| DISCONTINUED OPERATIONS |
4. DISCONTINUED OPERATIONS Discontinued operations – Online ride-hailing platform service Since August 2024, the Company has discontinued its online ride-hailing platform service business. The following table sets forth the reconciliation of the amounts of major classes of income and losses from discontinued operations of online ride-hailing platform service in the unaudited condensed consolidated statements of operations and comprehensive loss for the three and nine months ended December 31, 2025 and 2024. | | | For the Three Months Ended | | | For the Nine Months Ended | | | | | December 31, | | | December 31, | | | | | 2025 | | | 2024 | | | 2025 | | | 2024 | | | | | (unaudited) | | | (unaudited) | | | (unaudited) | | | (unaudited) | | | Revenues | | $ | — | | | $ | — | | | $ | — | | | $ | 344,241 | | | Cost of revenues | | | — | | | | — | | | | — | | | | (247,025 | ) | | Gross profit | | | — | | | | — | | | | — | | | | 97,216 | | | Operating expenses | | | | | | | | | | | | | | | | | | Selling, general and administrative expenses | | | — | | | | — | | | | — | | | | (166,937 | ) | | Provision for credit losses | | | — | | | | — | | | | — | | | | (173,278 | ) | | Total operating expenses | | | — | | | | — | | | | — | | | | (340,215 | ) | | Loss from operations | | | — | | | | — | | | | — | | | | (242,999 | ) | | Other income, net | | | — | | | | — | | | | — | | | | 33,214 | | | Interest expense | | | — | | | | — | | | | — | | | | (8,372 | ) | | Loss before income taxes | | | — | | | | — | | | | — | | | | (218,157 | ) | | Gain on disposal of discontinued operations | | | | | | | | | | | | | | | 397,775 | | | Income tax benefit | | | — | | | | — | | | | — | | | | 4,510 | | | Net income from discontinued operations | | $ | — | | | $ | — | | | $ | — | | | $ | 184,128 | | Reconciliation of the amount of cash flows from discontinued operations in the unaudited condensed consolidated statements of cash flows for the nine months ended December 31, 2025 and 2024 are as follows: | | | For the Nine Months Ended December 31, | | | | | 2025 | | | 2024 | | | | | (Unaudited) | | | (Unaudited) | | | Net cash used in operating activities from discontinued operations | | $ | — | | | $ | (73,441 | ) | | | | | | | | | | | | Net cash provided by investing activities from discontinued operations | | $ | — | | | $ | 49 | | | | | | | | | | | | | Net cash used in financing activities from discontinued operations | | $ | — | | | $ | (82,074 | ) | Discontinued operations - Automobile Transaction related Services in Sichuan Prior to December 31,2025, the Company used to operate automobile transaction related services in Sichuan Province, China through Yicheng, Senmiao Consulting and its subsidiaries. In December 2025, the Company entered into the Sichuan Acquisition Agreement with HMST. Pursuant to the Sichuan Acquisition Agreement, the Company sold 100% of the equity interests in each of Yicheng and Senmiao Consulting to HMST for nil consideration, while the Company undertook certain liabilities of $518,388 which were previously assumed by the Disposed Entities. On December 31, 2025, the Disposition was completed and the Company disposed its 100% equity interest in Disposed Entities. After the disposition, the Company discontinued its operations in Sichuan Province in China. This decision was driven by recurring losses in Sichuan regional business area, which prompted the Company to strategically exit from its operations in Sichuan Province. In connection with this Disposition, the long-term accumulation of local resources, industry reputation and market reputation of Yicheng, Senmiao Consulting and its subsidiaries in Sichuan can promote HMST quickly enter the local market, connect channels and partners, and reduce market development costs; at the same time, HMST can rationally utilize its mature entities and basic assets to reduce new establishment and operating costs. In accordance with ASC 205-20-45, the discontinuation of automobile transaction related services in Sichuan was accounted for as a discontinued operation, as it represented a strategic shift with a significant impact on the Company’s overall operations and financial results. Reconciliation of the carrying amounts of major classes of assets and liabilities from discontinued operations of Yicheng, Senmiao Consulting and its subsidiaries in consolidated balance sheet as of March 31, 2025 are as follows: | | | March 31,
