SENMIAO TECHNOLOGY LTD Management Report and Analysis of Financial Condition and Results of Operations (Form 10-K)

The following discussion and analysis of our results of operations and financial
condition should be read together with our consolidated financial statements and
the notes thereto and other financial information, which are included elsewhere
in this Report. Our financial statements have been prepared in accordance with
U.S. GAAP. In addition, our financial statements and the financial information
included in this Report reflect our organizational transactions and have been
prepared as if our current corporate structure had been in place throughout
the
relevant periods.

Overview

We are a provider of automobile transaction and related services, connecting
auto dealers, financial institutions, and consumers, who are mostly existing and
prospective ride-hailing drivers affiliated with different operators of online
ride-hailing platforms in the People's Republic of China ("PRC" or "China"). We
provide automobile transaction and related services through our wholly owned
subsidiaries, Yicheng Financial Leasing Co., Ltd., a PRC limited liability
company ("Yicheng"), Chengdu Corenel Technology Limited, a PRC limited liability
company ("Corenel"), and Hunan Ruixi Financial Leasing Co., Ltd. ("Hunan
Ruixi"), a PRC limited liability company, and its equity-investment, also its
former variable interest entity ("VIE"), Sichuan Jinkailong Automobile Leasing
Co., Ltd. ("Jinkailong"). Since October 2020, we also operate an online
ride-hailing platform through Hunan Xixingtianxia Technology Co., Ltd. ("XXTX"),
a wholly-owned subsidiary of Sichuan Senmiao Zecheng Business Consulting Co.,
Ltd., our wholly-owned subsidiary ("Senmiao Consulting"). Our platform enables
qualified ride-hailing drivers to provide application-based transportation
services mainly in Chengdu, Changsha, Guangzhou, and other 18 cities in China.
Substantially all of our operations are conducted in China.

Our automotive 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) automobile financing where we
provide our customers with auto finance solutions through financing leases (the
"Auto Financing"); (iii) automobile sales where we sell new purchased or used
cars to our customers (the "Auto Sales"); (iv) facilitation of automobile
transaction and financing where we used to connect the prospective ride-hailing
drivers to financial institutions to buy, or get financing on the purchase of,
cars to be used to provide online ride-hailing services (the "Auto Financing and
Transaction Facilitation"); and (v) other supporting services provided to online
ride-hailing drivers. We started our facilitation and supporting services in
November 2018, the sale of automobiles in January 2019, and financial and
operating leasing in March 2019, respectively.

Since November 22, 2018, the acquisition date of Hunan Ruixi, and as of March
31, 2022, we have facilitated financing for an aggregate of 1,687 automobiles
with a total value of approximately $26.1 million, sold an aggregate of 1,423
automobiles with a total value of approximately $13.8 million and delivered
approximately 2,321 automobiles under operating leases (including 1,826
automobiles delivered by Jinkailong) and 131 automobiles under financing leases
to customers, the vast majority of whom are online ride-hailing drivers.

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The table below provides a breakdown of the number of vehicles sold or delivered
under different leasing arrangements or managed/guaranteed by us and
corresponding revenue generated for the years ended March 31, 2022 and 2021:

                                                                 For the Years Ended
                                                                      March 31,
                                                           2022                        2021
                                                 Number of                   Number of
                                                 Vehicles      Revenue*      Vehicles      Revenue*
Auto Operating Leasing                              >2,300    $ 7,175,000       >1,200    $ 3,435,000
Auto Financing                                         131    $   102,000          131    $   228,000
Auto Sales                                               6    $    26,000           36    $   487,000
Auto Financing and Transaction Facilitation              -    $         -  
        61    $   189,000
Other Services                                      >1,800    $ 1,775,000       >2,500    $   919,000

* The number included information about our former VIE’s operations and was rounded to the nearest thousand for disclosure purposes.

As of March 31, 2022, we deconsolidated Jinkailong and its operation result was
separately disclosed in our consolidated statements of operations and
comprehensive loss. However, although Jinkailong was ceased from our
consolidation scope since March 31, 2022, Huana Ruixi, Corenel and Jiekai
continuously provide automobile transaction and related services, mainly Auto
Operating Leasing, similar to Jinkailong in Changsha and Chengdu. During the
year ended March 31, 2022, our Auto Operating Leasing, Auto Financing,
automobile management services, and Auto Sales accounted for approximately
76.6%, 4.5%, 3.3% and 1.2% of our total revenue from our automobile transactions
and related services, respectively, for the year ended March 31, 2022, while our
Auto Sales, Auto Operating Leasing, Auto Financing and Transaction Facilitation,
Auto Financing and automobile management services accounted for approximately
38.0%, 17.5%, 14.7%, 14.3% and 6.2% for the year ended March 31, 2021,
respectively, excluding the income which Jinkailong generated.

Our carpooling platform services

As part of our goal to provide an all-round solution for online ride-hailing
drivers as well as to increase our competitive power in an increasingly
competitive online ride-hailing industry and to take advantage of the market
potential, in October 2020, we began operating our own online ride-hailing
platform in Chengdu. The platform (called Xixingtianxia) was owned and operated
by XXTX, of which Senmiao Consulting acquired a 78.74% equity interest pursuant
to a supplementary agreement to XXTX Investment Agreement with all the original
shareholders of XXTX on February 5, 2021 (the "XXTX Increase Investment
Agreement").

Pursuant to the XXTX Increase Investment Agreement, Senmiao Consulting agreed to
make an investment of RMB40 million (approximately $6 million) in XXTX in cash
in exchange for a 78.74% equity interest in XXTX. The registration procedures
for the change in shareholders and registered capital of XXTX were completed on
March 19, 2021. After the transaction, the total registered capital of XXTX
increased to RMB50.8 million (approximately $7.8 million).

On October 22, 2021, Senmiao Consulting further entered into a Share Swap
Agreement (the "Share Swap Agreement"), pursuant to which the Senmiao Consulting
shall acquire all of the remaining equity interests the original shareholders
hold in XXTX at a total purchase price of $3.5 million, payable in the Company's
shares of common stock, par value $0.0001 per share (the "Common Stock") at a
per share price of the average closing price of a share of Common Stock reported
on the Nasdaq Capital Market for ten (10) trading days immediately preceding the
date of the Share Swap Agreement. On November 9, 2021, the issuance of 5,331,667
shares of the Company's common stock for this transaction has been completed and
on December 31, 2021, the registration procedures for the change in shareholders
and thee record-filing of the local PRC government have been completed. Upon the
completion of the transaction, Senmiao Consulting holds 100% equity interest in
XXTX.

At the date of this report, Senmiao Council made a capital contribution of 36.86 million RMB (approximately $5.81 million) to XXTX and the remaining amount should be paid before December 31, 2025.

XXTX operates Xixingtianxia and holds a national online reservation taxi
operating license. The platform is presently servicing online ride-hailing
drivers in 21 cities in China, including Chengdu, Changsha, Guangzhou and so on,
providing them with a platform to view and take customer orders for rides. We
currently collaborate with Gaode Map, a well-known aggregation platform in China
on our ride-hailing platform services. Under our collaboration, when a rider
uses the platform to search for taxi/ride-hailing services on the aggregation
platform, the platform provides such rider a number of online ride-hailing
platforms for selection, including ours and if our platform is selected by the
rider, the order will then be distributed to registered drivers on our platform
for viewing and acceptance. The

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rider may also simultaneously select multiple online ride-hailing platforms in
which case, the aggregation platform will distribute the requests to different
online ride-hailing platforms which they cooperate with, based on the number of
available drivers using the platform in a certain area and these drivers'
historical performance, among other things. XXTX generates 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 earns 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. XXTX settles its commissions with
the aggregation platforms on a weekly basis.

Meanwhile, in order to strengthen our market position in certain cities, our
collaboration model with Meituan has been changed from the one same as Gaode, to
the one focusing on automobile operating lease and drivers' management services
since August 2021. Since early August 2021, our equity investee company and
former VIE, Jinkailong, signed a new contract with an affiliate of Meituan,
whereby the online ride-hailing requests and orders shall be completed on
Meituan's platform utilizing our network of cars and drivers. Jinkailong earned
rental income from drivers and earned commissions from Meituan.

The acquisition of XXTX has brought us a new stream of revenue and enhanced our
goal of providing an all-round solution for online ride-hailing drivers. We
launched Xixingtianxia in specific markets within Chengdu in late October 2020,
focusing on current driver customers. During the year ended March 31, 2022, we
have expanded marketing of our ride-hailing platform to a larger pool of
potential drivers and riders in Chengdu, Changsha, Guangzhou and other 16 cities
through cooperation with certain local car rental companies and through offering
attractive incentives and awards to drivers.

During the year ended March 31, 2022, approximately 11.5 million rides with
gross fare of approximately $37.3 million were completed through Xixingtianxia
and an average of over 9,500 ride-hailing drivers completed rides and earned
income through Xixingtianxia (the "Active Drivers") each month. During the year
ended March 31, 2022, we earned online ride-hailing platform service fees of
approximately $2.7 million, netting off approximately $3.4 million incentives
paid to Active Drivers.

During the period from the acquisition date to March 31, 2021, approximately 4.4
million rides with gross fare of approximately $12.4 million were completed
through Xixingtianxia and an average of over 6,000 ride-hailing drivers
completed rides and earned income through Xixingtianxia each month. During the
period since the acquisition date to March 31, 2021, we achieved revenue of
approximately $0.9 million from our Online Ride-hailing Platform Services, after
taking into account approximately $1.8 million incentives paid by us to Active
Drivers, which were recorded as a reduction to our revenue.

