UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-38426

SENMIAO TECHNOLOGY LIMITED

(Exact name of registrant as specified in its charter)

Nevada

35-2600898

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

16F, Shihao Square, Middle Jiannan Blvd.,

High-Tech Zone Chengdu,

Sichuan, People’s Republic of China

610000

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: +86 28 61554399

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:		Trading Symbol		Name of each exchange on which registered:
Common Stock, par value $0.0001 per share		AIHS		The Nasdaq Stock Market LLC

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. Yes ☒ No ☐

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). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check One):

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	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 August 8, 2025, there were 1,108,312 shares of issuer’s common stock, par value $0.0001 per share, issued and outstanding.

TABLE OF CONTENTS

Cautionary Note Regarding Forward-Looking Statements		ii

PART I – FINANCIAL INFORMATION		1

Item 1.	Unaudited Condensed Consolidated Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	46
Item 4.	Controls and Procedures	46

PART II – OTHER INFORMATION		47
Item 6.	Exhibits	47

SIGNATURES		48

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (the “Report”), including, without limitation, statements under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “will,” “potential,” “projects,” “predicts,” “continues,” or “should,” or, in each case, their negative or other variations or comparable terminology. There can be no assurance that actual results will not materially differ from expectations. Such statements include, but are not limited to, any statements relating to our ability to consummate any acquisition or other business combination and any other statements that are not statements of current or historical facts. These statements are based on management’s current expectations, but actual results may differ materially due to various factors, including, but not limited to:

●

our goals and strategies, including our ability to maintain our automobile transaction and related services business in China;

●

our management’s ability to properly develop and achieve any future business growth and any improvements in our financial condition and results of operations;

●

the regulations and the impact by public health epidemics in China on the industries we operate in and our business, results of operations and financial condition;

●

the growth or lack of growth in China of disposable household income and the availability and cost of credit available to finance car purchases;

●

the growth or lack of growth of China’s online ride-hailing, automobile financing and leasing industries;

●

changes in online ride-hailing, transportation networks, and other fundamental changes in transportation pattern in China;

●

our expectations regarding demand for and market acceptance of our products and services;

●

our expectations regarding our customer base;

●

our ability to maintain positive relationships with our business partners;

●

competition in the online ride-hailing, automobile financing and leasing industries in China;

●

macro-economic and political conditions affecting the global economy generally and the market in China specifically; and

●

relevant Chinese government policies and regulations relating to the industries in which we operate.

You should read this Report and the documents that we refer to in this Report with the understanding that our actual future results may be materially different from and worse than what we expect. Other sections of this Report and our other reports filed with the Securities and Exchange Commission (the “SEC”) include additional factors which could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emerge from time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements.

You should not rely upon forward-looking statements as predictions of future events. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

This Report also contains statistical data and estimates that we obtained from industry publications and reports generated by third-parties. Although we have not independently verified the data, we believe that the publications and reports are reliable. The market data contained in this Report involves a number of assumptions, estimates and limitations. The ride-hailing and automobile financing markets in China may not grow at the rates projected by market data, or at all. The failure of these markets to grow at the projected rates may have a material adverse effect on our business and the market price of our common stock. If any one or more of the assumptions underlying the market data turns out to be incorrect, actual results may differ from the projections based on these assumptions. In addition, projections, assumptions and estimates of our future performance and the future performance of the industries in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described herein or our other reports filed with the SEC. You should not place undue reliance on these forward-looking statements.