2025 | | | | | (Unaudited) | | | ASSETS | | | | | Current assets | | | | | Cash and cash equivalents | | $ | 132,275 | | | Accounts receivable | | | 12,164 | | | Accounts receivable, a related party | | | 7,924 | | | Prepayments, other receivables, and other current assets, net | | | 233,497 | | | Prepayment - a related party | | | 22,662 | | | Due from related parties, net, current | | | 90,951 | | | Total current assets | | | 499,473 | | | | | | | | | Other Assets | | | | | | Property and equipment, net | | | 2,934 | | | Financing lease right-of-use assets, net | | | 117,867 | | | Due from a related party, net, non-current | | | 964,075 | | | Total other assets | | | 1,084,876 | | | | | | | | | Total assets | | $ | 1,584,349 | | | | | | | | | LIABILITIES | | | | | | Current liabilities | | | | | | Accounts payable | | $ | 38,761 | | | Advances from customers | | | 20,726 | | | Income tax payable | | | 19,918 | | | Accrued expenses and other liabilities | | | 2,504,673 | | | Due to related parties | | | 179,017 | | | Financing lease liabilities, current | | | 360,268 | | | Total current liabilities | | | 3,123,363 | | | | | | | | | Total liabilities | | $ | 3,123,363 | | The following table sets forth the reconciliation of the amounts of major classes of income and losses from discontinued operations of Yicheng, Senmiao Consulting and its subsidiaries in the unaudited condensed consolidated statements of operations and comprehensive loss for the three and nine months ended December 31, 2025 and 2024. | | | For the Three Months Ended | | | For the Nine Months Ended | | | | | December 31, | | | December 31, | | | | | 2025 | | | 2024 | | | 2025 | | | 2024 | | | | | (unaudited) | | | (unaudited) | | | (unaudited) | | | (unaudited) | | | Revenues | | $ | 411,374 | | | $ | 468,389 | | | $ | 1,346,873 | | | $ | 1,068,487 | | | Cost of revenues | | | (280,098 | ) | | | (397,931 | ) | | | (919,715 | ) | | | (998,143 | ) | | Gross profit | | | 131,276 | | | | 70,458 | | | | 427,158 | | | | 70,344 | | | Operating expenses | | | | | | | | | | | | | | | | | | Selling, general and administrative expenses | | | (265,090 | ) | | | (103,096 | ) | | | (928,071 | ) | | | (479,145 | ) | | Provision for credit losses | | | (311,752 | ) | | | (262,545 | ) | | | (253,942 | ) | | | (523,316 | ) | | Total operating expenses | | | (576,842 | ) | | | (365,641 | ) | | | (1,182,013 | ) | | | (1,002,461 | ) | | Loss from operations | | | (445,566 | ) | | | (295,183 | ) | | | (754,855 | ) | | | (932,117 | ) | | Other income (expenses), net | | | (1,744 | ) | | | (27,335 | ) | | | 226,101 | | | | (18,751 | ) | | Interest expense on finance leases | | | — | | | | (3,365 | ) | | | (615 | ) | | | (12,723 | ) | | Loss before income taxes | | | (447,310 | ) | | | (325,883 | ) | | | (529,369 | ) | | | (963,591 | ) | | Gain on disposal of discontinued operations* | | | 426,766 | | | | — | | | | 426,766 | | | | — | | | Income tax expenses | | | — | | | | — | | | | — | | | | — | | | Net loss from discontinued operations | | $ | (20,544 | ) | | $ | (325,883 | ) | | $ | (102,603 | ) | | $ | (963,591 | ) | | * | As of December 31, 2025, net deficit from discontinued operations of Yicheng, Senmiao Consulting and its subsidiaries was $1,419,775. Together with the realized accumulated other comprehensive loss upon disposal of Yicheng, Senmiao Consulting and its subsidiaries and the loss of $518,388 from assuming debts, the Company recorded a total gain of $426,766 on disposal of Yicheng, Senmiao Consulting and its subsidiaries. | Reconciliation of the amount of cash flows from discontinued operations in the unaudited condensed consolidated statements of cash flows for the nine months ended December 31, 2025 and 2024 are as follows: | | | For the Nine Months Ended
December 31, | | | | | 2025 | | | 2024 | | | | | (Unaudited) | | | (Unaudited) | | | Net cash (used in) provided by operating activities from discontinued operations | | $ | (465,097 | ) | | $ | 302,887 | | | | | | | | | | | | | Net cash used in investing activities from discontinued operations | | $ | — | | | $ | (464,643 | ) | | | | | | | | | | | | Net cash provided by (used in) financing activities from discontinued operations | | $ | 80,100 | | | $ | (15,326 | ) |
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