We plan to expand our driver base for the platform and automobile rental
business while strengthening the royalty of the drivers who both lease our cars
and use our platform while expanding, but our platform is available to others.
We plan to launch Xixingtianxia in more cities across China the next 12 months.

Main factors and risks affecting results of operations

Ability to grow our base of automotive tenants and active drivers

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. After the acquisition of XXTX, our revenue growth also depends on the
number of completed online ride-hailing orders on our platform, which largely
depends on the number of Active Drivers who complete ride-hailing transactions
on our platform. We acquire customers for our Automobile Transaction and Related
Services, as well as for our Online Ride-hailing Platform 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 increase the number of our Active Drivers by expanding our platform
to more cities during the next five years as well as marketing our platform to
our existing and prospective automobile lessees. We expect the expansion of our
Active Driver base to promote the growth of our automobile rental business
because we offer automobile rental solutions/incentives specifically targeted at
drivers using our platform. An effective cross-selling strategies between our
automobile leasing business and online ride-hailing platform services business
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 staffs and improving the
quality and variety of our services. As of March 31, 2022, we had 22 and 52
employees in our own sales department and sales department of our equity
investee company, Jinkailong, respectively.

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Car rental management

Due to the fierce competition of online ride-hailing industry in Chengdu and the
adverse impact from COVID-19 pandemic across mainland China, a significant
number of online ride-hailing drivers exited the ride-hailing business and
rendered their automobiles to us for sublease or sales in order to generate
income/proceeds to cover their payments owed to the financial institutions and
us. We have seen an increasing demand for short-term car rentals since the end
of 2019, which remained stable during the three months and year ended March 31,
2022. To meet the demand of business expansion in Chengdu, Changsha and
Guangzhou, we also purchased and leased automobiles from third parties for our
operating lease. The daily management and timely maintenance of leased
automobiles will have a significant effect on the growth of our income from
leasing automobiles in the next twelve months. The effective management of our
automobiles through our proprietary system and experienced auto-management team
could provide qualified automobiles to potential lessees, either for personal
use or providing online ride-hailing services. As of March 31, 2022, we had one
parking lot and 4 employees in Guangzhou, and one parking lot, and an exhibition
hall and 6 employees in Changsha, and our equity investee company, Jinkailong,
had one parking lot and 10 employees in Chengdu, for parking and management of
automobiles for operating lease. During the year ended March 31, 2022, our
average utilization of the automobiles for operating lease, including the ones
operated by Jinkailong, was approximately 56.3%. During the year ended March 31,
2021, the average utilization of the automobiles for operating lease was
approximately 79.1%.

Our service offers and prices

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 stable pricing formula, 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 Active Drivers depends on the
comprehensive income they could earn from our own or cooperated platform, which
is mainly affected by the number orders distributed to them through our platform
and the amount of the incentives paid to them from platforms. Our revenue growth
also depends on our abilities to effectively price our services, which enables
us to attract more customers and improve our profit margin.

Ability to retain and key business associates

Historically, we have set up a series of strategy and business relationships
with certain affiliates of some famous and leading companies of new energy
vehicles ("NEVs") manufacturers, online ride-hailing platforms and travel
service providers to develop our Automobile Transaction and Related Services and
Online Ride-hailing Platform Services. We earned commission or services fee from
them, purchased and leased automobiles for our business at a favorable price.
The close relationships have provided us with the necessary capacity to support
the development of our online ride-hailing platform and leasing business. To
retain these valuable cooperators and continuously explore opportunities to
collaborate with them in more areas is important to us to have considerable
resources to support the exploration and expansion of our business into new
cities.

Ability to retain existing financial institutions and engage new financial institutions

Historically, the growth of our business is dependent on our ability to retain
existing financial institutions and engage new financial institutions. During
the year ended March 31, 2022, we did not generate revenue from automobile
financing facilitation transactions because of the shift of our business focus
to automobile rental. Despite such decrease, we are exploring new collaboration
methods with financial institutions in connection with our automobile rental
business and for our purchase of NEVs in the next twelve months. Our
collaborations with financial institutions may be affected by factors beyond our
control, such as perception of automobile financing as an attractive asset,
stability of financial institutions, general economic conditions and regulatory
environment. To increase the number of our cooperative financial institutions
and the availability of financing for our existing and new businesses will
enhance the overall stability and sufficiency of funding for automobile
transactions.

Ability to collect receivables in a timely manner

We used to advance the purchase price of automobiles and all service expenses
when we provide related services to the purchasers. We collect the receivables
due from automobile purchasers from their monthly installment payments and repay
financial institutions on behalf of the purchasers every month. As of March 31,
2022, we had accounts receivable, net of allowance of approximately $0.3 million

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and advanced payments of approximately $0.2 million due from the automobile
purchasers, net of allowance, which will be collected through installment
payments on a monthly basis during the relevant affiliation periods. In
accordance with the development of the operating lease business, our cooperated
platforms, such as Meituan, agree to temporarily "lock-up" the fares of the
rides which Active Drivers earn from the platform to ensure the timely
collection of our rental receivables from those Active Drivers. We settle the
rental income with each online ride-hailing driver monthly based on the product
solutions they chose. Besides, during the year ended March 31, 2022, we settle
our commissions with the aggregation platforms on a weekly basis for our online
ride-hailing platform services and automobile rental income on a monthly basis.
As of March 31, 2022, we had accounts receivable of online ride-hailing service
fees of approximately $0.1 million in total.

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 cooperated
platform 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 effectively manage defects and potential warranty liability

Our subsidiary, Hunan Ruixi, and its equity investee company and former VIE,
Jinkailong are exposed to credit risk as they are required by certain financial
institutions to provide guarantee on the lease/loan payments (including
principal and interests) of the automobile purchasers referred by us. If a
default occurs, they are required to make the monthly payments on behalf of the
defaulted purchasers to the financial institution.

We manage the credit risk arising from the default of automobile purchasers by
performing credit checks on each automobile purchaser 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 close
communication with our purchasers in particular the online ride-hailing drivers
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.

In addition, automobiles are used as collateral to secure purchasers' payment
obligations under the financing arrangement. In the event of a default, Hunan
Ruixi and Jinkailong can track the automobile through an installed GPS system
and repossess and handover the automobile over to the financial institution so
that they can be released from their guarantee liability. However, if a
financial institution initiates a legal proceeding to collect payments due from
a defaulted automobile purchaser, Hunan Ruixi and Jinkailong may be required to
repay the defaulted amount as a guarantor. If they are unable to undertake the
responsibility as a guarantor, their own assets, such as cash and cash
equivalents, may be frozen by the court if the financial institution
successfully requests for an order to freeze our assets or bank accounts, which
may adversely affect our operations.

As of March 31, 2022, 100 and 1,227 online ride-hailing drivers we serviced
rendered their automobiles to Hunan Ruixi and Jinkailong, respectively, for
sublease or sale. In general, most of the defaulted automobile purchasers who
want to remain in online ride-hailing business would pay the default amounts
within one to three months. Our risk management department typically starts to
interact with overdue purchasers if they have missed one monthly installment
payment. However, if the balances are overdue for more than two months or the
purchasers decide to exit the online ride-hailing business and sublease or sell
their automobiles, we would fully record an allowance against receivables from
those purchasers. As of March 31, 2022, we recognized an accumulated allowance
against receivables of approximately $411,528 and $3,374,064 from these
purchasers served by Hunan Ruixi and Jinkailong, respectively. For the year
ended March 31, 2022, we provided additional allowance for doubtful accounts of
$123,744 and $11,746, respectively, based on re-evaluation collection from those
drivers served by Hunan Ruixi and Jinkailong. We also recognized approximately
$8,000 expenses for the guarantee services as the drivers exited the online
ride-hailing business and would no longer make the monthly repayments to us.
During the year ended March 31, 2022, we sub-leased approximately 1,300 rendered
automobiles in total to other customers. By subleasing automobiles from these
drivers, we believe we can cope with the defaults and control associated risks.

Further, the automobiles subject to our financing leases are not collateralized
by us. As of March 31, 2022, the total value of non-collateralized automobiles
was approximately $877,000. We believe our risk exposure of financing leasing is
immaterial as we have experienced limited default cases and we are able to
re-lease those automobiles to drivers under financing leases.

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Actual and potential impact of the ongoing coronavirus (COVID-19) in China about our company

Due to the lockdown policy and travel restrictions in our areas of operation in
China where local resurgences of COVID-19 cases, our Automobile Transaction and
Related Services and Online Ride-hailing Platform Services have been adversely
impacted. See "Business -  Actual and Potential Impact of Ongoing Coronavirus
(COVID 19) in China on Our Business."

Ability to manage and develop new carpooling activities

Due to the fierce competition of online ride-hailing industry in Chengdu and
Changsha, our ability to increase our revenue over time may be limited if we
focus only on our current Automobile Transaction and Related Services business
model. As part of our strategy to provide an all-encompassing solution for
online ride-hailing drivers, we have expanded our services to drivers through
the operation of Xixingtianxia, our own online ride-hailing platform, which has
brought us a new stream of revenue. We generate revenue from commissions earned
from each completed order, which represent 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. As the aggregation platforms distribute the
demand orders to different online ride-hailing platforms, the flow of drivers in
our area of operations is enhanced, leading to a higher probability that more
ride orders will be distributed to our platform, which in turn will increase the
revenue of the drivers who use our platform (and our revenue). This also allows
us to attract more drivers to engage their online ride-hailing business on our
platform. Through a series of promotion and effective daily management and
training services, we expect our own online ride-hailing platform will offer us
a stable revenue source which can also help grow our automobile financing and
leasing business. Besides, we are dealing with other trip platforms to attract
more riders choosing their trip through our platform.