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)

	June 30,			March 31,
	2025			2025
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	867,767		$	833,577
Accounts receivable		34,915			21,127
Accounts receivable, a related party		8,027			7,924
Finance lease receivables, current		136,579			166,339
Prepayments, other receivables and other current assets, net		1,071,674			1,015,084
Prepayment - a related party		—			22,662
Due from related parties, net, current		172,336			172,049
Total current assets		2,291,298			2,238,762

Property and equipment, net		1,455,691			1,652,921

Other assets
Operating lease right-of-use assets, net, a related party		76,538			6,910
Financing lease right-of-use assets, net		—			117,867
Intangible assets, net		356,250			375,000
Finance lease receivables, non-current		14,124			23,193
Due from a related party, net, non-current		1,111,726			1,386,139
Total other assets		1,558,638			1,909,109

Total assets	$	5,305,627		$	5,800,792

LIABILITIES, MEZZANNIE EQUITY AND EQUITY
Current liabilities
Accounts payable	$	163,354		$	163,231
Advances from customers		114,541			124,623
Income tax payable		20,177			19,918
Accrued expenses and other liabilities		3,616,419			3,757,393
Due to related parties		281,105			179,431
Operating lease liabilities, current - a related party		66,768			10,365
Financing lease liabilities		—			360,268
Derivative liabilities		4,213			84,591
Current liabilities - discontinued operations		517,036			518,352
Total current liabilities		4,783,613			5,218,172

Other liabilities
Operating lease liabilities, non-current - a related party		30,596			—
Total other liabilities		30,596			—

Total liabilities		4,814,209			5,218,172

Commitments and contingencies (note 16)

Mezzanine Equity
Series A convertible preferred stock (par value $1,000 per share, 5,000 shares authorized; 262 and 991 shares issued and outstanding at June 30, 2025 and March 31, 2025, respectively)		42,943			234,364

Stockholders’ equity (deficit)
Common stock (par value $0.0001 per share, 50,000,000 shares authorized; 1,108,312 and 1,051,804 shares issued and outstanding at June 30, 2025 and March 31, 2025, respectively) *		111			105
Additional paid-in capital		44,371,680			43,951,069
Accumulated deficit		(45,273,970	)		(45,109,573	)
Accumulated other comprehensive loss		(1,740,686	)		(1,697,164	)
Total Senmiao Technology Limited stockholders’ deficit		(2,642,865	)		(2,855,563	)

Non-controlling interests		3,091,340			3,203,819

Total equity		448,475			348,256

Total liabilities, mezzanine equity and equity	$	5,305,627		$	5,800,792

*Giving retroactive effect to the 1-for-10 reverse stock split effected on July 29, 2025

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

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 June 30,
	2025			2024
	(Unaudited)			(Unaudited)
Revenues
Revenues	$	836,042		$	873,766
Revenues, related parties		24,057			5,243
Total revenues		860,099			879,009

Cost of revenues
Cost of revenues		(603,505	)		(624,412	)
Cost of revenues, related parties		(59,639	)		(1,627	)
Total cost of revenues		(663,144	)		(626,039	)

Gross profit		196,955			252,970

Operating expenses
Selling, general and administrative expenses		(808,245	)		(853,498	)
Provision for credit losses		—			(173,441	)
Total operating expenses		(808,245	)		(1,026,939	)

Loss from operations		(611,290	)		(773,969	)

Other income (expense)
Other income, net		258,285			51,459
Interest expense on finance leases		(615	)		(5,088	)
Change in fair value of derivative liabilities		77,182			(8,287	)
Total other income, net		334,852			38,084

Loss before income taxes expense		(276,438	)		(735,885	)

Income tax expense		—			—

Net Loss from continuing operations		(276,438	)		(735,885	)

Net Loss from discontinued operations		—			(26,933	)

Net Loss		(276,438	)		(762,818	)

Net loss attributable to non-controlling interests		112,041			89,398

Net loss attributable to the Company’s stockholders	$	(164,397	)	$	(673,420	)

Net loss	$	(276,438	)	$	(762,818	)

Other comprehensive loss
Foreign currency translation adjustment		(43,960	)		(33,036	)

Comprehensive loss		(320,398	)		(795,854	)

less: Total comprehensive loss attributable to non-controlling interests		(112,479	)		(60,114	)

Total comprehensive loss attributable to the Company’s stockholders	$	(207,919	)	$	(735,740	)

