustment | ( | ) | ||||||
| Ending balance | $ | $ | ||||||
There were recoveries of accounts receivable that had been written off in prior periods during the nine months ended December 31, 2025.
6. PREPAYMENTS, OTHER RECEIVABLES AND OTHER CURRENT ASSETS
As of December 31, 2025 and March 31, 2025, the prepayments, other receivables and other current assets were comprised of the following:
| December 31, | March 31, | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Prepaid expenses (i) | $ | $ | ||||||
| Purchase contract termination refund (ii) | ||||||||
| Deposits (iii) | ||||||||
| Employee advances | ||||||||
| Others | ||||||||
| Total prepayments, other receivables and other current assets | $ | $ | ||||||
Movement of allowance for credit losses for the nine months ended December 31, 2025 and for the year ended March 31, 2025 are as follows:
| December 31, | March 31, | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Beginning balance | $ | $ | ||||||
| Write off | ( | ) | ||||||
| Translation adjustment | ||||||||
| Ending balance | $ | $ | ||||||
There were recoveries of other receivables that had been written off in prior periods during the nine months ended December 31, 2025.
| (i) | Prepaid expense |
| (ii) | Purchase contract termination refund |
| (iii) | Deposits |
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7. PROPERTY AND EQUIPMENT, NET
Property and equipment as of December 31, 2025 and March 31, 2025 consist of the following:
| December 31, | March 31, | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Automobiles | $ | $ | ||||||
| Office equipment, fixtures and furniture | ||||||||
| Subtotal | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Total property and equipment, net | $ | $ | ||||||
Depreciation expense for the three and nine months ended December 31, 2025 were $
Depreciation expense for the three and nine months ended December 31, 2024 were $
8. INTANGIBLE ASSETS, NET
Intangible assets as of December 31, 2025 and March 31, 2025 consisted of the following:
| December 31 | March 31, | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Software | $ | $ | ||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||
| Total intangible assets, net | $ | $ | ||||||
Amortization expense for the three and nine months ended December 31, 2025 were $
Amortization expense for the three and nine months ended December 31, 2024 were $
The following table sets forth the Company’s amortization expense for the next five years as of December 31, 2025:
| Amortization expenses | ||||
| Twelve months ending December 31, 2026 | $ | |||
| Twelve months ending December 31, 2027 | ||||
| Twelve months ending December 31, 2028 | ||||
| Twelve months ending December 31, 2029 | ||||
| Twelve months ending December 31, 2030 | ||||
| $ | ||||
25
9. ACCRUED EXPENSES AND OTHER LIABILITIES
| December 31, | March 31, | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Deposits (i) | $ | $ | ||||||
| Assumed liabilities of the disposed subsidiaries (ii) | ||||||||
| Accrued expenses (iii) | ||||||||
| Accrued payroll and welfare | ||||||||
| Other taxes payable | ||||||||
| Payables for expenditures on automobile transaction and related services | ||||||||
| Other payables | ||||||||
| Total accrued expenses and other liabilities | $ | $ | ||||||
| (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 the disposed subsidiaries |
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 Yicheng, Senmiao Consulting and its subsidiaries (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 $
As of December 31, 2025 and March 31, 2025, the Company did not make adequate employee benefit contributions in the amount of $
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 unaudited condensed consolidated statements of balance sheets and recorded at estimated fair value at each reporting date, computed using the Black-Scholes valuation model. Changes in the liability from period to period are recorded in the unaudited condensed consolidated statements of operations and comprehensive loss under the caption “Change in fair value of derivative liabilities.”
26
August 2020 Underwriters’ Warrants
Giving retroactive effect to the twice
February 2021 Registered Direct Offering Warrants
Giving retroactive effect to the twice
May 2021 Registered Direct Offering Warrants
Giving retroactive effect to the twice
November 2021 Private Placement Warrants
Giving (1) retroactive effect to the twice
On November 18, 2022, a holder of November 2021 private placement warrants exercised the warrants on a “cashless” basis. On June 11, 2025, a holder of November 2021 private placement warrants exercised the warrants with exercise price of $
Giving retroactive effect to the twice
27
During the three and nine months ended December 31, 2025, the change of fair value was a gain of $
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
The Company concluded that both pre-funded warrants and private placement warrants qualify as derivative liabilities. At the issuance date in November 2025, the fair value of these warrants was estimated at $
During the three and nine months ended December 31, 2025, the change of fair value was a gain of $
As of the filing date of these unaudited condensed 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 private placement warrants remain outstanding as issued.
Restricted Stock Units
On October 29, 2020, the Board approved the issuance of an aggregate of
28
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
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 $
1-for- 10 shares reverse split on common stock
The Company considered the above transactions after giving a retroactive effect to a
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
29
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
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
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 nine months ended December 31, 2025 and 2024, the Company’s foreign subsidiaries in China were operating at loss and as such, did not record a liability for GILTI tax.
The Company’s net operating loss for U.S. income taxes from U.S. amounted to approximately $
PRC
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
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$
30
Net loss before income tax by jurisdiction as follows:
| For the Nine Months Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| U.S. | $ | ( | ) | $ | ( | ) | ||
| PRC | ( | ) | ( | ) | ||||
| Hong Kong | ( | ) | ||||||
| Total net loss before income tax | $ | ( | ) | $ | ( | ) | ||
For the three and nine months ended December 31, 2025 and 2024, the Company had no current tax expense or deferred tax expense.
As of December 31, 2025 and March 31, 2025, the Company’s PRC entity had net operating loss carryforwards of approximately $
The tax effects of temporary differences that give rise to the Company’s deferred tax assets and liabilities are as follows:
| December 31, | March 31, | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Deferred Tax Assets | ||||||||
| Net operating loss carryforwards in the PRC | $ | $ | ||||||
| Net operating loss carryforwards in the U.S. | ||||||||
| Excess of warrant fair value over offering proceeds | ||||||||
| Allowance for credit losses | ||||||||
| Total deferred tax assets | ||||||||
| Less: valuation allowance | ( | ) | ( | ) | ||||
| Total deferred tax assets, net of valuation allowance | ||||||||
| Net off against deferred tax liabilities | ( | ) | ||||||
| Deferred tax assets, net | $ | $ | ||||||
| December 31, | March 31, | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Deferred tax liabilities | ||||||||
| Change in fair value of derivative liabilities | $ | ( | ) | $ | ||||
| Total deferred tax liabilities | ( | ) | ||||||
| Net off against deferred tax assets | ||||||||
| Net deferred tax liabilities | $ | $ | ||||||
Uncertain tax positions
The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of December 31, 2025 and March 31, 2025, the Company did not have any unrecognized uncertain tax positions and the Company does not believe that its unrecognized tax benefits will change over the next twelve months. For the three and nine months ended December 31, 2025 and 2024, the Company did not incur any interest and penalties related to potential underpaid income tax expenses. According to PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or withholding agent. The statute of limitations will be extended five years under special circumstances, which are not clearly defined (but an underpayment of tax liability exceeding RMB
13. CONCENTRATION
Major Suppliers
For the three and nine months ended December 31, 2025, one supplier accounted for approximately
For the three months ended December 31, 2024, one supplier accounted for approximately
31
14. RELATED PARTY TRANSACTIONS AND BALANCES
1. Related Party Balances
1) Due from related parties
As of December 31, 2025 and March 31, 2025, balances due from related parties from the Company’s continuing operations were comprised of the following:
| December 31, | March 31, | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Total due from related parties | $ | $ | ||||||
| Less: Allowance for credit losses | ( | ) | ( | ) | ||||
| Due from related parties, net | $ | $ | ||||||
| Due from a related party, net, current | $ | $ | ||||||
| Due from a related party, net, non-current | $ | $ | ||||||
As of December 31, 2025 and March 31, 2025, balances due from Jinkailong, the Company’s equity investee company, was $
Movement of allowance for credit losses due from Jinkailong for the nine months ended December 31, 2025 and for the year ended March 31, 2025 are as follows:
| December 31, | March 31, | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Beginning balance | $ | $ | ||||||
| Addition | ||||||||
| Translation adjustment | ( | ) | ||||||
| Ending balance | $ | $ | ||||||
On January 3, 2024, Xiang Hu, a shareholder of the Company, entered into a loan agreement wherein the Company agreed to provide an interest-free special reserve loan of $
2) Due to related parties
| December 31, | March 31, | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Loan payable to a related party (i) | $ | $ | ||||||
| Other payable due to a related party (ii) | ||||||||
| Total due to related parties | $ | $ | ||||||
| (i) |
| (ii) |
32
3) Operating lease right-of-use assets - a related party and Operating lease liabilities - a related party
| December 31, | March 31, | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Operating lease right-of-use assets – a related party | $ | $ | ||||||
| Operating lease liabilities, current – a related party | $ | $ | ||||||
| Operating lease liabilities, non-current – a related party | $ | $ | ||||||
In November 2018, Hunan Ruixi entered into an office lease agreement with Hunan Dingchentai Investment Co., Ltd. (“Dingchentai”), a company where one of the Company’s independent directors serves as the legal representative and general manager. The original lease agreement with Dingchentai was terminated on July 1, 2019. The Company entered into another lease with Dingchentai on substantially similar terms on September 27, 2019, and a renewal lease contract was signed in June 2022 which extended the original lease to May 2025, another renewal lease contract was signed on June 2025 which extended the original lease to May 2027, with an annual rent of approximately $
2. Related Party Transactions
For the three and nine months ended December 31, 2025, the Company incurred $
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. Revenue recognition section of Note 3 (o), 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 nine months ended December 31, 2025 and 2024.
Lessee
As of December 31, 2025 and March 31, 2025, the Company has engaged in offices and parking lot which were classified as operating leases.
The Company leased automobiles under operating lease agreements with a term shorter than twelve months which it elected not to recognize lease assets and lease liabilities under ASC 842. Instead, the Company recognized the lease payments in profit or loss on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred. In addition, the Company had automobiles leases which were classified as finance lease before the disposal of Corenel on April 16, 2025.
The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The Company recognized lease expense on a straight-line basis over the lease term for operating lease. Meanwhile, the Company recognized the finance leases ROU assets and interest on an amortized cost basis. The amortization of finance ROU assets is recognized on a straight-line basis as amortization expense, while the lease liability is increased to reflect interest on the liability and decreased to reflect the lease payments made during the period. Interest expense on the lease liability is determined each period during the lease term as the amount that results in a constant periodic interest rate of the automobile loans on the remaining balance of the liability.