Pursuant to the cooperation agreement signed with Didi Chuxing Technology
Co., Ltd. ("Didi") for our Automobile Transaction and Related Services, we may
be penalized by Didi, or our partnership with Didi may be terminated as we now
operate a business competitive with Didi. However, the service fees we earned
from Didi for automobile transaction and related services currently represent
less than 0.1% of our total revenue. Therefore, we believe that the risk of
termination of cooperation with Didi on automobile transaction and related
services will not have a material influence on our business or results of
operations.

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.

Market opportunities 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. According to the 49th Statistical report on Internet Development
in China published in February 2022 by the China Internet Network Information
Center (CNNIC), the number of online ride-hailing service users had reached 452
million by the end of 2021, increased by 24% from 2020, and took approximately
43.9% of the total number of Chinese internet users. The online ride-hailing
industry is facing increasing competition in China and is attracting more
capital investment. According to the MOT of the People's Republic of China, as
of March 31, 2022, approximately 267 online ride-hailing platforms have obtained
booking taxi operating licenses and the total volume of online ride-hailing
orders was approximately 539 million in March 2022 in China. Meanwhile,
approximately 1.6 million online booking taxi transportation certificates and
approximately 4.1 million online booking taxi driver's licenses were issued
nationwide in China. Since 2019, in addition to the traditional online
ride-hailing platforms, automobile manufacturers, offline operation service
companies, financial and map service providers, among others, have built
cooperation relationships with each other to make the online ride-hailing
industry a more aggregated industry.

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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 number of qualified automobile purchasers and
online ride-hailing drivers seeking credit from the financial institutions, as
well as their ability to make payments. 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.

In order to manage the rapidly growing ride-hailing service market and control
relevant risks, on July 27, 2016, seven ministries and commissions in China,
including the MOT, jointly promulgated the "Interim Measures for the
Administration of Online Taxi Booking Business Operations and Services"
("Interim Measures") and amended it on December 28, 2019, which legalizes online
ride-hailing services such as Didi and requires the online ride-hailing services
to meet the requirements set out by the measures and obtain taxi-booking service
licenses and take full responsibility of the ride services to ensure the safety
of riders.

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
detailed guidance "Working Process for the Online Booking Taxi Drivers
Qualification Examination and Issuance" and the "Online Booking 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: (1) the ride-hailing service platform such as Didi 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 should be NEVs.

On July 23, 2018, the General Office of Changsha Municipal People's Government
issued the "Detailed Rules for the Administration of Online Booking Taxi
Management Services for Changsha." On June 12, 2019, the Municipal
Communications Commission of Changsha City further issued "Transfer and
Registration Procedures of Changsha Online Booking of Taxi." According to the
regulations and guidelines, to operate a ride-hailing business in Changsha
requires similar licenses in Chengdu, except those automobiles used for online
ride-hailing services are required to meet certain standards, including that the
sales price (including taxes) is over RMB120,000 (approximately $17,000). In
practice, Hunan Ruixi is also required to employ a safety administrator for
every 50 automobiles used for online ride-hailing services and submit daily
operation information of these automobiles such as traffic violation to the
Transport Management Office of the Municipal Communications Commission of
Changsha City every month.

In addition to the national online reservation taxi operating license, XXTX and
its subsidiaries also obtained the online reservation taxi operating license in
25 cities, including Chengdu, Changsha, Guangzhou, Tianjin, Shenyang, Harbin,
Nanchang, Haikou, Hezhou, two cities in Zhejiang, Shandong, and Guizhou
Province, respectively, five cities in Jiangsu Province and other five cities in
Sichuan Province from June 2020 to April 2022, to operate the online
ride-hailing platform services.

However, approximately 45% of our ride-hailing drivers have not obtained the
driver's license as of March 31, 2022 while all of the cars used for online
ride-hailing services which we provided management services have the automobile
certificate. Without requisite automobile certificate or driver's license, these
drivers may be suspended from providing ride-hailing services, confiscated their
illegal income and subject to fines of up to 10 times of their illegal income.
Starting in December 2019, Didi began to enforce such limitation on drivers in
Chengdu who have a driver's license but operate automobiles without the
automobile certificate.

Furthermore, according to the Interim Measures, no enterprise or individual is
allowed to provide information for conducting online ride-hailing services to
unqualified vehicles and drivers. Pursuant to the Interim Measures, XXTX and its
subsidiaries may be fined between RMB5,000 to RMB30,000 (approximately $789 to
$4,732) for violations of the Interim Measures, including providing online
ride-hailing platform services to unqualified drivers or vehicles. During the
year ended March 31, 2022, we have been fined by approximately $178,000 by
Traffic Management Bureaus in Chengdu and Changsha, of which, approximately
$16,000 was further compensated by drivers or cooperated third parties. If we
are deemed in serious violation of the Interim Measures, our Online Ride-hailing
Platform Services may be suspended and the relevant licenses may be revoked by
certain government authorities.

We are in the process of assisting the drivers to obtain the required
certificate and license both for our Automobile Transaction and Related Services
and our Online Ride-hailing Platform Services. However, there is no guarantee
that all of the drivers affiliated with us

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would be able to obtain all the certificates and licenses. Further, there is no
assurance that each of the drivers who uses our platform or the cars can possess
the requisite license or certificate. Our business and results of operations
will be materially and adversely affected if our affiliated drivers are
suspended from providing ride-hailing services or imposed substantial fines or
if we are found to be in serious violation of the Interim Measures due to the
drivers' failure to obtain requite licenses and/or automobile certificates in
connection with providing services through our platform.

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 Year Ended March 31, 2022 Compared to
the Year Ended March 31, 2021

                                                           For the Years Ended
                                                                March 31,
                                                          2022             2021            Change
Revenues                                             $    4,913,102    $   2,188,840    $   2,724,262
Cost of revenues                                        (6,511,031)      (1,984,079)      (4,526,952)
Gross profit (loss)                                     (1,597,929)          204,761      (1,802,690)
Operating expenses
Selling, general and administrative expenses            (9,525,408)      (5,905,579)      (3,619,829)
Provision for doubtful accounts                           (235,279)        (299,658)           64,379
Impairments of inventories                                 (60,398)                -         (60,398)
Impairments of long-lived assets                          (142,974)        
(10,953)        (132,021)
Total operating expenses                                (9,964,059)      (6,216,190)      (3,747,869)
Loss from operations                                   (11,561,988)      (6,011,429)      (5,550,559)
Other income (expenses), net                              (107,444)          301,269        (408,713)
Interest expense                                            (5,893)                -          (5,893)
Interest expense on finance leases                         (55,844)         (46,518)          (9,326)
Change in fair value of derivative liabilities            6,951,482      (1,710,415)        8,661,897
Issuance costs for issuing series A convertible
preferred stock                                           (821,892)                -        (821,892)
Loss before income taxes                                (5,601,579)      (7,467,093)        1,865,514
Income tax expenses                                         (4,566)          (8,332)            3,766
Net loss from continuing operations                  $  (5,606,145)    $ (7,475,425)    $   1,869,280


Revenues

We started generating revenue from Automobile Transaction and Related Services
from our acquisition of Hunan Ruixi on November 22, 2018 and revenue from Online
Ride-hailing Platform Services from our acquisition of XXTX on October 23, 2020,
respectively.

Revenue for the year ended March 31, 2022 increased by $2,724,262, or
approximately 124%, as compared with the year ended March 31, 2021. The increase
was mainly due to the increase of operating lease revenues from automobile
rentals and revenues from online ride-hailing platform services. In an effort to
mitigate the negative impact on our daily cash flow resulting from the rendering
of automobiles from drivers who exited the ride-hailing business due to the
COVID-19 pandemic in China and develop the new business, we shifted our business
focus to automobile rentals from facilitation of automobile transaction and
financing since the fiscal year 2021. The online ride-hailing market has
gradually recovered since April 15, 2020 as COVID-19 is generally under control
in our operation areas in China and the sporadic local resurgences of COVID-19
did not have material impact on the local market. As a result, the number of
additional automobiles rendered to us by the ride-hailing drivers exiting the
business kept decreasing while the number of automobiles for operating leases
increased during the year ended march 31, 2022 as compared with the year ended
March 31, 2021. We had revenue of $1,722,480 from automobile rental and
$2,665,457 from online ride-hailing platform services during the year ended
March 31, 2022, which offset the negative impact of the decrease in our revenue
in automobile sales and facilitation of automobile transaction and financing.

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As we plan to focus more on our automobile rental and Online Ride-hailing
Platform Services business, we expect revenue from our Online Ride-hailing
Platform Services to keep stable and our revenue from automobile rental income
to increase over the next twelve months. We also expect them to continuously
account for a majority of our revenues. We plan to provide a series of product
solutions to increase the number of our automobiles for operating leases.