Weighted average number of common stock*
Basic and diluted		1,082,802			1,052,122
Net loss per share - basic and diluted	$	(0.15	)	$	(0.64	)

Net loss per share - basic and diluted
Continuing operations	$	(0.15	)	$	(0.61	)
Discontinued operations	$	—		$	(0.03	)

*Giving retroactive effect to the 1-for-10 reverse stock split effected on July 29, 2025

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

SENMIAO TECHNOLOGY LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the Three Months Ended June 30, 2025 and 2024

(Expressed in U.S. dollar, except for the number of shares)

	For the Three Months Ended June 30, 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		1,051,804	$	105	$	43,951,069	$	(41,384,268	)	$	(1,672,005	)	$	3,159,103		$	4,054,004
Net loss		—		—		—		(673,420	)		—			(89,398	)		(762,818	)
Foreign currency translation adjustment		—		—		—		—			(62,320	)		29,284			(33,036	)
BALANCE, June 30, 2024 (Unaudited)		1,051,804	$	105	$	43,951,069	$	(42,057,688	)	$	(1,734,325	)	$	3,098,989		$	3,258,150

	For the Three Months Ended June 30, 2025
										Accumulated
					Additional					other			Non-
	Common stock				paid-in		Accumulated			comprehensive			controlling			Total
	Shares*		Par value		capital		deficit			loss			interest			equity
BALANCE, March 31, 2025		1,051,804	$	105	$	43,951,069	$	(45,109,573	)	$	(1,697,164	)	$	3,203,819		$	348,256
Net loss		—		—		—		(164,397	)		—			(112,041	)		(276,438	)
Exercise of November 2021 Private Placement Warrants		20,000		2		225,998		—			—			—			226,000
Fair value of derivative liabilities upon exercise of warrants		—		—		3,196		—			—			—			3,196
Conversion of preferred stock into common stock		36,471		4		191,417		—			—			—			191,421
Additional shares of common stock round up adjustment due to retroactive effect of 1-for-10 reverse stock split		37		—		—		—			—			—			—
Foreign currency translation adjustment		—		—		—		—			(43,522	)		(438	)		(43,960	)
BALANCE, June 30, 2025 (Unaudited)		1,108,312	$	111	$	44,371,680	$	(45,273,970	)	$	(1,740,686	)	$	3,091,340		$	448,475

*Giving retroactive effect to the 1-for-10 reverse stock split effected on July 29, 2025

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

SENMIAO TECHNOLOGY LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S. dollar, except for the number of shares)

	For the Three Months Ended June 30,
	2025			2024
	(Unaudited)			(Unaudited)
Cash Flows from Operating Activities:
Net loss	$	(276,438	)	$	(762,818	)
Net loss from discontinued operations		—			(26,933	)
Net loss from continuing operations		(276,438	)		(735,885	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation of property and equipment		219,630			234,815
Amortization of right-of-use assets		30,552			77,873
Amortization of intangible assets		18,750			18,778
Provision for credit losses		—			173,441
Gain on disposal of equipment		—			(2,607	)
Gain from disposal of a subsidiary		(245,310	)		—
Change in fair value of derivative liabilities		(77,182	)		8,287
Change in operating assets and liabilities
Accounts receivable		(13,384	)		7,729
Accounts receivable, a related party		—			(1,885	)
Finance lease receivables		36,982			32,499
Prepayments, other receivables and other assets		(112,568	)		(51,276	)
Prepayment - a related party		22,736			—
Accounts payable		(1,981	)		11,924
Advances from customers		(11,590	)		1,686
Accrued expenses and other liabilities		81,716			290,724
Due to a related party		—			4,517
Operating lease liabilities		—			(4,794	)
Operating lease liabilities – a related party		6,932			588
Net Cash (Used in) Provided by Operating Activities from Continuing Operations		(321,155	)		66,414
Net Cash Used in Operating Activities from Discontinued Operations		—			(49,652	)
Net Cash (Used in) Provided by Operating Activities		(321,155	)		16,762