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As of December 31, 2025, the weighted-average remaining operating term of its existing leases is approximately
Operating lease expenses for offices and showroom leases totaled $
Operating lease expense for office and showroom leases totaled $
The following table sets forth the Company’s minimum lease payments in future periods:
| Operating lease | ||||
| payments* | ||||
| (Unaudited) | ||||
| Twelve months ending December 31, 2026 | $ | |||
| Twelve months ending December 31, 2027 | ||||
| Total lease payments | ||||
| Less: imputed interest | ( | ) | ||
| Present value of lease liabilities | $ | |||
| * |
16. COMMITMENTS AND CONTINGENCIES
Contingencies
In measuring the credit risk of automobile purchasers, the Company primarily reflects the “probability of default” by the automobile purchasers on its contractual obligations and considers the current financial position of the automobile purchasers and its likely future development.
The Company manages the credit risk of automobile purchasers by performing preliminary credit checks of each automobile purchaser and ongoing monitoring every month. By using the current credit loss model, management is of the opinion that the Company is bearing the credit risk to repay the principal and interests to the financial institutions if automobile purchasers’ default on their payments for more than three months. Management also periodically re-evaluates probability of default of automobile purchasers to make adjustments in the allowance, when necessary.
Purchase commitments
As of the filing date of these unaudited condensed consolidated financial statements, the Company has no purchase commitment.
Contingent liability of Jinkailong
Pursuant to the Regulations of the State Council on Implementing the Management System for Registered Capital Registration in the Company Law of the People’s Republic of China issued on July 1, 2024 (the “Registered Capital Registration Implementing Rules”), as Jinkailong was registered and established before June 30, 2024, its shareholders should fully pay their unpaid subscribed capital before June 30, 2032. As of December 31, 2025, Hunan Ruixi holds
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17. 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 allocates costs and expenses that are not directly attributable to a specific segment, such as those that support infrastructure across different segments, to different segments mainly on the basis of usage, revenue or headcount, depending on the nature of the relevant costs and expenses. 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 it operates in a reportable segment for automobile transaction and related services, and operated in a reportable segment for online ride-hailing platform, which had been ceased on August 20, 2024. The segments were organized based on type of service offered.
The following table presents the significant revenue, loss from operations, loss before income taxes and net loss in the Company’s segments for the three and nine months ended December 31, 2025 and 2024:
| For the Three Months Ended December 31, | ||||||||||||
| 2025 | 2024 | |||||||||||
| Automobile | Automobile | |||||||||||
| Transaction and | Transaction and | Online ride-hailing | ||||||||||
| Related | Related | platform | ||||||||||
| Services from continuing operations* | Services from continuing operations* | Services from discontinued operations | ||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
| Revenues | $ | $ | $ | |||||||||
| Depreciation and amortization | $ | $ | $ | |||||||||
| Loss from operations | $ | ( | ) | $ | ( | ) | $ | |||||
| Loss before income taxes | $ | ( | ) | $ | ( | ) | $ | |||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | |||||
| Capital expenditure | $ | $ | $ | |||||||||
| For the Nine Months Ended December 31, | ||||||||||||
| 2025 | 2024 | |||||||||||
| Automobile | Automobile | |||||||||||
| Transaction and | Transaction and | Online ride-hailing | ||||||||||
| Related | Related | platform | ||||||||||
| Services from continuing operations* | Services from continuing operations* | Services from discontinued operations | ||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
| Revenues | $ | $ | $ | |||||||||
| Depreciation and amortization | $ | $ | $ | |||||||||
| Loss from operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Loss before income taxes | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Net (loss) income | $ | ( | ) | $ | ( | ) | $ | |||||
| Capital expenditure | $ | $ | $ | |||||||||
| * |
18. SUBSEQUENT EVENTS
The Company evaluated all events and transactions that occurred after December 31, 2025 up through the date the Company filed these unaudited condensed consolidated financial statements. No events require adjustment to or disclosure in the unaudited condensed consolidated financial statements.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
(As Restated)
The following discussion and analysis of our results of operations and financial condition should be read together with our unaudited condensed consolidated financial statements and the notes thereto, which are included elsewhere in this Report and our Annual Report on Form 10-K for the year ended March 31, 2025 (the “Annual Report”) filed with the SEC. Our unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Overview
We are a provider of automobile transaction and related services, connecting consumers, who are mostly existing and prospective ride-hailing drivers affiliated with different operators of online ride-hailing platforms in the People’s Republic of China (“PRC” or “China”). We provide automobile transaction and related services in Hunan Province of China through our majority owned subsidiary, Hunan Ruixi Business Operation Management Co., Ltd., a PRC limited liability company (“Hunan Ruixi”).
Prior to December 31, 2025, we provided automobile transaction and related services in Sichuan Province of China through our former majority owned subsidiary, Chengdu Jiekai Yunli Technology Co., Ltd., a PRC limited liability company and its subsidiary (“Jiekai”) and our former wholly owned subsidiary, Chengdu Corenel Technology Co., Ltd. a PRC limited liability company (“Corenel”). As discussed below under “– Automobile Transactions and Related Services”, we ceased our automobile transactions and related services in Sichuan Province of China on December 31 2025.
From October 2020 to August 2024, we also operated an online ride-hailing platform through Hunan Xixingtianxia Technology Co., Ltd. (“XXTX”), a former wholly-owned subsidiary of Sichuan Senmiao Zecheng Business Consulting Co., Ltd., our wholly-owned subsidiary (“Senmiao Consulting”). The platform enabled qualified ride-hailing drivers to provide application-based transportation services mainly in Chengdu, Changsha and other 20 cities in China. As more fully discussed below under “– Our Discontinued Ride-Hailing Platform Services”, we ceased our online ride-hailing Platform Services on August 20, 2024.
Our Automobile Transactions and Related Services
Our Automobile Transaction and Related Services are mainly comprised of (i) automobile operating lease where we provide car rental services to individual customers to meet their personal needs with lease term no more than twelve months (the “Auto Operating Leasing”); (ii) service fees from new energy vehicles (“NEVs”) leasing where we charge NEVs lessees for a series of the services provided to them based on the chosen product solutions (the “Service for NEVs Leasing”); (iii) service fees from automobile purchase for a series of the services provided to purchasers throughout the purchase process based on the sales price of the automobiles and relevant services provided (the “Service for Automobile Purchase”) ;(iv) monthly services where we provide management and related services to other online ride-hailing platforms we cooperated with (“Partner Platforms”) and other companies and earn commission from them (the “Auto Commissions”); (v) automobile financing where we provide our customers with auto finance solutions through financing leases (the “Auto Financing”); (vi) default expenses we charges to the lessees for early-termination the contracts or other violation behaviors to the contracts (the “Default Revenue”); and (vii) other supporting services provided to customers, including auto management and other related services (the “Auto Management Services”) and automobile sales (the “Auto Sales”). We started our facilitation and supporting services in November 2018, the sale of automobiles in January 2019, and financial and operating leasing in March 2019, respectively.
Considering the fierce competition of the online ride-hailing industry and our operating losses in China, in December 2025 the Company entered into a certain Acquisition Agreement (the “Sichuan Acquisition Agreement”) with Hu Mao Sheng Tang Holdings Limited., a non-affiliated Hong Kong company (“HMST”). Pursuant to the Sichuan Acquisition Agreement, the Company sold all of the equity interests in Sichuan Senmiao Yicheng Assets Management Co., Ltd. (“Yicheng”), Sichuan Senmiao Zecheng Business Consulting Co., Ltd. (“Senmiao Consulting”) and its subsidiaries, which were our former subsidiaries in Sichuan Province of China (“former subsidiaries in Sichuan”), to HMST for nil consideration, while we undertook certain liabilities of $518,388 which were previously assumed by former subsidiaries in Sichuan (the “Disposition”). On December 31, 2025, the Disposition was completed and we ceased our automobile Transactions and Related Services in Sichuan Province of China.
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Since November 22, 2018, the acquisition date of Hunan Ruixi, and as of December 31, 2025, we have facilitated financing for an aggregate of 312 automobiles with a total value of approximately $5.3 million, sold an aggregate of 1,516 automobiles with a total value of approximately $14.5 million and delivered 2,300 automobiles under operating leases and 197 automobiles under financing leases to customers, the vast majority of whom are online ride-hailing drivers.
The table below provides a breakdown of the number of vehicles sold or delivered under different leasing arrangements or managed by us and corresponding revenue generated for the three and nine months ended December 31, 2025 and 2024, respectively:
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||
| Number of | Number of | Number of | Number of | |||||||||||||||||||||||||||||
| Vehicles | Revenue* | Vehicles | Revenue* | Vehicles | Revenue* | Vehicles | Revenue* | |||||||||||||||||||||||||
| Auto Operating Leasing | 322 | $ | 317,000 | 346 | $ | 410,000 | 340 | 1,076,000 | 367 | $ | 1,313,000 | |||||||||||||||||||||
| Auto Commissions | — | $ | 3,000 | — | $ | 4,000 | — | 14,000 | — | $ | 16,000 | |||||||||||||||||||||
| Auto Financing | 50 | $ | 15,000 | 51 | $ | 24,000 | 59 | 56,000 | 53 | $ | 73,000 | |||||||||||||||||||||
| Other Services | >340 | $ | 24,000 | >360 | $ | 13,000 | >370 | 74,000 | >420 | $ | 74,000 | |||||||||||||||||||||
| * | The number was rounded to the nearest thousand for disclosure purpose. |
During the three months ended December 31, 2025, our Auto Operating Leasing, Auto Commissions, Auto Financing and other services income accounted for approximately 88.4%, 1.0%, 4.2% and 6.4% of our total revenue from our automobile transactions and related services, respectively, while our Auto Operating Leasing, Auto Commissions, Auto Financing, and other services income accounted for approximately 90.8%, 0.8%, 5.2%, and 3.2% for the three months ended December 31, 2024, respectively. During the nine months ended December 31, 2025, our Auto Operating Leasing, Auto Commissions, Auto Financing and other services income accounted for approximately 88.2%, 1.2%, 4.6% and 6.0% of our total revenue from our automobile transactions and related services, respectively, while our Auto Operating Leasing, Auto Commissions, Auto Financing, and other services income accounted for approximately 88.9%, 1.1%, 4.9%, and 5.1% for the nine months ended December 31, 2024, respectively.
Our Discontinued Online Ride-Hailing Platform Services
From October 2020 to August 2024, we operated our own online ride-hailing platform in China. The platform (called Xixingtianxia) was owned and operated by XXTX, of which Senmiao Consulting acquired the 100% equity interest pursuant to a series of investment and supplementary agreements. XXTX operated Xixingtianxia and held a national online reservation taxi operating license, which served online ride-hailing drivers in 22 cities in China, providing them with a platform to view and take customer orders for rides. XXTX generated revenue from providing services to online ride-hailing drivers to assist them in providing transportation services to the riders looking for taxi/ride-hailing services. XXTX earned commissions for each completed order as the difference between an upfront quoted fare and the amount earned by a driver based on actual time and distance for the ride charged to the rider.