The following table shows the breakdown of revenues by source of revenue for the years ended March 31, 2022 and 2021:

                                                                For the Years Ended
                                                                     March 31,
                                                                2022           2021

Revenue from automotive transactions and related services $2,247,645 $1,285,586
– Operating rental income from car rental

             1,722,480    

224,590

- Service fees from NEVs leasing                                 126,227   

- Financing revenues                                             101,828   

184 115

- Service fees from automobile management and guarantee
services                                                          73,554   

79,565

- Service fees from automobile purchase services                   1,468   

188,822

- Revenues from sales of automobiles                              26,019   

487,947

- Other service fees                                             196,069   

120,547

Revenue from online ride-hailing platform services             2,665,457   
    903,254

Total Revenue                                                $ 4,913,102    $ 2,188,840

Revenue from automotive transactions and related services

Revenue from our automobile transaction and related services mainly includes
operating lease revenues from automobile rentals, service fees from NEVs
leasing, financing revenues (representing interest income from financial
leasing), service fees from automobile management and guarantee services, sales
revenue of automobiles, and other services fees, which accounted for
approximately 76.6%, 5.6%, 4.5%, 3.3%, 1.2% and 8.8%, respectively, of the total
revenue from automobile transaction and related services during the year ended
March 31, 2022. Meanwhile, sales revenue of automobiles, operating lease
revenues from automobile rentals, financing revenues, service fees from
automobile purchase services, service fees from automobile management and
guarantee services, and other services fees, which accounted for approximately
38.0%, 17.5%, 14.3%, 14.7%, 6.2% and 9.3%, respectively, of the total revenue
from Automobile Transaction and Related Services during the year ended March 31,
2021.

Operating rental income from automobile rental

We generate revenues from leasing our own automobiles, sub-leasing automobiles
leased from third-parties or rendered by online ride-hailing drivers with their
authorization for a lease term of no more than twelve months. The increase of
rental income was due to the increased number of leased automobiles. We leased
over 480 automobiles with an average monthly rental income of $485 per
automobile, resulting in a rental income of $1,722,480, for the year ended March
31, 2022. While we leased over 80 automobiles with an average monthly rental
income of $526 per automobile, resulting in a rental income of $224,590, for the
year ended March 31, 2021.

NEV Rental Service Fee

We generate revenues of $126,227 from leasing NEVs by charging leases service
fees during the year ended March 31, 2022 in accordance with the increasing
demand for NEVs in the online ride-hailing industry. The amount of services fees
for NEVs leasing is based on our product solutions. We did not have this kind of
revenue during the year ended March 31, 2021.

Financing income

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 $101,828 from an average
monthly number of 75 automobiles and $184,115 from an average monthly number of
89 automobiles during the year ended March 31, 2022 and 2021, respectively. The
decrease was further aggravated by the decrease in the monthly amortization of
interest income for automobiles leased in prior periods.

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Automobile Warranty and Management Services Service Fees

The majority of our customers are online ride-hailing drivers. They also entered
into affiliation service agreements with Hunan Ruixi in Changsha and Jinkailong
in Chengdu, pursuant to which Hunan Ruixi provides and Jinkailong provided them
post-transaction management services and guarantee services. The slight decrease
of $6,011 was due to there was no significant change in the accumulated number
of rendered automobiles which were subsequently rented to ride-hailing drivers
whom Hunan Ruixi charges rent rather than charging management and guarantee
services fee. Hunan Ruixi had management and guarantee services for over 210 and
230 automobiles during the year ended March 31, 2022 and 2021, respectively.

Auto Buying Services Service Fee

Service fees from automobile purchase services decreased by $187,354 during the
year ended March 31, 2022, mainly due to the decrease in the number of new
automobile purchases facilitated by Hunan Ruixi. Hunan Ruixi generates and
Jinkailong generated revenues from providing a series of automobile purchase
services throughout the automobile purchase transaction process. Hunan Ruixi had
revenue from only two new automobile transactions during the year ended March
31, 2022 while it serviced 62 new automobile transactions, including purchase,
financial leasing and operating leases, with service fees ranging from
approximately $140 to $3,550 per automobile during the year ended March 31,
2021.

Auto sales

As we have shifted our business focus to automobile leasing, we sold one new and
five used automobile with income of $26,019 during the year ended March 31,
2022. Meanwhile, we sold an aggregate of 36 new automobiles and earned income of
$487,947 during the year ended March 31, 2021.

Other service fees

We generate other revenues such as monthly services commissions from insurance
companies and other companies and other miscellaneous service fees charged to
our customers, which accounted for approximately 53.4% and 46.6% of revenues
from other service fees during the year ended March 31, 2022, respectively. The
commissions from insurance companies and other miscellaneous service fees
charged to the automobile purchasers, which accounted for approximately 78.3%,
and 21.7% of revenues from other service fees during the year ended March 31,
2021, respectively. Other service fees increased by $75,522 mainly due to the
increase of $70,711 in other miscellaneous service fees also increased in
accordance with the expansion of our operating lease.

Revenue from online carpooling platform services

We generate revenue from providing services to online ride-hailing drivers to
assist them in providing transportation service to the riders though our
platform and earn commissions for each completed order equal to the difference
between an upfront quoted fare and the amount earned by a driver based on actual
time and distance for the ride charged to the rider since October 2020. During
the year ended March 31, 2022, approximately 11.5 million rides with gross fare
of approximately $37.3 million were completed through our Xixingtianxia platform
and we earned online ride-hailing platform service fees of $2,665,457, netting
off approximately $3.4 million incentives paid to Active Drivers.

Revenue cost

Cost of revenues represents the amortization, daily maintenance and insurance
expense of automobiles leased to online ride-hailing drivers of $2,667,332,
technical service charges, insurance and other expenses of online ride-hailing
platform services of $3,806,143 and costs of automobiles sold of $37,556. Cost
of revenues increased by $4,526,952, or approximately 228%, during the year
ended March 31, 2022 as compared with last year, mainly due to the increase of
$2,463,990 in costs of automobiles under operating leases and $2,482,999 in
direct expense and technical service fees of Online Ride-hailing Platform
Services, respectively, as a result of the expansion of those two businesses,
partially offset by the decrease in costs of automobile sold of $420,036 as the
number of automobiles sold decreased from 36 to 6.

Gross profit (loss)

We had gross loss of $1,597,929 during the year ended March 31, 2022 as compared
with the gross profit of $204,761 in the last year mainly due to the decreased
number of automobile sales and facilitated new automobile purchases. The gross
loss from automobile

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rentals from operating lease was $944,852 during the year ended March 31, 2022
as compared with the gross profit of $21,478 in the last year. The main reason
was the Company leased and sub-leased approximately 400 automobiles to online
ride-haling drivers through its former VIE, Jinkailong during the year ended
March 31, 2022. The rental income amounted to approximately $1.3 million from
Jinkailong was eliminated in the consolidated financial statements while the
sub-leasing income from these automobiles of approximately $1.8 million was
recorded in the loss of discontinued operations. The gross loss from our Online
Ride-hailing Platform Services was $1,140,686, increased by $720,796 due to we
paid excess driver incentives to attractive drivers to our platform in the six
months ended September 30, 2022, especially from April to June 2021. Meanwhile,
the gross profit generated from sales of automobiles and other revenues with no
cost of revenues decreased by $115,565 during the year ended March 31, 2022 as
compared with the same period in 2021.

Selling, general and administrative expenses

Selling, general and administrative expenses primarily consist of salary and
employee benefits, office rental expense, travel expenses, and other costs.
Selling, general and administrative expenses increased from $5,905,579 for the
year ended March 31, 2021 to $9,525,408 for the year ended March 31, 2022,
representing an increase of $3,619,829, or approximately 61.3%. The increase was
attributable to more employees hired for business expansion for our new online
ride-hailing platform services, the daily operations of our automobile
transaction and related services business and the management of the increasing
number of automobiles for sublease. The increase mainly consists of an increase
of $1,510,876 in salary and employee benefits as the number of our employee
increased from 120 to 199, an increase of $945,974 in offices rental and
charges, an increase of $589,098 in advertising and promotion for the new online
ride-hailing platform services, an increase of $165,851 in amortization of
intangible assets and automobiles which were rendered to us but have not been
sub-leased as we leased more automobiles, an increase of $159,084 in
professional service fees such as financial, legal and market consulting, a
liquidated damages compensation of $161,250 for investors in November 2021
Private Placement Warrants and a slight increase of $87,696 in other
miscellaneous expenses during the year ended March 31, 20221 as compared with
the same period in last year.

Allowance for doubtful accounts

As a result of the fierce competition in the online ride-hailing markets in
Chengdu and Changsha, and the negative impact of COVID-19, additional 25 online
ride-hailing drivers we serviced rendered their automobiles to us for sublease
or sale during the year ended March 31, 2022, which decreased by 75 as compared
with the same period in 2021. We re-evaluated the possibility of collection of
unsettled balances from those drivers and provided additional allowance for
doubtful accounts of $123,744 for those receivables during the year ended March
31, 2022, decreased by $175,914 as compared with the same period in 2021.
Besides, the Company also recognized allowance of $111,536 for a historical
business cooperator who did not settle its balance on time.

Inventory write-downs

For the year ended March 31, 2022, we evaluated the net realizable value of our
inventories and recognized an impairment loss of $60,398 for certain automobiles
for sale based on their selling price in the market. For the year ended March
31, 2021, we did not recognized impairment for inventories.

Impairment of long-lived assets and Good will

For the year ended March 31, 2022, we evaluated the future cash flow of our
right-of-use assets and our own vehicles used for operating leases during their
remaining useful life and recognized an additional impairment loss of $3,044 for
those assets that could not generate sufficient cash. Meanwhile, we performed
impairment test on goodwill and fully recognized impairment of $139,930 against
goodwill. We recognized the impairment loss due to regulatory changes in the
online ride hailing industry, and forecast an insufficient future cashflow to
support the valuation of our goodwill. For the year ended March 31, 2021, we
recognized an impairment loss of $10,953 for certain right-of-use assets that
could not generate sufficient cash.