Cash Flows from Investing Activities:
Purchases of property and equipment		—			(1,183	)
Cash received from disposal of property and equipment		—			8,433
Cash released from disposal of a subsidiary		(385	)		—
Net Cash (Used in) Provided by Investing Activities from Continuing Operations		(385	)		7,250
Net Cash Used in Investing Activities from Discontinued Operations		—			—
Net Cash (Used in) Provided by Investing Activities		(385	)		7,250

Cash Flows from Financing Activities:
Net proceeds from exercise of November 2021 Private Placement Warrants		226,000			—
Borrowings from a related party		99,347			—
Repayments from a related party		52,124			13,810
Repayments to related parties and affiliates		—			(25,365	)
Principal payments of finance lease liabilities		—			(8,985	)
Net Cash Provided by (Used in) Financing Activities from Continuing Operations		377,471			(20,540	)
Net Cash Used in Financing Activities from Discontinued Operations		—			(33,167	)
Net Cash Provided by (Used in) in Financing Activities		377,471			(53,707	)

Effect of exchange rate changes on cash, cash equivalents and restricted cash		(21,741	)		(13,484	)

Net increase (decrease) in cash, cash equivalents and restricted cash		34,190			(43,179	)
Cash, cash equivalents and restricted cash, beginning of the period		833,577			794,636
Cash, cash equivalents and restricted cash, end of the period		867,767			751,457
Less: Cash and cash equivalents from discontinued operations		—			(34,588	)
Cash, cash equivalents and restricted cash from continuing operations, end of the period		867,767			716,869

Supplemental Cash Flow Information
Cash paid for interest expense	$	—		$	—
Cash paid for income tax	$	—		$	—

Non-cash Transaction in Investing and Financing Activities
Recognition of right-of-use assets and lease liabilities, a related party	$	79,098		$	—
Settlement of other receivables and liabilities between related parties	$	260,229		$	—

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 Three Months Ended June 30,
	2025		2024
	(Unaudited)		(Unaudited)
Cash and cash equivalent from continuing operations, end of the period	$	867,767	$	714,281
Restricted cash from continuing operations, end of the period	$	—	$	2,588
Cash and cash equivalent from discontinued operations, end of the period	$	—	$	34,588

	For the Three Months Ended June 30,
	2025		2024
	(Unaudited)		(Unaudited)
Cash and cash equivalent from continuing operations, beginning of the period	$	833,577	$	737,719
Restricted cash from continuing operations, beginning of the period	$	—	$	2,337
Cash and cash equivalent from discontinued operations, beginning of the period	$	—	$	54,580

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

SENMIAO TECHNOLOGY LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND PRINCIPAL ACTIVITIES

Senmiao Technology Limited (the “Company”) is a U.S. holding company incorporated in the State of Nevada on June 8, 2017. The Company operates its business in one segment: automobile transaction and related services focusing on the online ride-hailing industry in the People’s Republic of China (“PRC” or “China”) through the Company’s majority owned subsidiaries, Chengdu Jiekai Yunli Technology Co., Ltd., a PRC limited liability company and its subsidiary (“Jiekai”), and Hunan Ruixi Financial Leasing Co., Ltd., a PRC limited liability company (“Hunan Ruixi”), and its former wholly owned subsidiary, Chengdu Corenel Technology Co., Ltd., a PRC limited liability company (“Corenel”), and Sichuan Jinkailong Automobile Leasing Co., Ltd. (“Jinkailong”), a PRC limited liability company, an equity investee in which the Company holds 35% of the equity interests.

Hunan Ruixi holds a business license for automobile sales and financial leasing and has been engaged in automobile financial leasing services and automobile sales since March 2019 and January 2019, respectively. The Company also has been engaged in operating leasing services through Hunan Ruixi, Jiekai and its equity investee company, Jinkailong since March 2019. Jinkailong used to facilitate automobile sales and financing transactions for its clients, who are primarily ride-hailing drivers and provides them operating lease and relevant after-transaction services.