Due to the fierce competition of the online ride-hailing industry, XXTX had suffered loss in the past. Since December 2023, XXTX had engaged Anhui Lianma Technology Co., Ltd. (“Anhui Lianma”), a third-party to co-operate the online ride-hailing platform by outsourcing certain daily operation work to Anhui Lianma in most of cities it operates platform in XXTX and Anhui Lianma will jointly share the operational profits, with the specific calculation method being defined in the cooperation agreement. However, considering the changes in online ride-hailing industry and development plan of the Company, on August 8, 2024, we entered into the XXTX Acquisition Agreement with the Purchaser, and certain other parties thereto. Pursuant to the XXTX Acquisition Agreement, the Purchaser acquired all of the equity interests in XXTX at a total purchase price of zero, while taking over certain liabilities of XXTX as defined in the XXTX Acquisition Agreement. On August 20, 2024, the Acquisition was completed and we ceased the online ride-hailing platform services.
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Key Factors and Risks Affecting Results of Operations
Ability to Increase Our Automobile Lessee
Our revenue growth has been largely driven by the expansion of our automobile lessee base and the corresponding revenue generated from operating and financial leasing. We acquire customers for our Automobile Transaction and Related Services through the network of third-party sales teams, referral from online ride-hailing platforms and our own efforts including online advertising and billboard advertising. We also send out fliers and participate in trade shows to advertise our services. We plan to maintain the number of our customers by marketing our companies to our existing and prospective automobile lessees in the cities we now operate in. We expect to keep promoting the growth of our automobile rental business with automobile rental solutions/incentives specifically targeted at drivers using our Partner Platforms. An effective cross-selling strategies between our automobile leasing business and our Partner Platforms is important to our expansion and revenue growth. We also plan to strengthen our marketing efforts through the collaboration with certain automobile dealers and through our own team by employing more experienced staff, sharing market resources with our equity investee company, and improving the quality and variety of our services. As of December 31, 2025, we had one employee in our own sales department.
Management of Automobile Rentals
Due to the fierce competition of online ride-hailing industry in those cities we operated in, we have witnessed a high turn-over rate on the short-term car rentals during the three and nine months ended December 31, 2025. To meet the demand in Changsha, we have purchased automobiles for our operating lease. The daily management and timely maintenance of leased automobiles will have a significant effect on the stability and potential growth of our income from leasing automobiles in the next twelve months. The effective management, including maintaining the high turn-over rate of our automobiles through our proprietary system and experienced auto-management team could provide in-time delivery and qualified automobiles to potential lessees, either for personal use or providing online ride-hailing services. As of December 31, 2025, for parking and management of automobiles for operating lease, we had one parking lot and three employees in Changsha. During the three months ended December 31, 2025 and 2024, the average utilization of the automobiles for operating lease was approximately 85.7% and 91.4%, respectively. During the nine months ended December 31, 2025 and 2024, the average utilization of the automobiles for operating lease was approximately 92.2% and 92.3%, respectively.
Our Service Offerings and Pricing
The growth of our revenue depends on our ability to improve existing solutions and services provided, continue identifying evolving business needs, refine our collaborations with business partners and provide value-added services to our customers. The attraction of new automobile leases depends on our leasing solutions with attractive rental price and flexible leasing terms. We have also adopted a series of pricing formulas to adopt the market changes, considering the historical and future expenditure, remaining available leasing months and market price to determine our rental price for varied rental solutions. Furthermore, our product designs affect the type of automobile leases we attract, which in turn affect our financial performance. The attraction of new customers depends on the comprehensive income they could earn from our own or Partner Platforms, which is mainly affected by the number of orders distributed to them through our platform and the amount of the incentives paid to them from platforms. Our revenue growth also depends on our abilities to effectively price our services, which enables us to attract more customers and improve our profit margin.
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Ability to Retain Key Business Cooperators
Historically, we have set up a series of strategy and business relationships with certain affiliates of some famous and leading companies of NEVs manufacturers, online ride-hailing platforms, local NEVs leasing companies, and travel service providers to develop our Automobile Transaction and Related Services. We earned commissions or services fees from them, purchased and leased automobiles for our business at a favorable price. The close relationships have provided us with the necessary capacity to support the development of our online ride-hailing platform and leasing business. To retain these valuable cooperators and continuously explore opportunities to collaborate with them in more areas is important to us to have considerable resources to support the exploration and expansion of our business into new cities.
Meanwhile, in order to strengthen our market position, Hunan Ruixi has built up cooperation relationships with Partner Platforms, such as Hunan Didi Technology Co., Ltd., whereby the online ride-hailing requests and orders shall be completed on Partner Platforms utilizing the network of cars and drivers of us while Hunan Ruixi earned rental income from drivers and earned commissions from Partner Platforms.
Ability to Collect Receivables on a Timely Basis
For receivables from Auto Operating Leasing, we usually settle the rental income with each online ride-hailing driver monthly based on the product solutions they chose. In accordance with the development of the operating lease business, our Partner Platforms, such as Gaode, agree to temporarily “lock-up” the fares of the rides which the driver earned from the platform to ensure the timely collection of our rental receivables from them. As of December 31, 2025, we had accounts receivable of operating lease of approximately $1,000 in total. Besides, during the three and nine months ended December 31, 2025, we settled our commissions with the Partner Platforms for our online ride-hailing platform services and automobile rental income on a monthly basis.
The efficiency of collection of the monthly and weekly payments has a material impact on our daily operation. Our risk and asset management department has set up a series of procedures to monitor the collection from drivers. Our business department has also set up a stable and close relationship with Partner Platforms to ensure the timely collection of commissions. The accounts receivable and advance payments may increase our liquidity risk. We have used the majority of the proceeds from our equity offerings and plan to seek equity and/or debt financings to pay for the expenditure related to the automobile purchase. To pay for the expenditure in advance will enhance the stability of our daily operation and lower the liquidity risk, and attract more customers.
Ability to Manage Defaults Effectively
We manage the credit risk arising from the default of automobile purchasers and lessees by performing credit checks on each automobile purchaser or lessee based on the credit reports from People’s Bank of China and third-party credit rating companies, and personal information including residence, ethnicity group, driving history and involvement in legal proceeding. Our risk department continuously monitors the payment by each purchaser and sends them payment reminders. We also keep monitoring the daily gross fare earned by the online ride-hailing drivers, who are our majority customers and run their business through our Partner Platforms during the three and nine months ended December 31, 2025. We do this so that we can evaluate their financial conditions and provide them with assistance including the transfer of automobile to a new driver if they are no longer interested in providing ride-hailing services or are unable to earn enough income to make monthly lease/loan payments. We also charge default expenses from customers for their behaviors violated to the contracts.
Further, the automobiles subject to our financing leases are not collateralized by us. As of December 31, 2025, the total value of non-collateralized automobiles was close to the amount of finance lease receivables since it was on a straight-line basis. We believe our risk exposure of financing leasing is immaterial as we have experienced limited default cases and we are able to re-lease those automobiles to drivers under financing leases.
Ability to Compete Effectively
Our business and results of operations depend on our ability to compete effectively. Overall, our competitive position may be affected by, among other things, our service quality and our ability to price our solutions and services competitively. We will set up and continuously optimize our own business system to improve our service quality and user experience. Our competitors may have more resources than we do, including financial, technological, marketing and others and may be able to devote greater resources to the development and promotion of their services. We will need to continue to introduce new or enhance existing solutions and services to continue to attract automobile dealers, financial institutions, car buyers, lessees, ride-hailing drivers and other industry participants. Whether and how quickly we can do so will have a significant impact on the growth of our business.
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Market Opportunity and Government Regulations in China
The demand for our services depends on overall market conditions of the online ride-hailing industry in China. The continuous growth of the urban population places increasing pressure on the urban transportation and the improvement of living standards has increased the market demand for quality travel in China. Traditional taxi service is limited, and the emerging online platforms have created good opportunities for the development of the online ride-hailing service market. The market value is expected to increase from RMB354.7 billion in 2024 to RMB751.3 billion in 2028, owing to rising consumer demand for economical mobility options and an amplified penetration of shared mobility services, especially in lower-tier cities. According to the 56th Statistical report on Internet Development in China published in July 2025 by the China Internet Network Information Center (the “CNNIC”), the number of online ride-hailing service users had reached 511 million by the end of June 2025, and took approximately 45.6% of the total number of Chinese internet users. In addition, in recent years, aggregation platforms have gained rising significance in the shared mobility industry. According to Frost & Sullivan, the portion of ride hailing orders fulfilled through aggregation platforms increased from 3.5% in 2018 to 30.0% in 2023, and is expected to further increase to 49.0% by 2028. The online ride-hailing industry is also facing increasing competition in China and is attracting more capital investment. For example, Dida Inc. Chenqi Technology Limited and CaoCao Inc. were listed on the Hong Kong Stock Exchange in June 2024 and June 2025, respectively.
However, the participants in the online ride-hailing industry are facing increasingly fierce competitions. According to the Ministry of Transportation (the “MOT”) of the People’s Republic of China, as of December 31, 2025, approximately 395 online ride-hailing platforms have obtained booking taxi operating licenses, representing an increase of approximately 5% as compared with the one as of March 31, 2025. And the total volume of online ride-hailing orders was approximately 963 million in December 2025 in China, representing a decrease of approximately 28% as compared with the one as of October 31, 2024. Meanwhile, approximately 3.21 million online booking taxi transportation certificates and approximately 7.48 million online booking taxi driver’s licenses were issued nationwide in China as of December 31, 2024, respectively. Since 2023, the municipal transportation bureaus in a series of cities in China have released operational dynamics and risk warnings for the online ride-hailing industry, stating that the online ride-hailing market has become saturated. They remind enterprises and practitioners who intend to engage in online ride-hailing services should have a detailed understanding of relevant regulations, conduct market research, fully consider changes in operating income due to factors such as supply and demand, market conditions, fluctuations or continuous declines, objectively evaluate the actual income level of industry practitioners, and make rational and prudent career choices.
The online ride-hailing industry may also be affected by, among other factors, the general economic conditions in China. The interest rates and unemployment rates may affect the demand of ride-hailing services and automobile purchasers’ willingness to seek credit from financial institutions. Adverse economic conditions could also reduce the average income of individual and intensify the competition between platforms. Should any of those negative situations occur, the volume and value of the automobile transactions we service will decline, and our revenue and financial condition will be negatively impacted.