Other income (expenses), net

For the year ended March 31, 2022, we had other expenses, net of $107,444,
primarily consist of: (1) a donation by Hunan Ruixi of approximately $190,000
(RMB1,200,000) to a public welfare foundation in Changsha, China; (2) penalty
fines of $97,000 for our served online ride-hailing drivers who failed to obtain
the ride-hailing driver's licenses approximately; which was offset by (2) income
of approximately $198,000 from some leases. For the year ended March 31, 2021,
we had other income, net of $301,269, mainly as a result

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of the receipt of a government subsidy of $147,000 from Sichuan Economic and
Information Department for our initial public offering in 2018, and a special
support fund of $80,000 for government industrial development from Chengdu
Municipal people's Government.

Interest expense and interest expense on finance leases

Interest expense for the year ended March 31, 2022 has been $5,893resulting from Corenel’s borrowings from a financial institution for its installment commercial automobile insurance.

Interest expense on finance leases for the year ended March 31, 2022 was
$55,844, representing the interest expense accrued under financing leases for
the leased automobiles rendered to us for sublease or sale by the online
ride-hailing drivers who exited the ride-hailing business. Interest expense on
finance leases increased by $9,326, or approximately 20%, as compared with the
year ended March 31, 2021, mainly due to the weighted average number of rendered
automobiles during the year ended March 31, 2022 increased.

Change in fair value of derivative liabilities

Warrants issued in our registered direct offerings that took place in June 2019,
February 2021 and May 2021, and the August 2020 underwritten public offering
were classified as liabilities under the caption "Derivative Liabilities" in the
consolidated balance sheet and recorded at estimated fair value at each
reporting date, computed using the Black-Scholes valuation model. The change in
fair value of derivative liabilities the year ended March 31, 2022 was a gain of
$6,951,482 in total as our stock price as of March 31, 2022 was lower than the
price on March 31, 2021. The gain consists of a gain of $185,727 for the
warrants issued in our June 2019 registered direct offering, a gain of $352,944
for the warrants issued in our August 2020 underwritten public offering, a gain
of $572,018 for the warrants issued in our February 2021 registered direct
offering, a gain of $2,725,530 for the warrants issued in our May 2021
registered direct offering, and a gain of $3,115,263 for the warrants issued in
our November 2021 private placement.

The change in fair value of derivative liabilities for the year ended March 31,
2021 was a loss of $1,710,415 in total, mainly due to our stock price as of
March 31, 2021 was higher than the price on March 31, 2020, resulting a loss of
$1,372,966 for the warrants issued in our June 2019 registered direct offering,
a loss of $455,162 for the warrants issued in our August 2020 underwritten
public offering. It was offset by a gain of $117,713 for the warrants issued in
our February 2021 underwritten public offering.

Issuance costs for the issuance of Series A Convertible Preferred Shares

Issuance costs for the series A convertible preferred stock in our November 2021
private placement in connection with the placement agent warrants, placement
commission and other direct costs were expensed. Total issuance costs charged to
expense for the year ended March 31, 2022 were $821,892. Issuance costs
allocated to the series A convertible preferred (Mezzanie Equity) were recorded
as a reduction of the share balance.

Gain at the exit of a VIE

As fully described above, we terminated series of VIE agreements with other
shareholders of our former VIEs. We had a gain of $23,554 from the termination
of Youlu as it suffered loss during the year ended March 31, 2022. On March 23,
2022, Senmiao Consulting and other shareholders with 94.5% equity interests of
Sichuan Senmiao terminated the VIE Agreements and purchased Sichuan Senmiao's
94.5% equity interests with total consideration of zero. The gain of
non-controlling interest from acquired equity interest of Sichuan Senmiao
amounted to $366,604 was recognized in the consolidated statements of changes in
stockholders' equity.

Income Tax Expense

Generally, our subsidiaries and former VIEs in China are subject to enterprise
income tax on their taxable income in China at a rate of 25%. The enterprise
income tax is calculated based on the entity's global income as determined under
PRC tax laws and accounting standards. Income tax expense of $4,566 and $8,332
for the year ended March 31, 2022 and 2021, respectively, mainly represented the
provision of enterprise income tax resulting from the taxable income of $18,264
from Hunan Ruixi and $33,328 from Hunan Ruixi, and Yicheng, respectively.

Other subsidiaries in China incurred cumulative losses and no tax expense were
recorded.

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Net loss

As a result of the foregoing, net loss from our continuing operations for the
year ended March 31, 2022 was $5,606,145, representing a decrease of $1,869,280
from net loss of $7,475,425 for the year ended March 31, 2021.

Results of Discontinued Operations for the Year Ended March 31, 2022 Compared to
the Year Ended March 31, 2021

                                                          For the Years Ended
                                                               March 31,
                                                          2022            2021           Change
Revenues                                              $   6,830,116      3,978,847    $   2,851,269
Cost of revenues                                        (5,183,806)    (3,985,413)      (1,198,393)
Gross profit (loss)                                       1,646,310        (6,566)        1,652,876
Operating expenses
Selling, general and administrative expenses            (4,139,800)    (4,455,967)          316,167
Recovery of (Provision for) doubtful accounts              (11,746)        328,016        (339,762)
Impairments of long-lived assets                           (32,479)      (119,886)           87,407
Total operating expenses                                (4,184,025)    (4,247,837)           63,812
Loss from operations                                    (2,537,715)    (4,254,403)        1,716,688
Other income (expenses), net                                118,344      (191,916)          310,260
Interest expense                                           (50,472)       (47,916)          (2,556)
Interest expense on finance leases                        (277,366)      (686,684)          409,318
Loss before income taxes                                (2,747,209)    (5,180,919)        2,433,710
Income tax expenses                                               -        (6,295)            6,295
Loss from discontinued operations, net of
applicable income taxes                                 (2,747,209)    (5,187,214)        2,440,005
Net gain from deconsolidation of VIEs -
discontinued operations                                  10,975,101              -       10,975,101
Gain (loss) from discontinued operations              $   8,227,892    

(5,187,214) $304,678

The results of discontinued operations mainly consist of the financial figures of our former VIE, Jinkailong. Its trading result was included in our Automotive and Related Services Transaction before we deconsolidated its financial figures.

Revenue

Turnover for the year ended March 31, 2022 increased by $2,851,269i.e. approximately 71.7%, compared to the fiscal year ended March 31, 2021. The increase is mainly attributable to the increase in operating rental income. The following table shows the breakdown of revenues by source of revenue for the years ended March 31, 2022 and 2021:

                                                                For the Years Ended
                                                                     March 31,
                                                                2022           2021

Revenue from automotive transactions and related services (discontinued operations)

                                    $ 6,830,116    $ 3,971,694
- Operating lease revenues from automobile rentals             5,452,483   

3,207,781

- Commissions from online ride-hailing platforms                 399,600   

32,797

- Service fees from NEVs leasing                                 232,295   

- Service fees from automobile management and guarantee
services                                                         217,838   

206 248

- Financing revenues                                              15,855   

43,744

- Facilitation fees from automobile transactions                       -   

1,665

- Other service fees                                             512,045   

479 459

Revenue from Online Lending Services (discontinued
operations)                                                            -          7,153
- Transaction fee                                                      -          3,488
- Service and others fees                                              -          3,665
Total revenues from discontinued operations                  $ 6,830,116   
$ 3,978,847


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Revenue from Automotive Transactions and Related Services (discontinued operations)

Revenue from the automobile transaction and related services (discontinued
operations) mainly included operating lease revenues from automobile rentals,
commissions from online ride-hailing platforms, service fees from NEVs leasing,
service fees from automobile management and guarantee services, and other
revenues, which accounted for approximately 79.8%, 5.9%, 3.4%, 3.2% and 7.7%,
respectively, of the total revenue from discontinued operations during the year
ended March 31, 2022. Meanwhile, operating lease revenues from automobile
rentals, service fees from automobile management and guarantee services, and
other revenues accounted for 80.6%, 5.2% and 12.9%, respectively, of the total
revenue during the year ended March 31, 2021.

Operating rental income from automobile rental

Jinkailong generated revenues from leasing its own automobiles, sub-leasing
automobiles leased from other companies or from rendered by online ride-hailing
drivers with their authorization for a lease term of no more than twelve months.
The increase of rental income of $2,244,707 was due to the increased number of
leased automobiles. Jinkailong leased over 1,700 automobiles with an average
monthly rental income of $442 per automobile, resulting in a rental income of
$5,452,483, for the year ended March 31, 2022. Among them, approximately 400
automobiles were leased or sub-leased from Cornel, which brought rental income
of approximately $1.8 million to Jinkailong. And the leasing costs of
approximately $1.3 million was recorded as costs of revenue in the consolidated
financial statements. Jinkailong leased over 1,100 automobiles with an average
monthly rental income of $435 per automobile, resulting in a rental income of
$3,207,781, for the year ended March 31, 2021.

Commissions of online carpooling platforms

Jinkailong earned commissions from online ride-hailing platforms, such as
Meituan and XXTX for drivers serviced and introduced by Jinkailong, who ran
their business through these platforms. During the year ended March 21, 2022,
Jinkailong earned commissions of $399,600 from Meituan. Meanwhile, it earned
commissions of $553,760 from XXTX, which was eliminated in the loss of
discontinued operations of the consolidated financial statements. During the
year ended March 21, 2021, Jinkailong earned commissions of $32,797 from XXTX,
before our acquisition of XXTX.

NEV Rental Service Fee

Jinkailong generated revenues of $232,295 from leasing NEVs by charging leases
service fees during the year ended March 31, 2022 in accordance with the
increasing demand for NEVs in the online ride-hailing industry in Chengdu. The
amount of services fees for NEVs leasing is based on its product solutions.
Jinkailong did not have this kind of revenue during the year ended March 31,
2021.