The Company also used to operate online ride-hailing platform services through its own platform (known as Xixingtianxia) from October 2020 to August 2024, through Hunan Xixingtianxia Technology Co., Ltd., a PRC limited liability company (“XXTX”), which was a wholly owned subsidiary of Sichuan Senmiao Zecheng Business Consulting Co., Ltd. (“Senmiao Consulting”), a PRC limited liability company and wholly-owned subsidiary of the Company. The Company’s ride hailing platform enabled qualified ride-hailing drivers to provide transportation services in several cities in China. On August 8, 2024, Senmiao Consulting entered into a certain Acquisition Agreement with Debt Assumption Takeover (the “Acquisition Agreement”) with Jiangsu Yuelaiyuexing Technology Co., Ltd. (the “Purchaser”), and other parties thereto, in connection with the acquisition (the “Acquisition”) by the Purchaser of 100% of the Company’s equity interest in XXTX and its subsidiaries. On August 20, 2024, the Acquisition was completed and Senmiao Consulting disposed its 100% equity interest in XXTX and its subsidiaries (refer to Note 4). After the disposition, the Company operates its business in one segment.

The following diagram illustrates the Company’s corporate structure as of the filing date of these unaudited condensed consolidated financial statements:

Former Voting Agreements with Jinkailong’s Other Shareholders

Hunan Ruixi entered into two voting agreements signed in August 2018 and February 2020, respectively, as amended (the “Voting Agreements”), with Jinkailong and other Jinkailong’s shareholders holding an aggregate of 65% equity interests. Pursuant to the Voting Agreements, all other Jinkailong’s shareholders will vote in concert with Hunan Ruixi on all fundamental corporate transactions in the event of a disagreement for periods of 20 years and 18 years, respectively, ending on August 25, 2038.

On March 31, 2022, Hunan Ruixi entered into an Agreement for the Termination of the Agreement for Concerted Action by Shareholders of Jinkailong (the “Termination Agreement”), pursuant to which the Voting Agreements mentioned above was terminated as of the date of the Termination Agreement. The termination will not impair the past and future legitimate rights and interests of all parties in Jinkailong. Starting from April 1, 2022, the parties no longer maintain a concerted action relationship with respect to the decision required to take concerted action at its shareholders meetings as stipulated in the Voting Agreements. Each party shall independently express opinions and exercise various rights such as voting rights and perform relevant obligations in accordance with the provisions of laws, regulations, normative documents and the Jinkailong’s articles of association.

As a result of the Termination Agreement, the Company no longer has a controlling financial interest in Jinkailong and has determined that Jinkailong was deconsolidated from the Company’s consolidated financial statements effective as of March 31, 2022. However, as Hunan Ruixi still holds 35% equity interests in Jinkailong, Jinkailong is the equity investee company of the Company since then.

As of June 30, 2025, the Company has outstanding balance due from Jinkailong amounted to $1,195,483, net of allowance for credit losses, of which, $1,111,726 is to be repaid over a period from July 2026 to December 2026, classified as due from a related party, net, non-current. As of March 31, 2025, the Company has outstanding balance due from Jinkailong amounted to $1,468,822, net of allowance for credit losses, of which, $1,386,139 is to be repaid over a period from April 2026 to December 2026, classified as due from a related party, net, non-current. (refer to Note 14).

As of June 30, 2025 and March 31, 2025, allowance for credit losses due from Jinkailong amounted to $5,232,834 and $5,165,699, respectively. During the three months ended June 30, 2025 and 2024, the Company recorded provision for credit losses against the balance due from Jinkailong of $0 and $173,441, respectively.

2. GOING CONCERN

In assessing the Company’s liquidity, the Company monitors and analyzes its cash on-hand and its operating and capital expenditure commitments. The Company’s liquidity needs are to meet its working capital requirements, operating expenses and capital expenditure obligations. Debt financing from financial institutions and equity financings have been utilized to finance the working capital requirements of the Company.