On November 5, 2016, the Municipal Communications Commission of Chengdu City and a number of municipal departments jointly issued the “Implementation Rules for the Administration of Online Booking Taxi Management Services for Chengdu”, which was abolished and replaced by the updated version issued on July 26, 2021. On August 10, 2017, the Transportation Commission of Chengdu further issued the guidelines on compliance requirements for online ride-hailing businesses, including Working Process for the Online Appointment of Taxi Drivers Qualification Examination and Issuance and Online Appointment Taxi Transportation Certificate Issuance Process. On November 28, 2016, Guangzhou Municipal People’s Government promulgated Interim Measures for the Management of Online Ride Hailing Operation and Service in Guangzhou, as amended on November 14, 2019. According to these regulations and guidelines, three licenses /certificates are required for operating the online ride-hailing business in Chengdu and Guangzhou: (1) the ride-hailing service platform should obtain the online booking taxi operating license; (2) the automobiles used for online ride-hailing should obtain the online booking taxi transportation certificate (“automobile certificate”); (3) the drivers should obtain the online booking taxi driver’s license (“driver’s license”). Besides, all the new cars used for online ride-hailing in Chengdu should be NEVs since July 2021.
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As of December 31, 2025, all ride-hailing drivers who leased our automobiles or used our services have obtained the driver’s license for online ride-hailing services, and all of the cars used for online ride-hailing services which we provided management services have the automobile certificate. Without requisite automobile certificate or driver’s license, these drivers may be suspended from providing ride-hailing services, confiscated their illegal income and subject to fines of up to 10 times of their illegal income. We assisted drivers to obtain the required certificate and license for our Automobile Transaction and Related Services. However, there was no guarantee that all of the drivers who run their online ride-hailing business would be able to obtain all the certificates and licenses. These Partner Platforms may not allow unqualified drivers who lease our automobiles to drive through these platforms, or reduce their commission income, so that they may not be able to earn enough income from those Partner Platforms to pay our rental fees. Our business and results of operations shall be materially and adversely affected if we could not serve qualified drivers or our served drivers are suspended from providing ride-hailing services.
The Chinese government has exercised and continued to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. For example, the Chinese cybersecurity regulator announced on July 2, 2021 that it had begun an investigation of Didi and two days later ordered that the company’s app be removed from smartphone app stores. We believe that our current operations are in compliance with the laws and regulations of the Chinese cybersecurity regulator. However, the Company’s operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to its business or industry.
Results of Continuing Operations for the three months ended December 31, 2025 Compared to the three months ended December 31, 2024
| For the Three Months Ended | ||||||||||||
| December 31, | ||||||||||||
| 2025 | 2024 | Change | ||||||||||
| (unaudited) | (unaudited) | |||||||||||
| Revenues | $ | 358,684 | $ | 451,447 | $ | (92,763 | ) | |||||
| Cost of revenues | (309,204 | ) | (345,518 | ) | 36,314 | |||||||
| Gross profit | 49,480 | 105,929 | (56,449 | ) | ||||||||
| Operating expenses | ||||||||||||
| Selling, general and administrative expenses | (651,157 | ) | (412,270 | ) | (238,887 | ) | ||||||
| Provision for credit losses | (244,908 | ) | (104,700 | ) | (140,208 | ) | ||||||
| Stock-based compensation | (250,000 | ) | — | (250,000 | ) | |||||||
| Total operating expenses | (1,146,065 | ) | (516,970 | ) | (629,095 | ) | ||||||
| Loss from operations | (1,096,585 | ) | (411,041 | ) | (685,544 | ) | ||||||
| Other income, net | 230,697 | 32,232 | 198,465 | |||||||||
| Change in fair value of derivative liabilities | 813,405 | 121,314 | 692,091 | |||||||||
| Excess of warrant fair value over offering proceeds | (2,896,455 | ) | — | (2,896,455 | ) | |||||||
| Loss before income taxes expense | (2,948,938 | ) | (257,495 | ) | (2,691,443 | ) | ||||||
| Income tax expense | — | — | — | |||||||||
| Net loss from continuing operations | $ | (2,948,938 | ) | $ | (257,495 | ) | $ | (2,691,443 | ) | |||
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Revenues
We started generating revenue from Automobile Transaction and Related Services from our acquisition of Hunan Ruixi on November 22, 2018. As we focus on our automobile rental business, we expect revenue from our automobile rental to continuously account for a majority of our revenues. We provide a series of product solutions to sustain and further increase the number of our automobiles for operating leases.
The following table sets forth the breakdown of revenues by revenue source for the three months ended December 31, 2025 and 2024, respectively:
| For the Three Months Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| (unaudited) | (unaudited) | |||||||
| Revenue from automobile transactions and related services | ||||||||
| - Operating lease revenues from automobile rentals | $ | 317,153 | $ | 409,731 | ||||
| - Financing revenues | 15,117 | 23,668 | ||||||
| - Service fees from NEVs leasing | 14,799 | — | ||||||
| - Default revenue | 5,831 | 7,711 | ||||||
| - Monthly services commissions | 3,427 | 3,828 | ||||||
| - Service fees from automobile purchase services | — | 2,959 | ||||||
| - Other service fees | 2,357 | 3,550 | ||||||
| Total Revenue | $ | 358,684 | $ | 451,447 | ||||
Revenue from our automobile transaction and related services mainly includes operating lease revenues from automobile rentals, financing revenues, service fees from NEVs leasing, default revenue, monthly services commissions, and other services fees, which accounted for approximately 88.4%, 4.2%, 4.1%, 1.6%, 1.0% and 0.7%, respectively, of the total revenue during the three months ended December 31, 2025. Meanwhile, operating lease revenues from automobile rentals, financing revenues, default revenue, monthly services commissions, service fees from automobile purchase services and other services fees, which accounted for approximately 90.8%, 5.2%, 1.7%, 0.8%, 0.7% and 0.8%, respectively, of the total revenue during the three months ended December 31, 2024.
Operating lease revenues from automobile rentals
We generate revenues from leasing our own automobiles by online ride-hailing drivers with their authorization for a lease term of no more than twelve months. The decrease in rental income of $92,578 or approximately 22.6% during the three months ended December 31, 2025 was mainly due to the decrease in the number and average monthly rental of automobiles leased for operating lease. We leased over 322 automobiles with an average monthly rental income of approximately $319 per automobile, resulting in a rental income of $317,153 for the three months ended December 31, 2025. We leased approximately 346 automobiles with an average monthly rental income of approximately $394 per automobile, resulting in a rental income of $409,731 for the three months ended December 31, 2024.
Financing revenues
We started our financial leasing business in March 2019 and began to generate interest income from providing financial leasing services to ride-hailing drivers in April 2019. We also charge the customers of our automobile financing facilitation services interest on their monthly payments which cover purchase price of automobile and our services fees and facilitation fees for terms of 36 or 48 months. We recognized a total interest income of $15,117 from an average monthly number of 44 automobiles and $23,668 from an average monthly number of 49 automobiles during the three months ended December 31, 2025 and 2024, respectively. The decrease was due to the number and monthly payment we charged to customers decreased during the three months ended December 31, 2025.
Service fees from NEVs leasing
We generated revenues of $14,799 and $0 from leasing NEVs by charging leases service fees during the three months ended December 31, 2025 and 2024, respectively. The amount of services fees for NEVs leasing were based on our timely product solutions in accordance which adjusted with different market conditions.
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Default revenue
We generated default revenues of $5,831 and $7,711 from the automobile lessee’s early-termination of the contracts or other violation behaviors to the contracts during the three months ended December 31, 2025 and 2024, respectively. The decrease was primarily attributable to a lower incidence of early-terminations and contractual breaches by the automobile lessees, driven by improved credit quality of our lessee base, enhanced risk management and contract monitoring practices during the three months ended December 31, 2025.
Monthly services commissions
We generated revenues of $3,427 and $3,828 from the monthly management and related services provided to our Partner Platforms and other companies during the three months ended December 31, 2025 and 2024, respectively. The decrease was due to the decrease in the number of automobiles leased to online ride-hailing drivers for operating lease during the three months ended December 31, 2025, which in turn led to lower commission income from the Partner Platforms related to the monthly management and related services.
Service fees from automobile purchase services and Other Service fees
We generated revenues of $0 from the automobile purchase services during the three months ended December 31, 2025, and of $2,959 for two automobiles purchase transactions from the automobile purchase services during the three months ended December 31, 2024.
We generate other revenues from other miscellaneous service fees charged to our customers during the three months ended December 31, 2025 and 2024. Other services fees mainly include the maintenance fees charged to our customers pursuant to certain new production solutions.
Cost of Revenues
Cost of revenues represents depreciation and rental cost of automobiles, daily maintenance and insurance expense of automobiles which related to our Auto Operating Leasing. Cost of revenues decreased by $36,314 or approximately 10.5% during the three months ended December 31, 2025 as compared with the three months ended December 31, 2024, mainly due to the decrease in the number of the automobiles leased for operating lease from 346 in the three months ended December 31, 2024 to 322 in the three months ended December 31, 2025.
Gross Profit
We had gross profit of $49,480 and $105,929, respectively, during the three months ended December 31, 2025 and 2024. The decrease of $56,449 was mainly due to the decrease in gross profit from Auto Operating Leasing. The following table sets forth the breakdown of gross profit by major revenue source for the three months ended December 31, 2025 and 2024:
| For the Three Months Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| (unaudited) | (unaudited) | |||||||
| - Auto Operating Leasing | $ | 7,949 | $ | 64,213 | ||||
| - Other Automobile transaction and related Services | 41,531 | 41,716 | ||||||
| Total Gross Profit | $ | 49,480 | $ | 105,929 | ||||
We had a gross profit of $7,949 from our Auto Operating Leasing during the three months ended December 31, 2025, which decreased by $56,264 from a gross loss of $64,213 in the three months ended December 31, 2024. The decrease was attributable to the average monthly rental of automobiles leased for operating lease decreased from 394 in the three months ended December 31, 2024 to 319 in the three months ended December 31, 2025. As the gross margin of the revenues from our operating leasing decreased during the three months ended December 31, 2025, our overall gross profit margin decreased to approximately 13.8% from approximately 23.5% during the three months ended December 31, 2024.
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Selling, General and Administrative Expenses
Selling, general and administrative expenses primarily consist of salary and employee benefits, office rental expense, travel expenses, and other expenses. Selling, general and administrative expenses increased from $412,270 for the three months ended December 31, 2024 to $651,157 for the three months ended December 31, 2025, representing an increase of $238,887, or approximately 57.9%. The increase was mainly due to the increase of $227,060 in professional service fees such as financial, market consulting for our financing transactions during the three months ended December 31, 2025.
