14. RELATED PARTY TRANSACTIONS AND BALANCES

1. Related Party Balances

1) Accounts receivable, a related party

As of June 30, 2025 and March 31, 2025, accounts receivable from a related party amounted to $8,027 and $7,924, respectively, represented balance due from operating lease revenue recognized from Chengdu Laobing Chuxing Automobile Leasing Co., Ltd. (“Laobing”), a related party of the Company.

2) Prepayment, a related party

As of June 30, 2025 and March 31, 2025, the balance of prepayment to a related party represented automobile lease prepayment made by the Company to Jinkailong, the Company’s equity investee company, with amount of $0 and $22,662, respectively.

3) Due from related parties

As of June 30, 2025 and March 31, 2025, balances due from related parties from the Company’s operations were comprised of the following:

As of June 30, 2025, balances due from Jinkailong, the Company’s equity investee company, was $1,195,483, net of allowance for credit losses, of which, $1,111,726 is to be repaid over a period from July 2026 to December 2026, which was classified as due from a related party, net, non-current. The balances due from Jinkailong consist of outstanding balance of $797,317 as a result of Jinkailong’s deconsolidation on March 31, 2022 and $398,166 represents daily operation expenses paid by the Company’s subsidiary, Jiekai, on behalf of Jinkailong.

As of March 31, 2025, balances due from Jinkailong, the Company’s equity investee company, was $1,468,822, net of allowance for credit losses, of which, $1,386,139 is to be repaid over a period from April 2026 to December 2026, which was classified as due from a related party, net, non-current. The balances due from Jinkailong consist of outstanding balance of $998,036 as a result of Jinkailong’s deconsolidation on March 31, 2022 and $470,786 represents daily operation expenses paid by the Company’s subsidiary, Jiekai, on behalf of Jinkailong. 

Movement of allowance for credit losses due from Jinkailong for the three months ended June 30, 2025 and for year ended March 31, 2025 are as follows:

On January 3, 2024, Xiang Hu, the Legal Representative of Sichuan Senmiao and a shareholder of the Company, entered into a loan agreement wherein the Company agreed to provide an interest-free special reserve loan of $150,000 for a period of 12 months, which was extended for 12 months since January 3, 2025. As of June 30, 2025 and March 31, 2025, the outstanding balance was $80,203 and $81,098, respectively.

As of June 30, 2025 and March 31, 2025, balance of $8,376 and $8,268 due from Laobing represented a deposit for the Company leased automobiles from Laobing, respectively.

4) Due to related parties

5) Operating lease right-of-use assets - a related party and Operating lease liabilities - a related party

In November 2018, Hunan Ruixi entered into an office lease agreement with Hunan Dingchentai Investment Co., Ltd. (“Dingchentai”), a company where one of the Company’s independent directors serves as the legal representative and general manager. The original lease agreement with Dingchentai was terminated on July 1, 2019. The Company entered into another lease with Dingchentai on substantially similar terms on September 27, 2019, and a renewal lease contract was signed in June 2022 and June 2025, which extended the original lease to May 2027, with an annual rent of approximately $44,000, payable on a quarter basis.

2. Related Party Transactions

For the three months ended June 30, 2025 and 2024, the Company incurred $0 and $4,516, respectively, in rental expenses to Hong Li, supervisor of Sichuan Senmiao, pursuant to three office lease agreements.

For the three months ended June 30, 2025 and 2024, the Company incurred $10,228 and $10,350 in rental expenses, respectively, to Dingchentai, a company where one of the Company’s independent directors serves as the legal representative and general manager.

During the three months ended June 30, 2025, Jiekai leased automobiles to Laobing and generated revenue of $24,057. While during the three months ended June 30, 2024, Corenel leased automobiles to Jinkailong and generated revenue of $5,243, respectively.

During the three months ended June 30, 2025, Jiekai leased automobiles from Jinkailong, Corenel, Laobing and another related party, Sichuan Xindaoda Automobile Sales Service Co., Ltd. (“Xindaoda”), and had a rental cost of $2,097, $37,142, $19,079 and $1,321, respectively. While during the three months ended June 30, 2024, Jiekai leased automobiles from Jinkailong and had a rental cost of $1,627.