| CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY |
NOTE
20 — CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY
Rule
12-04(a), 5-04(c) and 4-08(e)(3) of Regulation S-X require the condensed financial information of the parent company to be filed when
the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently
completed fiscal year. The Company performed a test on the restricted net assets of consolidated subsidiaries in accordance with such
requirement and concluded that it was applicable to the Company as the restricted net assets of the Company’s PRC subsidiary and
the VIEs exceeded 25% of the consolidated net assets of the Company, therefore, the condensed financial statements for the parent company
are included herein.
For
purposes of the above test, restricted net assets of consolidated subsidiaries and the VIEs shall mean that amount of the Company’s
proportionate share of net assets of consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent
fiscal year may not be transferred to the parent company by subsidiaries and the VIEs in the form of loans, advances or cash dividends
without the consent of a third party.
The
condensed financial information of the parent company has been prepared using the same accounting policies as set out in the Company’s
consolidated financial statements except that the parent company used the equity method to account for investment in its subsidiaries
and VIEs. Such investment is presented on the condensed balance sheets as “Investment in subsidiaries and VIEs” and the respective
profit or loss as “Equity in earnings of subsidiaries and VIEs” on the condensed statements of comprehensive income.
The
footnote disclosures contain supplemental information relating to the operations of the Company and, as such, these statements should
be read in conjunction with the notes to the consolidated financial statements of the Company. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with U.S GAAP have been condensed or omitted.
The
Company did not pay any dividend for the periods presented. As of March 31, 2025 and 2024, there were no material contingencies, significant
provisions for long-term obligations, or guarantees of the Company, except for those which have been separately disclosed in the consolidated
financial statements, if any. PARENT
COMPANY BALANCE SHEETS
| | |
March 31, | | |
March 31, | |
| | |
2025 | | |
2024 | |
| ASSETS | |
| | |
| |
| Current assets | |
| | |
| |
| Cash | |
$ | 2,885,258 | | |
$ | — | |
| Amounts due from related parties | |
| 1,497,089 | | |
| — | |
| Other current assets | |
| 100,156 | | |
| — | |
| Intercompany receivable | |
| 3,564,119 | | |
| 1,008,708 | |
| Total current assets | |
| 8,046,622 | | |
| 1,008,708 | |
| | |
| | | |
| | |
| Non-current assets | |
| | | |
| | |
| Investment in subsidiaries and VIEs | |
| 7,032,153 | | |
| 9,733,725 | |
| | |
| | | |
| | |
| Total assets | |
$ | 15,078,775 | | |
$ | 10,742,433 | |
| | |
| | | |
| | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |
| | | |
| | |
| | |
| | | |
| | |
| Current liabilities | |
| | | |
| | |
| Convertible note payable | |
$ | 2,391,945 | | |
$ | — | |
| Derivative liability | |
| 2,032,530 | | |
| — | |
| Payroll payable | |
| 42,500 | | |
| — | |
| Amounts due to related parties | |
| 100 | | |
| — | |
| Accrued liabilities and other current liabilities | |
| 141,602 | | |
| — | |
| Total current liabilities | |
| 4,608,677 | | |
| — | |
| | |
| | | |
| | |
| Total liabilities | |
$ | 4,608,677 | | |
$ | — | |
| | |
| | | |
| | |
| COMMITMENTS AND CONTINGENCIES | |
| | | |
| | |
| | |
| | | |
| | |
| SHAREHOLDERS’ EQUITY | |
| | | |
| | |
| Class A ordinary share, par value $0.0016 per share, 112,500,000,000 shares authorized, 1,115,172 and 914,313 shares issued and outstanding as of March 31, 2025 and 2024, respectively* | |
| 1,784 | | |
| 1,463 | |
| Class B ordinary share, par value $0.0016 per share, 12,500,000,000 shares authorized, 366,000 shares issued and outstanding as of March 31, 2025 and 2024, respectively* | |
| 586 | | |
| 586 | |
| Additional paid-in capital | |
| 13,754,806 | | |
| 3,175,965 | |
| Retained earnings (accumulated deficits) | |
| (2,422,343 | ) | |
| 8,375,975 | |