Provision for credit losses
We re-evaluated the possibility of collection of unsettled balances from customers/suppliers of our automobile transactions and related services, and we provided provision for credit losses of $244,908 and $104,700 against receivables from Jinkailong for the three months ended December 31, 2025 and 2024, respectively.
Stock-based compensation
In November 2025, we entered into a consulting services agreement (the “Consulting Agreement”) with a consultant (“the Consultant”), pursuant to which we engaged the Consultant to provide consulting services. We issued an aggregate of 200,000 shares of our common stock in November 2025 at $1.25 per share to settle the compensation for the services. We did not have similar transaction during the three months ended December 31, 2024.
Other income, net
For the three months ended December 31, 2025, we had other income, net of $230,697, which primarily consist of the (1) a gain of $213,000 from historical debt forgiveness by service providers and the company’s former directors; (2) penalty income of approximately $17,000 from the customers; and (3) the miscellaneous other income, net of approximately $13,000 which offset by $12,575 of offering costs allocable to the derivative liabilities for our pre-funded warrant and private placement warrant upon closing.
For the three months ended December 31, 2024, we had other income, net of $32,232, which primarily consist of (1) penalty income of approximately $20,000 from the customers; and (2) the miscellaneous income, net of approximately $12,000.
Change in Fair Value of Derivative Liabilities
Warrants issued in our registered direct offerings that took place in February 2021, May 2021 and November 2025, and the August 2020 underwritten public offering, and the November 2021 and November 2025 private placement were classified as liabilities under the caption “Derivative Liabilities” in the unaudited condensed consolidated balance sheet and recorded at estimated fair value at each reporting date, computed using the Black-Scholes valuation model. The change in fair value of derivative liabilities for the three months ended December 31, 2025 and 2024 was a gain of $813,405 and $121,314, respectively. The following table sets forth the breakdown of the gain in fair value of derivative liabilities for the three months ended December 31, 2025 and 2024:
| For the Three Months Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| (unaudited) | (unaudited) | |||||||
| - August 2020 underwritten public offering | $ | — | $ | 1,630 | ||||
| - February 2021 registered direct offering | — | 2,077 | ||||||
| - May 2021 registered direct offering | 10 | 40,663 | ||||||
| - November 2021 private placement | 170 | 76,944 | ||||||
| - November 2025 Private placement | 767,975 | — | ||||||
| - November 2025 registered direct offering | 45,250 | — | ||||||
| Total Change in Fair Value of Derivative Liabilities | $ | 813,405 | $ | 121,314 | ||||
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Excess of warrant fair value over offering proceeds
In November 2025, we issued common shares, pre-funded warrants and the concurrent private placement warrants, generating aggregate gross proceeds of $2,841,300. We concluded that these warrants qualify as liability instruments. At the issuance date in November 2025, the fair value of the warrants was estimated at $5,737,755 using the Black-Scholes valuation model, and $2,896,455 excess of the warrants’ fair value over the total offering proceeds was recognized as a loss in the unaudited condensed consolidated statements of operations and comprehensive loss.
Income Tax Expense
Generally, our subsidiary Hunan Ruixi and Senmiao HK are subject to enterprise income tax on its taxable income in China at a rate of 25% and in Hong Kong, China at a rate of 8.25%, respectively. The enterprise income tax is calculated based on the entity’s global income as determined under PRC tax laws and accounting standards. All the subsidiaries suffered losses and no tax expense was recorded for the three months ended December 31, 2025 and 2024.
Net loss from continuing operations
As a result of the foregoing, net loss from continuing operations for the three months ended December 31, 2025 was $2,948,938, representing an increase of $2,691,443 from net loss of $257,495 for the three months ended December 31, 2024.
Results of Continuing Operations for the nine months ended December 31, 2025 Compared to the nine months ended December 31, 2024
| For the Nine Months Ended | ||||||||||||
| December 31, | ||||||||||||
| 2025 | 2024 | Change | ||||||||||
| (unaudited) | (unaudited) | |||||||||||
| Revenues | $ | 1,219,628 | $ | 1,476,238 | $ | (256,610 | ) | |||||
| Cost of revenues | (994,987 | ) | (1,020,326 | ) | 25,339 | |||||||
| Gross profit | 224,641 | 455,912 | (231,271 | ) | ||||||||
| Operating expenses | ||||||||||||
| Selling, general and administrative expenses | (1,703,676 | ) | (1,420,370 | ) | (283,306 | ) | ||||||
| Provision for credit losses | (427,764 | ) | (199,365 | ) | (228,399 | ) | ||||||
| Stock-based compensation | (250,000 | ) | — | (250,000 | ) | |||||||
| Total operating expenses | (2,381,440 | ) | (1,619,735 | ) | (761,705 | ) | ||||||
| Loss from operations | (2,156,799 | ) | (1,163,823 | ) | (992,976 | ) | ||||||
| Other income, net | 292,493 | 65,737 | 226,756 | |||||||||
| Change in fair value of derivative liabilities | 893,714 | 105,900 | 787,814 | |||||||||
| Excess of warrant fair value over offering proceeds | (2,896,455 | ) | — | (2,896,455 | ) | |||||||
| Loss before income taxes expense | (3,867,047 | ) | (992,186 | ) | (2,874,861 | ) | ||||||
| Income tax expense | — | — | — | |||||||||
| Net loss from continuing operations | $ | (3,867,047 | ) | $ | (992,186 | ) | $ | (2,874,861 | ) | |||
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Revenues
We started generating revenue from Automobile Transaction and Related Services from our acquisition of Hunan Ruixi on November 22, 2018. As we focus on our automobile rental business, we expect revenue from our automobile rental to continuously account for a majority of our revenues. We provide a series of product solutions to sustain and further increase the number of our automobiles for operating leases.
The following table sets forth the breakdown of revenues by revenue source for the nine months ended December 31, 2025 and 2024, respectively:
| For the Nine Months Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| (unaudited) | (unaudited) | |||||||
| Revenue from automobile transactions and related services | ||||||||
| - Operating lease revenues from automobile rentals | $ | 1,076,175 | $ | 1,312,582 | ||||
| - Financing revenues | 56,297 | 72,697 | ||||||
| - Service fees from NEVs leasing | 33,341 | — | ||||||
| - Default revenue | 23,320 | 27,294 | ||||||
| - Monthly services commissions | 14,422 | 16,353 | ||||||
| - Service fees from automobile purchase services | 8,936 | 29,862 | ||||||
| - Other service fees | 7,137 | 17,450 | ||||||
| Total Revenue | $ | 1,219,628 | $ | 1,476,238 | ||||
Revenue from our automobile transaction and related services mainly includes operating lease revenues from automobile rentals, financing revenues, service fees from NEVs leasing, default revenue, monthly services commissions, service fees from automobile purchase services, and other services fees, which accounted for approximately 88.2%, 4.6%, 2.7%, 1.9%, 1.2%, 0.7% and 0.7%, respectively, of the total revenue during the nine months ended December 31, 2025. Meanwhile, operating lease revenues from automobile rentals, financing revenues, default revenue, monthly services commissions, service fees from automobile purchase services, and other services fees, which accounted for approximately 88.9%, 4.9%, 1.8%, 1.1%, 2.0% and 1.3%, respectively, of the total revenue during the nine months ended December 31, 2024.
Operating lease revenues from automobile rentals
We generate revenues from leasing our own automobiles by online ride-hailing drivers with their authorization for a lease term of no more than twelve months. The decrease in rental income of $236,407 or approximately 18.0% during the nine months ended December 31, 2025 was mainly due to the decrease in the number and average monthly rental of automobiles leased for operating lease. We leased approximately 340 automobiles with an average monthly rental income of approximately $359 per automobile, resulting in a rental income of $1,076,175 for the nine months ended December 31, 2025. While we approximately 367 automobiles with an average monthly rental income of approximately $414 per automobile, resulting in a rental income of $1,312,582 for the nine months ended December 31, 2024.
Financing revenues
We started our financial leasing business in March 2019 and began to generate interest income from providing financial leasing services to ride-hailing drivers in April 2019. We also charge the customers of our automobile financing facilitation services interest on their monthly payments which cover purchase price of automobile and our services fees and facilitation fees for terms of 36 or 48 months. We recognized a total interest income of $56,297 from an average monthly number of 48 automobiles and $72,697 from an average monthly number of 45 automobiles during the nine months ended December 31, 2025 and 2024, respectively. The decrease was due to the monthly payment we charged to customers decreased during the nine months ended December 31, 2025.
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Service fees from NEVs leasing
We generated revenues of $33,341 and $0 from leasing NEVs by charging leases service fees during the nine months ended December 31, 2025 and 2024, respectively. The amount of services fees for NEVs leasing were based on our timely product solutions in accordance which adjusted with different market conditions.
Default revenue
We generated default revenues of $23,320 and $27,294 from the automobile lessee’s early-termination of the contracts or other violation behaviors to the contracts during the nine months ended December 31, 2025 and 2024, respectively. The decrease was primarily attributable to a lower incidence of early-terminations and contractual breaches by the automobile lessees, driven by improved credit quality of our lessee base, enhanced risk management and contract monitoring practices during the nine months ended December 31, 2025.
Monthly services commissions
We generated revenues of $14,422 and $16,353 from the monthly management and related services provided to our Partner Platforms and other companies during the nine months ended December 31, 2025 and 2024, respectively. The decrease was due to the decrease in the number of automobiles leased to online ride-hailing drivers for operating lease during the nine months ended December 31, 2025, which in turn led to lower commission income from the Partner Platforms related to the monthly management and related services.
Service fees from automobile purchase services and Other Service fees
We generated revenues of $8,936 and $29,862 from the automobile purchase services during the nine months ended December 31, 2025 and 2024, respectively. The decrease was due to the number of automobiles purchase transactions decreased to 7 during the nine months ended December 31, 2025 from 21 in the same period in 2024.
We generate other revenues from other miscellaneous service fees charged to our customers during the nine months ended December 31, 2025 and 2024. Other services fees mainly include the maintenance fees charged to our customers pursuant to certain new production solutions.
Cost of Revenues
Cost of revenues represents the depreciation and rental cost of automobiles, daily maintenance and insurance expense of automobiles which related to our Auto Operating Leasing. Cost of revenues decreased by $25,339 or approximately 2.5% during the nine months ended December 31, 2025 as compared with the nine months ended December 31, 2024, mainly due to the decrease in the number of the automobiles leased for operating lease from 367 in the nine months ended December 31, 2024 to 340 in the nine months ended December 31, 2025.