The Company’s business is capital intensive. The Company’s management has considered whether there is substantial doubt about its ability to continue as a going concern due to (1) the net loss of approximately $0.3 million for the three months ended June 30, 2025; (2) accumulated deficit of approximately $45.3 million as of June 30, 2025; (3) the working capital deficit of approximately $2.5 million as of June 30, 2025.

Management has determined there is substantial doubt about its ability to continue as a going concern. If the Company is unable to generate significant revenue, the Company may be required to curtail or cease its operations. Management is trying to alleviate the going concern risk through the following sources:

●

Equity financing to support its working capital;

●

Other available sources of financing (including debt) from PRC banks and other financial institutions; and

●

Financial support and credit guarantee commitments from the Company’s related parties.

Based on the above considerations, management is of the opinion that the Company will probably not have sufficient funds to meet its working capital requirements and debt obligations as they become due one year from the filing date of these unaudited condensed consolidated financial statements if the Company is unable to obtain additional financing. There is no assurance that the Company will be successful in implementing the foregoing plans or that additional financing will be available to the Company on commercially reasonable terms, or at all. There are a number of factors that could potentially arise that could undermine the Company’s plans, such as (i) changes in the demand for the Company’s services, (ii) PRC government policies, (iii) economic conditions in China and worldwide, (iv) competitive pricing in the automobile transaction and related service and ride-hailing industries, (v) changes in the Company’s relationships with key business partners, (vi) the ability of financial institutions in China to provide continued financial support to the Company’s customers, and (vii) the perception of PRC-based companies in the U.S. capital markets. The Company’s inability to secure needed financing when required could require material changes to the Company’s business plans and could have a material adverse effect on the Company’s ability to continue as a going concern and results of operations. The unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of such uncertainties.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of presentation

The unaudited condensed consolidated financial statements, including the unaudited condensed consolidated balance sheets as of June 30, 2025, the unaudited condensed consolidated statements of operations and comprehensive loss, the unaudited condensed consolidated statements of changes in equity, and the unaudited condensed consolidated statements of cash flows for the three months ended June 30, 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) Foreign currency translation

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing on the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates on the date of the balance sheet. The resulting exchange differences are recorded in the statement of operations.

The reporting currency of the Company and its subsidiaries is U.S. dollars (“US$”) and the unaudited condensed consolidated financial statements have been expressed in US$. However, the Company maintains the books and records in its functional currency, Chinese Renminbi (“RMB”), being the functional currency of the economic environment in which its operations are conducted.

In general, for consolidation purposes, assets and liabilities of the Company and its subsidiaries whose functional currency is not the US$, are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of the Company and its subsidiaries are recorded as a separate component of accumulated other comprehensive loss within the unaudited condensed consolidated statements of changes in equity.

Translation of amounts from RMB into US$ has been made at the following exchange rates for the respective periods:

	June 30,		March 31,
	2025		2025
Balance sheet items, except for equity accounts – RMB: US$1:		7.1636		7.2567

	For the three months ended June 30,
	2025		2024
Items in the statements of operations and comprehensive loss, and cash flows – RMB: US$1:		7.2331		7.2410

(c) Use of estimates

In presenting the unaudited condensed consolidated financial statements in accordance with U.S. GAAP, management makes estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. The Company bases its estimates on past experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Estimates are used when accounting for items and matters including, but not limited to, revenue recognition, residual values of property and equipment, determinations of the useful lives and valuation of long-lived assets, estimates of allowances for credit losses for receivables and due from related parties, estimates of impairment of long-lived assets, and valuation of deferred tax assets.