Automobile Warranty and Management Services Service Fees

The majority of Jinkailong's customers were online ride-hailing drivers. They
also entered into affiliation service agreements with Jinkailong pursuant to
which Jinkailong provided them post-transaction management services and
guarantee services. The service fees from automobile management and guarantee
services remained stable mainly attributed because the average number of
automobiles which Jinkailong provided management and guarantee services for
remained stable during the year ended March 31, 2022 and 2021 as the number of
newly rendered automobiles did not increase significantly during the year ended
March 31, 2022.

Other service fees

Jinkailong generated other revenues such as monthly services commissions from
insurance companies, and other miscellaneous service fees charged to our
customers, which accounted for approximately 41.1 and 58.9% of revenues from
other service fees during the year ended March 31, 2022, respectively. The
commissions from insurance companies and other miscellaneous service fees
charged to the automobile purchasers, which accounted for approximately 77.7%,
and 22.3% of revenues from other service fees during the year ended March 31,
2021, respectively. Other service fees increased by $32,586 mainly due to the
increase of $194,743 of miscellaneous fees charged to leasees as Jinkailong
tightened the daily management of them. If was offset by the decrease of
$162,157 of commissions from insurance companies due to the unit commission for
used automobiles decreased as compared with the year ended March 31, 2021.

Revenue cost

Cost of revenues represents the amortization and depreciation, daily maintenance
and insurance expense, and rental costs of automobiles leased to online
ride-hailing drivers. Cost of revenues increased by $1,198,393, or approximately
30.1%, during the year

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ended March 31, 2022 as compared with the same period of 2021, mainly due to the
increase of $658,092 in daily maintenance and insurance expense as the average
insurance premium and maintenance costs increased for automobiles with longer
used ages. The rental costs increased by $341,434, mainly due to Jinkailong
leased approximately another 500 automobiles, including 400 from Cornel, to
expand leasing scale during the year ended March 31, 2022. Meanwhile, the rental
costs of approximately $1.3 million belong to Corenel was eliminated in the loss
of discontinued operations of the consolidated financial statements.
Amortization and depreciation increased by $198,867, due to the utilization of
rendered automobiles increased during the year ended March 31, 2022.

Selling, general and administrative expenses

Selling, general and administrative expenses primarily consist of salary and
employee benefits, office rental expense, travel expenses, and other costs.
Selling, general and administrative expenses decreased from $4,455,967 for the
year ended March 31, 2021 to $4,139,800 for the year ended March 31, 2022,
representing a decrease of $316,167, or approximately 7.1%. The decrease mainly
consists of a decrease of $880,375 in amortization of rendered automobiles. The
number of automobiles which were rendered to Jinkailong but have not been
sub-leased decreased as Jinkailong sub-leased more automobiles during the year
ended March 31, 2022 as compared with the same period in last year. The offices
rental and charges also decreased by $258,104 due to costs control, which was
offset by an increase of $822,312 in salary and employee benefits attributable
to more employees with higher salary hired for expansion for the rental
business.

Recovery of (Provision for) Doubtful Debts

Jinkailong re-evaluated the possibility of collection of unsettled balances from
additional 13 online ride-hailing drivers who rendered their automobiles and
provided additional allowance for doubtful accounts of $11,746 for those
receivables during the year ended March 31, 2022. While during year ended March
31, 2021, Jinkailong recovered allowance for doubtful accounts of $328,016 for
those receivables during the year ended March 31, 2021 as some drivers who
postpone the monthly installment at the beginning of year 2020 and repaid them
in the first half of the year ended March 31, 2021 as the online ride-hailing
market recovered since then. So Jinkailong re-evaluated and updated the
provision amount.

Impairment of long-lived assets

For the year ended March 31, 2022, Jinkailong evaluated the future cash flow of
our right-of-use assets and its own vehicles used for operating leases during
their remaining useful life and recognized an additional impairment loss of
$32,479 for those assets that could not generate sufficient cash. For the year
ended March 31, 2021, Jinkailong recognized an impairment loss of $119,886 for
certain right-of-use assets that could not generate sufficient cash.

Other income (expenses), net

For the year ended March 31, 2022, Jinkailong had other income, net of $118,344,
primarily consist of the penalty income amounted to $302,131 from some online
ride-hailing drivers for their violence on the contracts, which was offset by
expenditures of approximately $159,000 such as penalty fines for served drivers
who failed to obtain the ride-hailing driver's licenses. The increase of
$310,260 during the year ended March 31, 2022 as compared with the same period
in 2021, was mainly due to the increase in penalty income of $158,728, a
decrease of $79,927 in penalty fines and a $95,183 in guarantee expenses for
drivers who rendered their automobiles as a result of the improvement in the
daily management of drivers.

Interest expense and interest expense on finance leases

Interest expense for the year ended March 31, 2022 was $50,472, resulting from
the borrowings from financial institutions, which had no significant change as
compared with the same period in 2021.

Interest expense on finance leases for the year ended March 31, 2022 was
$277,366, representing the interest expense accrued under financing leases for
the leased automobiles rendered to Jinkailong for sublease or sale by the online
ride-hailing drivers who exited the ride-hailing business. Interest expense on
finance leases decreased by $409,318 as compared with the year ended March 31,
2021, mainly due to the number of rendered automobiles decreasing over 90%
during the year ended March 31, 2022, as well as the decrease in the number of
automobiles which were rendered to us but have not been sub-leased as we leased
more automobiles.

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Loss from discontinued operations, net of applicable income taxes

As a result of the foregoing, net loss from our discontinued operations, net of
applicable income taxes, for the year ended March 31, 2022 was $2,747,209,
representing a decrease of $2,440,005 from net loss of $5,187,214 for the year
ended March 31, 2021.

Net gain on deconsolidation of VIE – discontinued operations

As fully described above, we terminated series of VIE agreements with other
shareholders of our former VIEs. We had a gain of $10,951,545 from the
termination of Jinkailong due to its accumulated loss in historical period. We
had a gain of $23,556 from the termination of Youlu as it suffered loss during
the year ended March 31, 2022. On March 23, 2022, Senmiao Consulting and other
shareholders with 94.5% equity interests of Sichuan Senmiao terminated the VIE
Agreements and purchased Sichuan Senmiao's 94.5% equity interests with total
consideration of zero. The gain of non-controlling interest from acquired equity
interest of Sichuan Senmiao amounted to $366,604 was recognized in the
consolidated statements of changes in stockholders' equity. The detailed
analysis were in Note 3 to our consolidated financial statements.

Cash and capital resources

We have funded our operations primarily through proceeds from our equity offerings, shareholder loans, trade debt and cash flow from operations.

We had cash and cash equivalents of $1,185,221 as of March 31, 2022 as compared
to $4,340,529 as of March 31, 2021 for our continuing operations. We primarily
hold our excess unrestricted cash in short-term interest-bearing bank accounts
at financial institutions.

On May 13, 2021, we closed a registered direct offering of 5,531,916 shares of
our common stock at $1.175 per share, pursuant to a securities purchase
agreement with certain accredited investors. As a result, we raised
approximately $5.8 million, net of placement agent fees and offering expenses,
to support our working capital requirements.

On November 10, 2021, we completed a private placement of 5,000 shares of our
series A convertible preferred stock at $1,000 per share, pursuant to a
securities purchase agreement with certain institutional investor. As a result,
we raised approximately $4.4 million, net of placement agent fees and offering
expenses, to support our working capital requirements.

Our business is capital intensive. We have considered whether there is
substantial doubt about our ability to continue as a going concern due to (1)
net loss of approximately $5.6 million from continuing operations for the year
ended March 31, 2022; (2) accumulated deficit of approximately $34.9 million as
of March 31, 2022; (3) the working capital deficit of approximately $0.6 million
as of March 31, 2022; (4) net operating cash outflows of approximately $9.0
million and $0.1 million from continuing operations and discontinued operations,
respectively, for the year ended March 31, 2022; and (5) the purchase commitment
of approximately $1.7 million. As of March 31, 2022, we have entered into a
purchase contract with an automobile dealer to purchase a total of 200
automobiles for the amount of approximately $3.4 million. As of the date of this
Report, 100 automobiles of approximately $1.7 million have been purchased in
cash and delivered to us and the remaining purchase commitment of approximately
$1.7 million shall be completed with financing option through the dealer's
designated financial institutions.

We have determined that there is substantial doubt about our ability to continue as a going concern. If we are unable to generate significant revenue, we may be required to cease or reduce our operations. We try to mitigate going concern risk through the following sources:

? continue to seek equity financing to support our working capital;

? other sources of funding available (including debt) from PRC banks and other

financial institutions; and

? financial support and credit guarantee commitments from our related parties.