Gross Profit
We had gross profit of $224,641 and $455,912, respectively, during the nine months ended December 31, 2025 and 2024. The following table sets forth the breakdown of gross profit by major revenue source for the nine months ended December 31, 2025 and 2024:
| For the Nine Months Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| (unaudited) | (unaudited) | |||||||
| - Auto Operating Leasing | $ | 81,188 | $ | 292,256 | ||||
| - Other Automobile transaction and related Services | 143,453 | 163,656 | ||||||
| Total Gross Profit | $ | 224,641 | $ | 455,912 | ||||
We had a gross profit of $81,188 from our Auto Operating Leasing during the nine months ended December 31, 2025, which decreased by $211,068 from a gross loss of $292,256 in the nine months ended December 31, 2024. The decrease was attributable to the average monthly rental of automobiles leased for operating lease decreased from 414 in the three months ended December 31, 2024 to 359 in the three months ended December 31, 2025. As the gross margin of the revenues from our operating leasing decreased during the three months ended December 31, 2025, our overall gross profit margin decreased to approximately 18.4% from approximately 30.9% during the three months ended December 31, 2024.
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Selling, General and Administrative Expenses
For the nine months ended December 31, 2025, selling, general and administrative expenses primarily consist of salary and employee benefits, office rental expense, travel expenses, and other expenses. Selling, general and administrative expenses increased from $1,420,370 for the nine months ended December 31, 2024 to $1,703,676 for the nine months ended December 31, 2025, representing an increase of $283,306, or approximately 19.9%. The increase was mainly due to (1) the increase of $347,273 in professional service fees such as financial, market consulting during the nine months ended December 31, 2025; and partly offset by (2) a decrease of $28,088 in salary and employee benefits as the average monthly number of our employees decreased from 26 for the nine months ended December 31, 2024 to 23 for the nine months ended December 31, 2025; and (3) a decrease of $30,907 in entertainment and travel expenses.
Provision for credit losses
We re-evaluated the possibility of collection of unsettled balances from customers/suppliers of our automobile transactions and related services, and we provided provision for credit losses of $427,764 and $199,365 against receivables from Jinkailong for the nine months ended December 31, 2025 and 2024, respectively.
Stock-based compensation
In November 2025, we entered into the Consulting Agreement with the Consultant, pursuant to which we engaged the Consultant to provide consulting services. We issued an aggregate of 200,000 shares of our common stock in November 2025 at $1.25 per share to settle the compensation for the services. We did not have similar transaction during the nine months ended December 31, 2024.
Other income, net
For the nine months ended December 31, 2025, we had other income, net of $292,493, which primarily consist of the (1) a gain of $213,000 from historical debt forgiveness by service providers and the company’s former directors; (2) penalty income of approximately $52,000 from the customers; and (3) the miscellaneous other income, net of approximately $40,000 which offset by $12,575 of offering costs allocable to the derivative liabilities for our pre-funded warrant and private placement warrant upon closing.
For the nine months ended December 31, 2024, we had other income, net of $65,737, which primarily consist of (1) the penalty income of approximately $80,000 from the customers; partially offset by (2) the expense of approximately $20,000 from the termination of our right-of-use assets for an exhibition hall we leased in Changsha, and (5) the miscellaneous income, net of approximately $6,000.
Change in Fair Value of Derivative Liabilities
Warrants issued in our registered direct offerings that took place in February 2021, May 2021 and November 2025, and the August 2020 underwritten public offering, and the November 2021 and November 2025 private placement were classified as liabilities under the caption “Derivative Liabilities” in the unaudited condensed consolidated balance sheet and recorded at estimated fair value at each reporting date, computed using the Black-Scholes valuation model. The change in fair value of derivative liabilities for the nine months ended December 31, 2025 and 2024 was a gain of $893,714 and $105,900, respectively. The following table sets forth the breakdown of the gain in fair value of derivative liabilities for the nine months ended December 31, 2025 and 2024:
| For the Nine Months Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| (unaudited) | (unaudited) | |||||||
| - August 2020 underwritten public offering | $ | 21 | $ | 2,654 | ||||
| - February 2021 registered direct offering | 219 | 3,125 | ||||||
| - May 2021 registered direct offering | 13,785 | 45,085 | ||||||
| - November 2021 private placement | 66,464 | 55,036 | ||||||
| - November 2025 Private placement | 767,975 | — | ||||||
| - November 2025 registered direct offering | 45,250 | — | ||||||
| Total Change in Fair Value of Derivative Liabilities | $ | 893,714 | $ | 105,900 | ||||
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Excess of warrant fair value over offering proceeds
In November 2025, we issued common shares, pre-funded warrants and the concurrent private placement warrants, generating aggregate gross proceeds of $2,841,300. We concluded that these warrants qualify as liability instruments. At the issuance date in November 2025, the fair value of the warrants was estimated at $5,737,755 using the Black-Scholes valuation model, and $2,896,455 excess of the warrants’ fair value over the total offering proceeds was recognized as a loss in the unaudited condensed consolidated statements of operations and comprehensive loss.
Income Tax Expense
Generally, our subsidiary Hunan Ruixi and Senmiao HK are subject to enterprise income tax on its taxable income in China at a rate of 25% and in Hong Kong, China at a rate of 8.25%, respectively. The enterprise income tax is calculated based on the entity’s global income as determined under PRC tax laws and accounting standards. All the subsidiaries suffered losses and no tax expense was recorded for the nine months ended December 31, 2025 and 2024.
Net loss from continuing operations
As a result of the foregoing, net loss from continuing operations for the nine months ended December 31, 2025 was $3,867,047, representing an increase of $2,874,861 from net loss of $992,186 for the nine months ended December 31, 2024.
Results of Discontinued Operations for the three months ended December 31, 2025 Compared to the three months ended December 31, 2024
| For the Three Months Ended | ||||||||||||
| December 31, | ||||||||||||
| 2025 | 2024 | Change | ||||||||||
| (unaudited) | (unaudited) | |||||||||||
| Revenues | $ | 411,374 | $ | 468,389 | $ | (57,015 | ) | |||||
| Cost of revenues | (280,098 | ) | (397,931 | ) | 117,833 | |||||||
| Gross profit | 131,276 | 70,458 | 60,818 | |||||||||
| Operating expenses | ||||||||||||
| Selling, general and administrative expenses | (265,090 | ) | (103,096 | ) | (161,994 | ) | ||||||
| Provision for credit losses | (311,752 | ) | (262,545 | ) | (49,207 | ) | ||||||
| Total operating expenses | (576,842 | ) | (365,641 | ) | (211,201 | ) | ||||||
| Loss from operations | (445,566 | ) | (295,183 | ) | (150,383 | ) | ||||||
| Other expenses, net | (1,744 | ) | (27,335 | ) | 25,591 | |||||||
| Interest expense on finance leases | — | (3,365 | ) | 3,365 | ||||||||
| Loss before income taxes expense | (447,310 | ) | (325,883 | ) | (121,427 | ) | ||||||
| Gain on disposal of discontinued operations | 426,766 | — | 426,766 | |||||||||
| Income tax expense | — | — | — | |||||||||
| Net loss from discontinued operations | $ | (20,544 | ) | $ | (325,883 | ) | $ | 305,339 | ||||
The result of discontinued operations was the financial figures of our former subsidiaries in Sichuan. As of December 31, 2025, we deconsolidated former subsidiaries in Sichuan and its business result was included in our automobile transactions and related services before we deconsolidated its financial figures.
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Revenues
The following table sets forth the breakdown of revenues by revenue source for the three months ended December 31, 2025 and 2024:
| For the Three Months Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| (unaudited) | (unaudited) | |||||||
| Revenue from automobile transactions and related services (discontinued operations) | ||||||||
| - Operating lease revenues from automobile rentals | $ | 327,223 | $ | 337,523 | ||||
| - Service fees from NEVs leasing | 47,758 | 68,606 | ||||||
| - Monthly services commissions | 16,300 | 39,927 | ||||||
| - Default revenue | 16,159 | 18,675 | ||||||
| - Other service fees | 3,934 | 3,658 | ||||||
| Total Revenue from discontinued operations | $ | 411,374 | $ | 468,389 | ||||
Revenue from automobile transactions and related services (discontinued operations)
Revenue from automobile transaction and related services (discontinued operations) mainly included operating lease revenues from automobile rentals, service fees from NEVs leasing, monthly services commissions, default revenue and other services fees, which accounted for approximately 79.5%, 11.6%, 4.0%, 3.9% and 1.0%, respectively, of the total revenue from discontinued operations during the three months ended December 31, 2025. Meanwhile, operating lease revenues from automobile rentals, service fees from NEVs leasing, monthly services commissions, default revenue, and other services fees, which accounted for approximately 72.1%, 14.6%, 8.5%, 4.0% and 0.8%, respectively, of the total revenue from discontinued operations during the three months ended December 31, 2024.
Operating lease revenues from automobile rentals
Our former subsidiaries in Sichuan generated revenues from leasing sub-leasing automobiles leased from third-parties and related parties or rendered by online ride-hailing drivers with their authorization for a lease term of no more than twelve months. Our former subsidiaries in Sichuan leased over 370 automobiles with an average monthly rental income of approximately $356 per automobile, resulting in a rental income of $327,223, including rental income of $25,304 from two related parties, for the three months ended December 31, 2025. Our former subsidiaries in Sichuan leased approximately 316 automobiles with an average monthly rental income of approximately $325 per automobile, resulting in a rental income of $337,523, including rental income of $2,882 from a related party, for the three months ended December 31, 2024.
Service fees from NEVs leasing
Our former subsidiaries in Sichuan generated revenues of $47,758 and $68,606 from leasing NEVs by charging leases service fees during the three months ended December 31, 2025 and 2024, respectively. The amount of services fees for NEVs leasing were based on our timely product solutions in accordance which adjusted with different market conditions.
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Monthly services commissions
Our former subsidiaries in Sichuan generated revenues of $16,300 and $39,927 from the monthly management and related services provided to our Partner Platforms during the three months ended December 31, 2025 and 2024, respectively.
Default revenue
Our former subsidiaries in Sichuan generated default revenues of $16,159 and $18,675 from the automobile lessee’s early-termination of the contracts or other violation behaviors to the contracts during the three months ended December 31, 2025 and 2024, respectively.
Other Service fees
Our former subsidiaries in Sichuan generated other revenues from other miscellaneous service fees charged to our customers during the three months ended December 31, 2025 and 2024. Other services fees mainly include the maintenance fees charged to our customers pursuant to certain new production solutions.