| Accumulated other comprehensive loss | |
| (864,735 | ) | |
| (811,556 | ) |
| Total shareholders’ equity | |
| 10,470,098 | | |
| 10,742,433 | |
| | |
| | | |
| | |
| Total liabilities and shareholders’ equity | |
$ | 15,078,775 | | |
$ | 10,742,433 | |
| * | Retrospectively adjusted to reflect the authorized share
capital increase effective on January 8, 2026, 16-for-1 share consolidation effective on April 20, 2026, authorized share capital increase
effective on May 6, 2026 (see Note 21). |
PARENT
COMPANY STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
| | |
For the Years Ended | |
| | |
March 31, | |
| | |
2025 | | |
2024 | | |
2023 | |
| OPERATING EXPENSES | |
| | |
| | |
| |
| Selling expenses | |
$ | 2,256,284 | | |
$ | — | | |
$ | — | |
| General and administrative expenses | |
| 5,239,764 | | |
| — | | |
| — | |
| | |
| | | |
| | | |
| | |
| OTHER INCOME | |
| | | |
| | | |
| | |
| Interest expenses, net | |
| (67,043 | ) | |
| — | | |
| — | |
| Amortization of debt issuance costs | |
| (230,700 | ) | |
| — | | |
| — | |
| Loss on derivative liabilities | |
| (356,134 | ) | |
| — | | |
| — | |
| | |
| | | |
| | | |
| | |
| EQUITY IN EARNINGS (LOSS) OF SUBSIDIARIES AND VIES | |
$ | (2,648,393 | ) | |
$ | 8,652 | | |
$ | 477,689 | |
| | |
| | | |
| | | |
| | |
| NET INCOME (LOSS) | |
| (10,798,318 | ) | |
| 8,652 | | |
| 477,689 | |
| FOREIGN CURRENCY TRANSLATION ADJUSTMENTS | |
| (53,179 | ) | |
| (526,589 | ) | |
| (790,166 | ) |
| COMPREHENSIVE LOSS ATTRIBUTABLE TO THE COMPANY | |
$ | (10,851,497 | ) | |
$ | (517,937 | ) | |
$ | (312,477 | ) |
PARENT
COMPANY STATEMENTS OF CASH FLOWS
| | |
For the Years Ended | |
| | |
March 31, | |
| | |
2025 | | |
2024 | | |
2023 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | |
| | |
| | |
| |
| Net income (loss) | |
$ | (10,798,318 | ) | |
$ | 8,652 | | |
$ | 477,689 | |
| Adjustments to reconcile net cash flows used in operating activities: | |
| | | |
| | | |
| | |
| Stock-based compensation | |
| 2,672,450 | | |
| — | | |
| — | |
| Issuance of Class A Ordinary Share for services | |
| 3,643,333 | | |
| — | | |
| — | |
| Amortization of debt issuance costs | |
| 356,134 | | |
| — | | |
| — | |
| Accrued interest expense for convertible notes | |
| 230,700 | | |
| — | | |
| — | |
| Debt restructuring loss | |
| 70,247 | | |
| — | | |
| — | |
| | |
| | | |
| | | |
| | |
| Changes in operating assets and liabilities: | |
| | | |
| | | |
| | |
| Other current assets | |
| (100,156 | ) | |
| — | | |
| — | |
| Payroll payable | |
| 42,500 | | |
| — | | |
| — | |
| Accrued expenses and other current liabilities | |
| 141,602 | | |
| — | | |
| — | |
| Equity in earnings of subsidiary and VIEs | |
| 2,648,393 | | |
| (8,652 | ) | |
| (477,689 | ) |
| Net cash used in operating activities | |
| (1,093,115 | ) | |
| — | | |
| — | |
| | |
| | | |
| | | |
| | |
| CASH FLOWS FROM INVESTING ACTIVITIES: | |
| | | |
| | | |
| | |
| Payments made to intercompany | |
| (3,168,580 | ) | |
| — | | |
| — | |
| Payments made to related parties | |
| (1,497,089 | ) | |
| — | | |
| — | |
| Net cash used in investing activities | |
| (4,665,669 | ) | |
| — | | |
| — | |
| | |
| | | |
| | | |
| | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | |
| | | |
| | | |
| | |
| Net proceeds from initial public offerings, net of issuance costs | |
| 4,436,973 | | |
| — | | |
| — | |
| Net proceeds from issuance of convertible note | |
| 4,206,970 | | |
| — | | |
| — | |
| Proceeds from loans from related parties | |
| 99 | | |
| — | | |
| — | |
| Net cash provided by financing activities | |
| 8,644,042 | | |
| — | | |
| — | |
| | |
| | | |
| | | |
| | |
| CHANGES IN CASH AND CASH EQUIVALENTS | |
| 2,885,258 | | |
| — | | |
| — | |
| | |
| | | |
| | | |
| | |
| CASH AND CASH EQUIVALENTS, beginning of year | |
| — | | |
| — | | |
| — | |
| | |
| | | |
| | | |
| | |
| CASH AND CASH EQUIVALENTS, end of year | |
$ | 2,885,258 | | |
$ | — | | |
$ | — | |
| | |
| | | |
| | | |
| | |
| SUPPLEMENTAL NON-CASH FINANCING ACTIVITY: | |
| | | |
| | | |
| | |
| Increase of intercompany receivables due to Subsidiaries and VIEs collection of proceeds of issuance of Class A securities on behalf of the parent company | |
$ | — | | |
$ | 458,341 | | |
$ | 548,367 | |
|