Based on the above considerations, we are of the opinion that we will probably
not have sufficient funds to meet its working capital requirements and debt
obligations as they become due one year from the date of this Report, if we are
unable to obtain additional financing. In addition, the maximum contingent
liabilities for automobile purchasers we would be exposed to was approximately
$0.8 million as of March 31, 2022, assuming all the automobile purchasers were
in default. There is no assurance that we will be successful

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in implementing the foregoing plans or that additional financial will be
available to us on commercially reasonable terms, or at all. There are a number
of factors that could potentially arise and undermine our plans, such as (i) the
impact of the COVID-19 pandemic on our business and areas of operations in
China; (ii) changes in the demand for our services; (iii) PRC government
policies; (iv) economic conditions in China and worldwide; (v) competitive
pricing in the automobile transaction and related service and ride-hailing
industries; (vi) changes in our relationships with key business partners;
(vii) that financial institutions in China may not able to provide continued
financial support to our customers; and (viii) the perception of PRC-based
companies in the U.S. capital markets. Our inability to secure needed financing
when required could require material changes to our business plans and could
have a material adverse effect on our viability and results of operations.
                                                                  For the Years Ended
                                                                       March 31,
                                                                 2022             2021
Net Cash Used in Operating Activities                        $ (9,159,281)    $ (3,936,067)
Net Cash Used in Investing Activities                          (3,477,125) 

(2,510,862)

Net Cash Provided by Financing Activities                        9,755,410 

10,259,777

Effect of Exchange Rate Changes on Cash and Cash
Equivalents                                                      (381,858) 

(208,800)

Cash and Cash Equivalents at Beginning of Period                 4,448,075 

844 027

Cash and Cash Equivalents at End of Period                       1,185,221 

4,448,075

Less: Cash and cash equivalents from discontinued
operations                                                               - 

(107,546)

Cash and cash equivalents from continuing operations, end
of years                                                     $   1,185,221 

$4,340,529

Cash flow from operating activities

For the year ended March 31, 2022, net cash used in operating activities was
$9,159,281, which consists of outflows of $9,036,114 from continuing operations
and $123,167 discontinued operations. While for the year ended March 31, 2021,
net cash used in operating activities was $3,936,067, which consists of
$3,196,138 from continuing operations and $739,929 from discontinued operations.

The total net cash used in operating activities from continuing operations
primarily comprised of the payment of salary and employee benefits of
$3,372,130, other operating costs of $5,505,972, and maintenance fees, insurance
and other costs for automobiles and related transactions of $5,697,763,
partially offset by revenue received of $4,905,648 and the net collection of
$634,103 on automobiles used for financial lease to be collected within the
lease terms. The increase of $5,839,976 in net cash used in operating activities
from continuing operations for the year ended March 31, 2022 was primarily
attributable to (1) decrease of $8,661,897 in the change of fair value of
derivative liabilities as our stock price is running below our stock warrant's
exercise price; (2) decrease of $2,500,975 in the change of accrued expenses and
other liabilities; (3) increase of $433,090 in the change of inventories; offset
by (4) decrease of $1, 869,280 in net loss; (5) increase of $1,481,087 in
depreciation and amortization of long-lived assets; (6) issuance cost for
issuing series A convertible preferred stock of $821,892 in November 2021
private placement; (7) decrease of $1,394,978 in the change of prepayments,
other receivables and other assets; and (8) increase of $192,419 in impairments
of inventories and long-lived assets.

For the year ended March 31, 2021net cash used in operating activities from discontinued operations was primarily the payment to investors of the discontinued P2P platform of $1.7 millionoffset by the net cash inflow of approximately $1.0 million for the year ended March 31, 2021.

Cash flow in investing activities

For the year ended March 31, 2022, we had net cash used in investing activities
of $3,477,125, which consisted of the net cash used in investing activities of
$3,365,915 from continuing operations and $111,210 from discontinued operations.
The majority net cash used in investing was for the purchase of automobiles for
operating lease purpose and expenditures on the licenses of online ride-hailing
platforms in different cities in China.

For the year ended March 31, 2021, we had net cash used in investing activities
of $2,510,862, which consisted of the net cash used in investing activities of
$2,310,697 from continuing operations and $200,165 from discontinued operations.
The majority net cash used in investing was for the purchase of automobiles
for
operating lease purpose.

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Cash flow from financing activities

For the year ended March 31, 2022, we had net cash provided by financing
activities of $9,755,410, which primarily consisted of: (1) total net proceeds
of approximately $5.8 million from our registered public offering in May 2021,
approximately $4.4 million from our private placement in November 2021, and
$22,015 from exercised warrants from investors, respectively; (2) borrowings
from a financial institution of $183,390, partially offset by (3) principal
payments made for finance lease liabilities of $433,611, and (4) repayments to
related parties and the financial institution of $157,374.

For the year ended March 31, 2021, we had net cash provided by financing
activities of $10,259,777, which primarily consisted of: (1) total net proceeds
of $11.8 million from our underwritten public offering in August 2020 and
registered public offering in February 2021; (2) $683,046 from exercised
warrants from investors, respectively; partially offset by (3) principal
payments made for finance lease liabilities of $2,230,765, (5) repayments to
related parties of $138,587; and (5) Net cash received from borrowings from
financial institutions of discontinued operations of $103,881.

Off-balance sheet arrangements

As of the date of this report, we have the following off-balance sheet arrangements that may have a future impact on our financial condition, revenues or expenses, results of operations and liquidity:

? Purchase commitments


On February 22, 2021, we entered into one purchase contract with an automobile
dealer to purchase a total of 200 automobiles for the amount of approximately
$3.4 million. Pursuant to the contract, we are required to purchase 100
automobiles in cash with the amount of approximately $1.7 million. The remaining
100 automobiles purchase commitment with the amount of approximately $1.7
million shall be completed with financing option through the dealer's designated
financial institutions. As of the date of this Report, 100 automobiles of the
contract signed in February 2021 have been purchased in cash and delivered to
us. As we are in process of getting approval from the dealer's designated
financial institutions in financing the 100 automobiles' purchase, there is no
clear timing schedule for completing the remaining purchase commitment with this
automobile dealer. However, we expect the purchase to be completed by December
31, 2022.

 ? Contingent Liabilities


Hunan Ruixi is exposed to credit risk as we are required by certain financial
institutions to provide guarantee on the lease/loan payments (including
principal and interests) of the automobile purchasers referred by us. As of
March 31, 2022, the maximum contingent liabilities Hunan Ruixi would be exposed
to was approximately $0.8 million, assuming all the automobile purchasers were
in default, which may cause an increase in guarantee expense and cash outflow in
financing activities. Besides, the maximum contingent liabilities our former
VIE, Jinkailong, would be exposed to was approximately $6.3 million, assuming
all the automobile purchasers were in default, which may cause an increase in
guarantee expense and cash outflow in its own financing activities. As Hunan
Ruixi holds 35% of equity interest of Jinkailong and has not made any
consideration towards to the investment, Hunan Ruixi will subject to the maximum
amount of RMB3.5 million (approximately $570,000) of which is equivalent to 35%
of liabilities in case Jinkailong is liquidated in accordance with PRC's company
registry compliance.

Inflation

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

Critical Accounting Policies

We prepare our consolidated financial statements in accordance with U.S GAAP.
These accounting principles require us to make judgments, estimates and
assumptions on the reported amounts of assets and liabilities at the end of each
fiscal period, and the reported amounts of revenues and expenses during each
fiscal period. We continually evaluate these judgments and estimates based on
our past experience, knowledge and assessments of current business and other
conditions, our expectations regarding the future based on available information
and assumptions.

The selection of critical accounting policies, judgments and other uncertainties affecting the application of those policies, and the sensitivity of reported results to changes in conditions and assumptions are factors that should be considered when reviewing our

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Financial state. We believe that the following accounting policies involve the most significant assumptions and estimates used in the preparation of our consolidated financial statements.

(a) Use of estimates

In presenting the consolidated financial statements in accordance with U.S.
GAAP, management make estimates and assumptions that affect the amounts reported
and related disclosures. Estimates, by their nature, are based on judgement and
available information. Accordingly, actual results could differ from those
estimates. On an ongoing basis, management reviews these estimates and
assumptions using the currently available information. Changes in facts and
circumstances may cause us to revise our estimates. we base our estimates on
past experience and on various other assumptions that are believed to be
reasonable, the results of which form the basis for making judgments about the
carrying values of assets and liabilities. Estimates are used when accounting
for items and matters including, but not limited to, revenue recognition,
residual values, lease classification and liabilities, finance lease
receivables, inventory obsolescence, right-of-use assets, determinations of the
useful lives and valuation of long-lived assets, estimates of allowances for
doubtful accounts and prepayments, estimates of impairment of long-lived assets
and goodwill, valuation of deferred tax assets, estimated fair value used in
business acquisitions, valuation of derivative liabilities, allocation of fair
value of derivative liabilities, issuance of common stock and warrants exercised
and other provisions and contingencies.

(b) 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 us. The
three levels of valuation hierarchy are defined as follows:

Level 1 The inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2Inputs 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 The inputs to the valuation method are unobservable and significant to fair value.

(c) Property and equipment


Property and equipment primarily consist of automobiles, leasehold improvements,
computers and other equipment, which is 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.

(d) Mezzanine equity (redeemable)

We evaluate our convertible preferred stock in accordance with ASU 2020-06, Debt
- Debt with Conversion and Other Options (Subtopic 470-20), and Derivatives and
Hedging - Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for
Convertible Instruments and Contracts in an Entity's Own Equity, to determine if
its convertible preferred stock should be treated as a liability or an equity.
As a result, the convertible preferred stock should be treated as an equity as
it did not meet the definition of liability instrument. In accordance with ASC
480-10-s99, the convertible preferred stock should be classified as a mezzanine
equity, since it contained a change of control redemption right feature which is
not solely within our control.

(e) Derivative liabilities

A contract is designated as an asset or a liability and is carried at fair value
on a company's balance sheet, with any changes in fair value recorded in a
company's results of operations. We then determine which options, warrants and
embedded features require liability accounting and records the fair value as a
derivative liability. The changes in the values of these instruments are shown
in the accompanying unaudited condensed consolidated statements of operations
and comprehensive loss as "change in fair value of derivative liabilities".
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(f) Revenue recognition

We recognize our revenue under 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 us 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 this fundamental principle, we apply the five steps defined by ASC 606: (i) identify the contract(s) with a customer; (ii) identify performance obligations in the contract; (iii) determine the price of the transaction; (iv) allocate the transaction price to the performance obligations of the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.

We account for a contract with a customer when the contract is committed in
writing, the rights of the parties, including payment terms, are identified, the
contract has commercial substance and consideration to collect is substantially
probable.