Cost of Revenues
During the three months ended December 31, 2025 and 2024, cost of revenues from discontinued operations of $280,098 and $397,931, respectively, represented the amortization of ROUs, rental cost of automobiles, daily maintenance and insurance expense of automobiles which related to Auto Operating Leasing. The decrease was mainly due to a decrease in the monthly rental costs of the automobiles leased for operating lease from $409 in the three months ended December 31, 2024 to $288 in the three months ended December 31, 2025. During the three months ended December 31, 2025 and 2024, our former subsidiaries in Sichuan paid $20,056 and $44,479, respectively, to related parties for costs of automobiles under operating leases.
Selling, General and Administrative Expenses
For the three months ended December 31, 2025, selling, general and administrative expenses from discontinued operations related to Auto Operating Leasing, which amounted to $265,090, primarily consisted of (1) $165,284 in outsourced operating services related to automobile lease, mainly attributable to the streamlining of the workforce in Chengdu, thereby sharing venue and personnel resources with Jinkailong, which resulted the corresponding service fee obligations; (2) $61,753 in salary and employee benefits; (3) $21,749 in entertainment, advertising and promotion; and (4) other miscellaneous expenses.
For the three months ended December 31, 2024, selling, general and administrative expenses from discontinued operations related to Auto Operating Leasing, which amounted to $103,096, primarily consisted of (1) $76,949 in salary and employee benefits; (2) $15,846 in entertainment, advertising and promotion; and (3) other miscellaneous expenses.
Provision for credit losses
Our former subsidiaries in Sichuan provided provision for credit losses of $311,752 and $262,545 against receivables from Jinkailong for the three months ended December 31, 2025 and 2024, respectively.
Other expenses, net
For the three months ended December 31, 2025 and 2024, our former subsidiaries in Sichuan had other expenses, net of $1,744 and $27,335, respectively, which primarily due to the miscellaneous expenses in its daily operations.
Interest Expense on Finance Leases
Interest expense on finance leases from discontinued operations for the three months ended December 31, 2025 and 2024 was $0 and $3,365, respectively, representing the interest expense accrued under financing leases for the leased automobiles Corenel leased from a third-party company, and the leased automobiles rendered to us for sublease or sale by the online ride-hailing drivers who exited the ride-hailing business.
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Gain on disposal of discontinued operations
As fully described above, we had a gain of $426,766 from disposal of our former subsidiaries in Sichuan during the three months ended December 31, 2025.
Income Tax expense
Our former subsidiaries in Sichuan are subject to enterprise income tax on its taxable income in China at a rate of 25%. All of our former subsidiaries in Sichuan suffered losses and no tax expense was recorded for the three months ended December 31, 2025 and 2024.
Net loss from discontinued operations
As a result of the foregoing, the net loss from discontinued operations for the three months ended December 31, 2025 and 2024 was $20,544 and $325,883, respectively.
Results of Discontinued Operations for the nine months ended December 31, 2025 Compared to the nine months ended December 31, 2024
| For the Nine Months Ended | ||||||||||||
| December 31, | ||||||||||||
| 2025 | 2024 | Change | ||||||||||
| (unaudited) | (unaudited) | |||||||||||
| Revenues | $ | 1,346,873 | $ | 1,412,728 | $ | (65,855 | ) | |||||
| Cost of revenues | (919,715 | ) | (1,245,168 | ) | 325,453 | |||||||
| Gross profit | 427,158 | 167,560 | 259,598 | |||||||||
| Operating expenses | ||||||||||||
| Selling, general and administrative expenses | (928,071 | ) | (646,082 | ) | (281,989 | ) | ||||||
| Provision for credit losses | (253,942 | ) | (696,594 | ) | 442,652 | |||||||
| Total operating expenses | (1,182,013 | ) | (1,342,676 | ) | 160,663 | |||||||
| Loss from operations | (754,855 | ) | (1,175,116 | ) | 420,261 | |||||||
| Other income, net | 226,101 | 14,463 | 211,638 | |||||||||
| Interest expense | — | (8,372 | ) | 8,372 | ||||||||
| Interest expense on finance leases | (615 | ) | (12,723 | ) | 12,108 | |||||||
| Loss before income taxes expense | (529,369 | ) | (1,181,748 | ) | 652,379 | |||||||
| Gain on disposal of discontinued operations | 426,766 | 397,775 | 28,991 | |||||||||
| Income tax Benefit | — | 4,510 | (4,510 | ) | ||||||||
| Net loss from continuing operations | $ | (102,603 | ) | $ | (779,463 | ) | $ | 676,860 | ||||
The result of discontinued operations was the financial figures of our former subsidiary, XXTX and former subsidiaries in Sichuan. As of December 31, 2025, we deconsolidated former subsidiaries in Sichuan and its business result was included in our automobile transactions and related services before we deconsolidated its financial figures. As of August 20, 2024, we deconsolidated XXTX and its business result was included in our online ride-hailing platform services before we deconsolidated its financial figures.
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Revenues
The following table sets forth the breakdown of revenues by revenue source for nine months ended December 31, 2025 and 2024:
| For the Nine Months Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| (unaudited) | (unaudited) | |||||||
| Revenue from automobile transactions and related services (discontinued operations) | ||||||||
| - Operating lease revenues from automobile rentals | $ | 1,011,119 | $ | 775,405 | ||||
| - Service fees from NEVs leasing | 223,775 | 142,751 | ||||||
| - Monthly services commissions | 65,188 | 84,337 | ||||||
| - Default revenue | 30,190 | 46,786 | ||||||
| - Other service fees | 16,601 | 19,208 | ||||||
| Total revenue from automobile transactions and related services (discontinued operations) | 1,346,873 | 1,068,487 | ||||||
| Revenue from online ride-hailing platform services (discontinued operations) | — | 344,241 | ||||||
| Total Revenue from discontinued operations | $ | 1,346,873 | $ | 1,412,728 | ||||
Revenue from automobile transactions and related services (discontinued operations)
Revenue from our automobile transaction and related services (discontinued operations) mainly includes operating lease revenues from automobile rentals, service fees from NEVs leasing, monthly services commissions, default revenue and other services fees, which accounted for approximately 75.1%, 16.6%, 4.8%, 2.2% and 1.3%, respectively, of the total revenue from discontinued operations during the nine months ended December 31, 2025. Meanwhile, operating lease revenues from automobile rentals, service fees from NEVs leasing, monthly services commissions, default revenue and other services fees, which accounted for approximately 72.6%,13.4%, 7.9%, 4.4% and 1.7%, respectively, of the total revenue from discontinued operations during the nine months ended December 31, 2024.
Operating lease revenues from automobile rentals
Our former subsidiaries in Sichuan generated revenues from leasing sub-leasing automobiles leased from third-parties and related parties or rendered by online ride-hailing drivers with their authorization for a lease term of no more than twelve months. Our former subsidiaries in Sichuan leased over 410 automobiles with an average monthly rental income of approximately $418 per automobile, resulting in a rental income of $1,011,119, including rental income of $79,203 from two related parties, for the nine months ended December 31, 2025. Our former subsidiaries in Sichuan leased approximately 337 automobiles with an average monthly rental income of approximately $361 per automobile, resulting in a rental income of $775,405, including rental income of $11,747 from a related party, for the nine months ended December 31, 2024.
Service fees from NEVs leasing
Our former subsidiaries in Sichuan generated revenues of $223,775 and $142,751 from leasing NEVs by charging leases service fees during the nine months ended December 31, 2025 and 2024, respectively. The amount of services fees for NEVs leasing were based on our timely product solutions in accordance which adjusted with different market conditions.
Monthly services commissions
Our former subsidiaries in Sichuan generated revenues of $65,188 and $84,337 from the monthly management and related services provided to Partner Platforms during the nine months ended December 31, 2025 and 2024, respectively.
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Default revenue
Our former subsidiaries in Sichuan generated default revenues of $30,190 and $46,786 from the automobile lessee’s early-termination of the contracts or other violation behaviors to the contracts during the nine months ended December 31, 2025 and 2024, respectively.
Other Service fees
Our former subsidiaries in Sichuan generate other revenues from other miscellaneous service fees charged to our customers during the nine months ended December 31, 2025 and 2024. Other services fees mainly include the maintenance fees charged to our customers pursuant to certain new production solutions.
Revenue from online ride-hailing platform services (discontinued operations)
XXTX generated revenue from providing services to online ride-hailing drivers to assist them in providing transportation service to the riders though Xixingtianxia platform and earned commissions for each completed order equal to the difference between an upfront quoted fare and the amount earned by a driver based on actual time and distance for the ride charged to the rider.
During the nine months ended December 31, 2024, approximately 0.6 million rides with gross fare of approximately $1.8 million were completed through our Xixingtianxia platform and an average of over 2,100 Active Drivers each month. XXTX earned online ride-hailing platform service fees of $344,241, after netting off approximately $32,000 incentives paid to Active Drivers.
Cost of Revenues
During the nine months ended December 31, 2025 and 2024, cost of revenues from discontinued operations of $919,715 and $998,143, respectively, represented the amortization of ROUs, rental cost of automobiles, daily maintenance and insurance expense of automobiles which related to Auto Operating Leasing. The decrease was mainly due to a decrease in the monthly rental costs of the automobiles leased for operating lease from $372 in the nine months ended December 31, 2024 to $310 in the nine months ended December 31, 2025. During the nine months ended December 31, 2025 and 2024, our former subsidiaries in Sichuan paid $110,328 and $63,440 to related parties for costs of automobiles under operating leases, respectively.
During the nine months ended December 31, 2024, cost of revenues from discontinued operations of $247,025 represented the technical service charges, insurance and other expenses which related to Online Ride-Hailing Platform Services.
Selling, General and Administrative Expenses
For the nine months ended December 31, 2025, selling, general and administrative expenses from discontinued operations related to Auto Operating Leasing, which amounted to $928,071, primarily consisted of (1) $616,586 in outsourced operating services related to automobile lease; (2) $183,298 in salary and employee benefits; (3) $86,660 in entertainment, advertising and promotion; and (4) other miscellaneous expenses.
For the nine months ended December 31, 2024, selling, general and administrative expenses from discontinued operations related to Auto Operating Leasing, which amounted to $479,145, primarily consisted of (1) $365,320 in salary and employee benefits; (2) $70,070 in entertainment, advertising and promotion; and (3) other miscellaneous expenses.