(d) Fair values of financial instruments

Accounting Standards Codification (“ASC”) Topic 825, Financial Instruments (“Topic 825”) requires disclosure of fair value information of financial instruments, whether or not recognized in the balance sheets, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Topic 825 excludes certain financial instruments and all nonfinancial assets and liabilities from its disclosure requirements. Accordingly, the aggregate fair value amounts do not represent the underlying value of the Company. The three levels of valuation hierarchy are defined as follows:

Level 1

Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2

Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

Level 3

Inputs to the valuation methodology are unobservable and significant to the fair value.

The following table sets forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2025 and March 31, 2025:

	Carrying Value as of		Fair Value Measurement as of
	June 30,		June 30, 2025
	2025		Level 1		Level 2		Level 3
	(Unaudited)						(Unaudited)
Derivative liabilities	$	4,213	$	—	$	—	$	4,213

	Carrying Value as of		Fair Value Measurement as of
	March 31,		March 31, 2025
	2025		Level 1		Level 2		Level 3
Derivative liabilities	$	84,591	$	—	$	—	$	84,591

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 three months ended June 30, 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
	Offering Warrants			Offering Warrants			Investors Warrants			Placement Warrants			Investors Warrants			Placement Warrants			Total
BALANCE as of March 31, 2024	$	3,219		$	4,333		$	80,636		$	6,048		$	179,520		$	15,077		$	288,833
Change in fair value of derivative liabilities		(3,198	)		(4,114	)		(67,813	)		(5,086	)		(114,934	)		(9,097	)		(204,242	)
BALANCE as of March 31, 2025		21			219			12,823			962			64,586			5,980			84,591
Change in fair value of derivative liabilities		(21	)		(219	)		(12,660	)		(949	)		(57,742	)		(5,591	)		(77,182	)
Exercise		—			—			—			—			(3,196	)		—			(3,196	)
BALANCE as of June 30, 2025 (Unaudited)	$	—		$	—		$	163		$	13		$	3,648		$	389		$	4,213

The August 2020 Underwriters’ Warrants, the February 2021 Placement Agent Warrants, the February 2021 ROFR Warrants, the May 2021 Investors Warrants, the May 2021 Placement Agent Warrants, and the November 2021 Investors Warrants and November 2021 Placement Agent Warrants (all discussed below) are not traded in an active securities market; therefore, the Company estimates the fair value to those warrants using the Black-Scholes valuation model as of June 30, 2025 and March 31, 2025.

	As of June 30, 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
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
# of shares exercisable*		3,181			3,804			1,522			55,319			4,149			**			5,515
Valuation date		6/30/2025			6/30/2025			6/30/2025			6/30/2025			6/30/2025			6/30/2025			6/30/2025
Exercise price*	$	62.50		$	138.00		$	172.50		$	105.00		$	105.00		$	**		$	68.00
Stock price*	$	3.00		$	3.00		$	3.00		$	3.00		$	3.00		$	3.00		$	3.00
Expected term (years)		0.10			0.62			0.62			0.87			0.87			1.36			1.36
Risk-free interest rate		0.38	%		2.44	%		2.44	%		3.44	%		3.44	%		3.87	%		3.87	%
Expected volatility		118	%		118	%		118	%		118	%		118	%		118	%		118	%

	As of March 31, 2025
	August 4, 2020		February 10, 2021				May 13, 2021				November 10, 2021
			Placement						Placement				Placement
	Underwriters’		Agent		ROFR		Investor		Agent		Investor		Agent
Granted Date	Warrants		Warrants		Warrants		Warrants		Warrants		Warrants		Warrants
# of shares exercisable*		3,181		3,804		1,522		55,319		4,149		**		5,515
Valuation date		3/31/2025		3/31/2025		3/31/2025		3/31/2025		3/31/2025		3/31/2025		3/31/2025
Exercise price*	$	62.50	$	138.00	$	172.50	$	105.00	$	105.00	$	**	$	68.00
Stock price*	$	8.90	$	8.90	$	8.90	$	8.90	$	8.90	$	8.90	$	8.90
Expected term (years)

SEC Form 10-Q filed by Senmiao Technology Limited