We have assessed the impact of the guidance by reviewing our existing customer
contracts and current accounting policies and practices to identify differences
that will result from applying the new requirements, including the evaluation of
its performance obligations, transaction price, customer payments, transfer of
control and principal versus agent considerations. Based on the assessment, we
concluded that there was no change to the timing and pattern of revenue
recognition for its current revenue streams in scope of ASC 606 and therefore
there was no material changes to our unaudited condensed consolidated financial
statements upon adoption of ASC 606.

Automotive transaction and related services

Operating lease revenues from automobile rentals - We generate revenue from
sub-leasing automobiles from some online ride-hailing drivers or leasing our own
automobiles. We recognize revenue wherein an automobile is transferred to the
lessee and the lessee has the ability to control the asset, is accounted for
under ASC Topic 842. Rental transactions are satisfied over the rental period.
Rental periods are short term in nature, generally are twelve months or less.

Financing revenues - Interest income from the lease arising from our sales-type
leases and bundled lease arrangements is recognized in financing revenues over
the lease term based on the effective rate of interest in the lease.

Service fees from management and guarantee services - Over 95% of our customers
are online ride-hailing drivers. The drivers sign affiliation agreements with
us, pursuant to which we provide them with management and guarantee services
during the affiliation period. Service fees for management and guarantee
services are paid by such automobile purchasers on a monthly basis for the
management and guarantee services provided during the affiliation period. We
recognize revenue over the affiliation period when performance obligations are
completed.

Sales of automobiles - We generate revenue from sales of automobiles to the
customers of Jinkailong and Hunan Ruixi. The control over the automobile is
transferred to the purchaser along with the delivery of automobiles. The amount
of the revenue is based on the sale price agreed by Hunan Ruixi or Jinkailong
and their customers. We recognize revenues when an automobile is delivered and
control is transferred to the purchaser. Accounts receivable related to the
revenue are being collected over 36 to 48 months. The interest component is
included in the non-current portion of the accounts receivable.

Service fees from NEVs leasing and automobile purchase services - Services fees
from NEVs leasing and automobile purchase services are paid by lessees who rent
new energy electric vehicles from us or automobile purchasers for a series of
the services provided to them throughout the purchase process such as credit
assessment, preparation of financing application materials, assistance with
closing of financing transactions, license and plate registration, payment of
taxes and fees, purchase of insurance, installment of GPS devices, ride-hailing
driver qualification and other administrative procedures. The amount of services
fees for NEVs leasing is based on the product solutions while these fees for
purchase is based on the sales price of the automobiles and relevant services
provided. We recognize revenue when all the services are completed and an
automobile is delivered to the purchaser at a point in time. Accounts receivable
related to the revenue from NEVs leasing is collected upon the NEVs are
delivered to lessees while accounts receivables from purchase services are being
collected over 36 to 48 months. The interest component is included in the
non-current portion of the accounts receivable.

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Revenue from online carpooling platform services

We generate revenue from providing services to online ride-hailing drivers
("Drivers") to assist them in providing transportation services to riders
("Riders") looking for taxi/ride-hailing services. We earn commissions for each
completed order in an amount 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. As a result, we bear a single performance obligation
in the transaction of connecting Drivers with Riders to facilitate the
completion of a successful transportation service for Riders. We recognize
revenue upon completion of a ride as the single performance obligation is
satisfied and we have the right to receive payment for the services rendered
upon the completion of the ride. We evaluate the presentation of revenue on a
gross or net basis based on whether we control the service provided to the Rider
and are the principal (i.e., "gross"), or we arrange for other parties to
provide the service to the Rider and are an agent (i.e., "net"). Since we are
not primarily responsible for ride-hailing services provided to Riders, nor do
we have inventory risk related to the services, we recognize revenue at net
basis.

Leases

We account for leases in accordance with ASC 842. The two primary accounting
provisions we use to classify transactions as sales-type or operating leases
are: (i) a review of the lease term to determine if it is for the major part of
the economic life of the underlying equipment (defined as greater than 75%); and
(ii) a review of the present value of the lease payments to determine if they
are equal to or greater than substantially all of the fair market value of the
equipment at the inception of the lease (defined as greater than 90%).
Automobiles included in arrangements meeting these conditions are accounted for
as sales-type leases. Interest income from the lease is recognized in financing
revenues over the lease term. Automobiles included in arrangements that do not
meet these conditions are accounted for as operating leases and revenue is
recognized over the term of the lease.

We exclude from the assessment of our rental income any tax imposed by a governmental authority that is both imposed and incidental to a specific revenue-generating transaction and collected from a customer.

We consider the economic life of most of automobile to be three to four years,
since this represents the most frequent contractual lease term for its
automobile and the automobile will be used for Didi driving services. We believe
three to four years is representative of the period during which the automobile
is expected to be economically usable, with normal service, for the purpose for
which it is intended.

A portion of our direct sales of automobile to end customers are made through
bundled lease arrangements which typically include automobile, services
(automobile purchase services, facilitation fees, and management and guarantee
services) and financing components where the customer pays a single negotiated
fixed minimum monthly payment for all elements over the contractual lease term.
Revenues under these bundled lease arrangements are allocated considering the
relative standalone selling prices of the lease and non-lease deliverables
included in the bundled arrangement and the financing components. Lease
deliverables include the automobile and financing, while the non-lease
deliverables generally consist of the services and repayment of advanced fees
made on behalf of its customers. We consider the fixed payments for purposes of
allocation to the lease elements of the contract. The fixed minimum monthly
payments are multiplied by the number of months in the contract term to arrive
at the total fixed lease payments that the customer is obligated to make over
the lease term. Amounts allocated to the automobile and financing elements are
then subjected to the accounting estimates under ASC 842 to ensure the values
reflect standalone selling prices. The remainder of any fixed payments are
allocated to non-lease elements (automobile purchase services, facilitation
fees, and management and guarantee services), for which these revenues are
recognized in a manner consistent with the guidance for service fees from
automobile purchase services, facilitation fees from automobile transactions,
and service fees from management and guarantee services as discussed above.

Our 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. We reassess our pricing
interest rates quarterly based on changes in the local prevailing rates in the
marketplace. As of March 31, 2022, our pricing interest rate was 6.0% per annum.

(g) Share-based awards


Share-based awards granted to our employees are measured at fair value on grant
date and share-based compensation expense is recognized (i) immediately at the
grant date if no vesting conditions are required, or (ii) using the accelerated
attribution method, net of

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estimated forfeitures, over the required period of service. The fair value of restricted shares is determined by reference to the fair value of the underlying shares.

At each date of measurement, we review internal and external sources of
information to assist in the estimation of various attributes to determine the
fair value of the share-based awards granted by us, including but not limited to
the fair value of the underlying shares, expected life, expected volatility and
expected forfeiture rates. We are required to consider many factors and make
certain assumptions during this assessment. If any of the assumptions used to
determine the fair value of the share-based awards changes significantly,
share-based compensation expense may differ materially in the future from that
recorded in the current reporting period.

(h) Leases


We account for leases in accordance with ASC 842. Beginning in the year ended
March 31, 2020, we entered into certain agreements as a lessor under which we
lease automobiles to short-term (usually under twelve months) car service
drivers. We also enter into certain agreements as a lessee to lease automobiles
and to conduct our automobiles rental operations. If any of the following
criteria are met, we classify the lease as a finance lease (as a lessee) or as a
direct financing or sales-type lease (both as a lessor):

? The lease transfers ownership of the underlying asset to the lessee at the end

the duration of the lease;

? The lease grants the lessee an option to purchase the underlying asset which the

The Company is reasonably certain to exercise;

The term of the lease is 75% or more of the remaining economic life of the ? underlying asset, unless the start date falls within the last 25% of the

economic life of the underlying asset;

? The present value of the sum of the rents is equal to or greater than 90% of the

fair value of the underlying asset; Where

? The underlying asset is of such a specialized nature that one would expect it to

have no use other than the lessor at the end of the term of the lease.

Leases that do not meet any of the above criteria are accounted for as operating leases.

We combine lease and non-lease components in its contracts under Topic 842, where permitted.

Finance and operating lease ROU assets and lease liabilities are recognized at
the commencement date based on the present value of lease payments over the
lease term. Since the implicit rate for our leases is not readily determinable,
we use our incremental borrowing rate based on the information available at the
commencement date in determining the present value of lease payments. The
incremental borrowing rate is the rate of interest that we would have to pay to
borrow, on a collateralized basis, an amount equal to the lease payments, in a
similar economic environment and over a similar term.

Lease terms used to calculate the present value of lease payments generally do
not include any options to extend, renew, or terminate the lease, as we do not
have reasonable certainty at lease inception that these options will be
exercised. We generally consider the economic life of its operating lease ROU
assets to be comparable to the useful life of similar owned assets. We have
elected the short-term lease exception; therefore, operating lease ROU assets
and liabilities do not include leases with a lease term of twelve months or
less. The leases generally do not provide a residual guarantee. The operating
lease ROU asset also excludes lease incentives. Lease expense is recognized on a
straight-line basis over the lease term.

We review the impairment of our ROU assets consistent with the approach applied
for our other long-lived assets. We review the recoverability of its long-lived
assets when events or changes in circumstances occur, indicating that the
carrying value of the asset may not be recoverable. The assessment of possible
impairment is based on its ability to recover the carrying value of the asset
from the expected undiscounted future pre-tax cash flows of the related
operations. We have elected to include the carrying amount of operating lease
liabilities in any tested asset group and include the associated operating lease
payments in the undiscounted future pre-tax cash flows.

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