For the nine months ended December 31, 2024, selling, general and administrative expenses from discontinued operations related to Online Ride-Hailing Platform Services, which amounted to $166,937 primarily consisted of (1) $64,859 in salary and employee benefits; (2) $37,746 in depreciation of office equipment and amortization of intangible assets; (3) $32,187 in entertainment, advertising and promotion; and (4) other miscellaneous expenses.
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Provision for credit losses
For the three months ended December 31, 2025 and 2024, our former subsidiaries in Sichuan provided provision for credit losses of $253,942 and $523,316 against receivables from Jinkailong, respectively.
For the nine months ended December 31, 2024, XXTX provided provision for credit losses of $173,278 against receivables from a prepaid software development fee and a deposit due to the termination on the development which resulting from the discontinuing of the business.
Other income, net
For the nine months ended December 31, 2025, our former subsidiaries in Sichuan had other income, net of $226,101 which primarily due to deconsolidation of Corenel.
For the nine months ended December 31, 2024, our former subsidiaries in Sichuan and XXTX had other expense, net of $18,751 and other income, net of $33,214, respectively, which primarily due to the miscellaneous income and expense in the daily operations.
Interest Expense and Interest expense on finance leases
Interest expense from discontinued operations for the nine months ended December 31, 2024 was resulted from the borrowings of XXTX from a financial institution for its working capital turnover.
Interest expense on finance leases from discontinued operations for the nine months ended December 31, 2024 represented the interest expense accrued under financing leases for the leased automobiles Corenel leased from a third-party company, and the leased automobiles rendered to us for sublease or sale by the online ride-hailing drivers who exited the ride-hailing business.
Gain on disposal of discontinued operations
We had a gain of $426,766 from disposal of our former subsidiaries in Sichuan during the three months ended December 31, 2025, and $397,775 from disposal of XXTX during the three months ended December 31, 2024.
Income Tax Benefit
For the nine months ended December 31, 2024, XXTX had deferred tax benefit of $4,510, which resulted from recognition of deferred tax assets.
Net loss from discontinued operations
As a result of the foregoing, the net loss from discontinued operations for the nine months ended December 31, 2025 and 2024 was $102,603 and $779,463, respectively.
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Liquidity and Capital Resources
In assessing liquidity, we monitor and analyze our cash on-hand and our operating and capital expenditure commitments. Our liquidity needs are to meet its working capital requirements, operating expenses and capital expenditure obligations. Debt financing from financial institutions and equity financings have been utilized to finance our working capital requirements.
Our business is capital intensive, and certain factors show negative trends in our liquidity position, including (1) the net loss of approximately $4.0 million for the nine months ended December 31, 2025; (2) accumulated deficit of approximately $49.1 million as of December 31, 2025; (3) $0.8 million of net cash outflows in operating activities from continuing operations for the nine months ended December 31, 2025, and (4) the net working capital deficit of approximately $2.5 million as of December 31, 2025.
However, the Company’s liquidity position has been substantially improved by two financing transactions completed in November 2025. Specifically, the Company received net cash proceeds of approximately $0.66 million from issuance of common stock in PIPE Offering and $2.8 million from issuance of common stock and pre-funded warrants in registered direct offering. As a result, the Company’s cash and cash equivalents as of December 31, 2025 increased by approximately $2.8 million as compared with that of September 30, 2025.
Management evaluated the Company’s current liquidity and operating forecasts for the twelve months following the issuance of these unaudited condensed consolidated financial statements and has concluded that, as a result of the recent financing and improved cash flows, there was no substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issuance of unaudited condensed consolidated financial statements for the quarterly period ended December 31, 2025.
The following table summarizes our cash flows:
| For the Nine Months Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| (unaudited) | (unaudited) | |||||||
| Net Cash (Used in) Provided by Operating Activities | $ | (1,258,193 | ) | $ | 548,442 | |||
| Net Cash Used in Investing Activities | (223,759 | ) | (448,208 | ) | ||||
| Net Cash Provided by (Used in) Financing Activities | 4,059,719 | (17,528 | ) | |||||
| Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash | 134,484 | 71,882 | ||||||
| Cash, Cash Equivalents and Restricted Cash at Beginning of the Period | 833,577 | 794,636 | ||||||
| Cash, Cash equivalents and Restricted Cash, end of Period | 3,545,828 | 949,224 | ||||||
| Less: Cash, Cash equivalents and Restricted Cash from discontinued operations | (37,602 | ) | (95,503 | ) | ||||
| Cash and Cash equivalents from continuing operations, end of Period | $ | 3,508,226 | $ | 853,721 | ||||
Cash Flow in Operating Activities
For the nine months ended December 31, 2025, net cash used in operating activities was $1,258,193, which consisted of the net outflows of $793,096 from continuing operations and $465,097 from discontinued operations. While for the nine months ended December 31, 2024, net cash provided by operating activities was $548,442, which consisted of net cash inflows of $318,996 from continuing operations and $229,446 from discontinued operations.
The increase of $1,112,092 in net cash used in operating activities from continuing operations for the nine months ended December 31, 2025 as compared with the nine months ended December 31, 2024 was primarily attributable to (1) increase of $2,874,861 in net loss from continuing operations; (2) increase of $787,814 in the change in fair value of derivative liabilities; (3) decrease of $529,591 in the change of accrued expenses and other liabilities; (4) the gain of $212,581 from debt forgiveness by service providers and the company’s directors in the nine months ended December 31, 2025; (5) decrease of $105,043 in the change of accounts payable; and partially offset by (6) a loss of $2,896,455 arising from excess of the warrants’ fair value over the total offering proceeds from the November 2025 issuance of common shares, pre-funded warrants and concurrent private placement warrants; (7) $250,000 in stock-based compensation in the nine months ended December 31, 2025; (8) increase of $228,399 in the provision for credit losses.
Cash Flow in Investing Activities
For the nine months ended December 31, 2025, we had net cash used in investing activities of $223,759, which consisted of: (1) the loan to a related party of $229,469; partially offset by (2) the proceeds from sales of the used-automobiles of $5,710.
For the nine months ended December 31, 2024, we had net cash used in investing activities of $448,208, which consisted of the net inflows of $16,386 from continuing operations and net outflows of $464,594 from discontinued operations. The majority of net cash provided by investing activities from continuing operations was (1) the proceeds from sales of the used-automobiles of $16,804; partially offset by (2) the purchase furniture for office purpose of $418.
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Cash Flow in Financing Activities
For the nine months ended December 31, 2025, we had net cash provided by financing activities of $4,059,719, which consisted of the net inflows of $3,979,619 from continuing operations and net inflows of $80,100 from discontinued operations. The majority of net cash provided by financing activities from continuing operations consisted of: (1) net proceeds of $659,992 from the exercise of November 2021 Private Placement Warrants from an investor; (2) net proceeds of $341,251from issuance of common stock in PIPE Offering in November 2025; (3) net proceeds of $2,828,725 from issuance of common stock and pre-funded warrants in registered direct offering and concurrent private placement of warrants in November 2025; (4) borrowings from related parties of $277,165; partially offset by (5) repayments to a related party of $127,514.
For the nine months ended December 31, 2024, we had net cash used in financing activities of $17,528, which consisted net inflows of $79,872 from continuing operations and net outflows of $97,400 from discontinued operations. The majority of net cash provided by financing activities financing activities from continuing operations was borrowings from a related party.
Off-Balance Sheet Arrangements
As of the filing date of this Report, we have the following off-balance sheet arrangements that are likely to have a future effect on our financial condition, revenues or expenses, results of operations and liquidity:
| ● | Purchase Commitments |
As of the filing date of this Report, we have no purchase commitment.
| ● | Contingent Liabilities |
Pursuant to the Regulations of the State Council on Implementing the Management System for Registered Capital Registration in the Company Law of the People’s Republic of China issued on July 1, 2024 (the “Registered Capital Registration Implementing Rules”), as Jinkailong was registered and established before June 30, 2024, its shareholders should fully pay their unpaid subscribed capital before June 30, 2032. As of December 31, 2025, Hunan Ruixi holds 35% of equity interest of Jinkailong and has not made any payments towards the investment amounting to RMB3.5 million (approximately $500,000). According to the Registered Capital Registration Implementing Rules, Hunan Ruixi shall pay the subscribed capital of Jinkailong before June 30, 2032.
Inflation
We do not believe our business and operations have been materially affected by inflation.
Critical Accounting Estimates
Our unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with U.S. GAAP. The preparation of these unaudited condensed consolidated financial statements and accompanying notes requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree of judgment than others in their application. The management determined there were no critical accounting estimates.
When reading our unaudited condensed consolidated financial statements, you should consider our selection of critical accounting policies, the judgment and other uncertainties affecting the application of such policies and the sensitivity of reported results to changes in conditions and assumptions. Our critical accounting policies and practices include the following: (i) property and equipment, net; (ii) revenue recognition. See Note 3—Summary of Significant Accounting Policies to our consolidated financial statements in our 2025 Form 10-K for the disclosure of these accounting policies.
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Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Based on an evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended), as of December 31, 2025, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective due to the following material weaknesses in our internal control over financial reporting:
| ● | We did not have sufficient personnel with appropriate levels of accounting knowledge and experience to address complex U.S. GAAP accounting issues and to prepare and review financial statements and related disclosures under U.S. GAAP. Specifically, our control did not operate effectively to ensure the appropriate and timely analysis of and accounting for unusual and non-routine transactions and certain financial statement accounts; |
| ● | We are lacking adequate policies and procedures in internal audit function to ensure that our policies and procedures have been carried out as planned; and |
| ● | We had deficiencies in our IT general controls regarding to the Logical Access Security, Change Management, IT Operations and Cybersecurity of our financial system, etc. |
We are improving our IT environment and daily management to ensure network and information security. In addition, we plan to address the weaknesses identified above by implementing the following measures:
| (i) | Continuously hiring additional accounting staffs with comprehensive knowledge of U.S. GAAP and SEC reporting requirements; |
| (ii) | Setting up an internal audit function and continuously ameliorating our internal audit to assist with assessment of Sarbanes-Oxley compliance requirements and improvement of internal controls related to financial reporting; and |
| (iii) | improving our IT environment and daily management. |
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting that occurred during the quarter ended December 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 6. Exhibits.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Dated: June 30, 2026 | Senmiao Technology Limited | ||
| By: | /s/ Ronggang (Jonathan) Zhang | ||
| Name: | Ronggang (Jonathan) Zhang | ||
| Title: | Chief Executive Officer | ||
| (Principal Executive Officer) | |||
| Dated: June 30, 2026 | By: | /s/ Yafeng Li | |
| Name: | Yafeng Li | ||
| Title: | Chief Financial Officer | ||
| (Principal Financial Officer and Principal Accounting Officer) | |||
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