| CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY |
NOTE 22 — 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, 2026 and 2025, 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.
| | |
March 31, | | |
March 31, | |
| | |
2026 | | |
2025 | |
| ASSETS | |
| | |
| |
| Current assets | |
| | |
| |
| Cash | |
$ | 20,834 | | |
$ | 2,885,258 | |
| Amounts due from related parties | |
| 1,546,589 | | |
| 1,497,089 | |
| Other current assets | |
| - | | |
| 100,156 | |
| Intercompany receivable | |
| 3,062,100 | | |
| 3,564,119 | |
| Total current assets | |
| 4,629,523 | | |
| 8,046,622 | |
| | |
| | | |
| | |
| Non-current assets | |
| | | |
| | |
| Investment in subsidiaries and VIEs | |
| 5,950,770 | | |
| 7,032,153 | |
| | |
| | | |
| | |
| Total assets | |
$ | 10,580,293 | | |
$ | 15,078,775 | |
| | |
| | | |
| | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |
| | | |
| | |
| | |
| | | |
| | |
| Current liabilities | |
| | | |
| | |
| Convertible note payable | |
$ | 279,019 | | |
$ | 2,391,945 | |
| Derivative liability | |
| - | | |
| 2,032,530 | |
| Promissory note payable | |
| 1,314,864 | | |
| - | |
| Payroll payable | |
| 68,000 | | |
| 42,500 | |
| Amounts due to related parties | |
| 100 | | |
| 100 | |
| Accrued liabilities and other current liabilities | |
| 84,476 | | |
| 141,602 | |
| Total current liabilities | |
| 1,746,459 | | |
| 4,608,677 | |
| | |
| | | |
| | |
| Total liabilities | |
$ | 1,746,459 | | |
$ | 4,608,677 | |
| | |
| | | |
| | |
| COMMITMENTS AND CONTINGENCIES | |
| | | |
| | |
| | |
| | | |
| | |
| SHAREHOLDERS’ EQUITY | |
| | | |
| | |
| Class A ordinary share, par value $0.0016 per share, 112,500,000,000 shares authorized, 1,656,609 and 1,115,172 shares issued and outstanding as of March 31, 2026 and 2025, respectively* | |
| 2,650 | | |
| 1,784 | |
| 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, 2026 and 2025, respectively* | |
| 586 | | |
| 586 | |
| Additional paid-in capital | |
| 22,984,723 | | |
| 13,754,806 | |
| Accumulated deficits | |
| (13,745,259 | ) | |
| (2,422,343 | ) |
| Accumulated other comprehensive loss | |
| (408,866 | ) | |
| (864,735 | ) |
| Total shareholders’ equity | |
| 8,833,834 | | |
| 10,470,098 | |
| | |
| | | |
| | |
| Total liabilities and shareholders’ equity | |
$ | 10,580,293 | | |
$ | 15,078,775 | |
| * | 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 19). |
| | |
For the Years Ended | |
| | |
March 31, | |
| | |
2026 | | |
2025 | | |
2024 | |
| OPERATING EXPENSES | |
| | |
| | |
| |
| Selling expenses | |
$ | 552,204 | | |
$ | 2,256,284 | | |
$ | - | |
| General and administrative expenses | |
| 7,588,142 | | |
| 5,239,764 | | |
| - | |
| | |
| | | |
| | | |
| | |
| OTHER INCOME | |
| | | |
| | | |
| | |
| Interest expenses, net | |
| (140,836 | ) | |
| (67,043 | ) | |
| - | |
| Amortization of debt issuance costs | |
| (562,330 | ) | |
| (230,700 | ) | |
| - | |
| Gain (loss) on derivative liabilities | |
| 682,848 | | |
| (356,134 | ) | |
| - | |
| Other expenses | |
| (125,000 | ) | |
| - | | |
| - | |
| | |
| | | |
| | | |
| | |
| EQUITY IN EARNINGS (LOSS) OF SUBSIDIARIES AND VIES | |
$ | (3,037,252 | ) | |
$ | (2,648,393 | ) | |
$ | 8,652 | |
| | |
| | | |
| | | |
| | |
| NET (LOSS) INCOME | |
| (11,322,916 | ) | |
| (10,798,318 | ) | |
| 8,652 | |
| FOREIGN CURRENCY TRANSLATION ADJUSTMENTS | |
| 455,869 | | |
| (53,179 | ) | |
| (526,589 | ) |
| COMPREHENSIVE LOSS ATTRIBUTABLE TO THE COMPANY | |
$ | (10,867,047 | ) | |
$ | (10,851,497 | ) | |
$ | (517,937 | ) |
| | |
For the Years Ended | |
| | |
March 31, | |
| | |
2026 | | |
2025 | | |
2024 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | |
| | |
| | |
| |
| Net (loss) income | |
$ | (11,322,916 | ) | |
$ | (10,798,318 | ) | |
$ | 8,652 | |
| Adjustments to reconcile net cash flows used in operating activities: | |
| | | |
| | | |
| | |
| Stock-based compensation | |
| 1,493,208 | | |
| 2,672,450 | | |
| - | |
| Issuance of Class A Ordinary Share for services | |
| 4,936,667 | | |
| 3,643,333 | | |
| - | |
| Loss (gain) on derivative liabilities | |
| (682,848 | ) | |
| 356,134 | | |
| - | |
| Amortization of debt issuance cost | |
| 562,330 | | |
| 230,700 | | |
| - | |
| Accrued interest expense for convertible note payable | |
| 125,972 | | |
| 70,247 | | |
| - | |
| Accrued interest expense for promissory note payable | |
| 14,864 | | |
| - | | |
| - | |
| | |
| | | |
| | | |
| | |
| Changes in operating assets and liabilities: | |
| | | |
| | | |
| | |
| Other current assets | |
| 100,156 | | |
| (100,156 | ) | |
| - | |
| Payroll payable | |
| 25,500 | | |
| 42,500 | | |
| - | |
| Accrued expenses and other current liabilities | |
| (57,130 | ) | |
| 141,602 | | |
| - | |
| Equity in earnings of subsidiary and VIEs | |
| 3,037,252 | | |
| 2,648,393 | | |
| (8,652 | ) |
| Net cash used in operating activities | |
| (1,766,945 | ) | |
| (1,093,115 | ) | |
| - | |
| | |
| | | |
| | | |
| | |
| CASH FLOWS FROM INVESTING ACTIVITIES: | |
| | | |
| | | |
| | |
| Payments made to intercompany | |
| (997,979 | ) | |
| (3,168,580 | ) | |
| - | |
| Payments made to related parties | |
| (49,500 | ) | |
| (1,497,089 | ) | |
| - | |
| Net cash used in investing activities | |
| (1,047,479 | ) | |
| (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 | | |
| - | |
| Repayment of convertible note | |
| (1,350,000 | ) | |
| - | | |
| - | |
| Net proceeds from issuance of promissory note payable | |
| 1,300,000 | | |
| - | | |
| - | |
| Proceeds from loans from related parties | |
| - | | |
| 99 | | |
| - | |
| Net cash provided by (used in) financing activities | |
| (50,000 | ) | |
| 8,644,042 | | |
| - | |
| | |
| | | |
| | | |
| | |
| CHANGES IN CASH | |
| (2,864,424 | ) | |
| 2,885,258 | | |
| - | |
| | |
| | | |
| | | |
| | |
| CASH, beginning of year | |
| 2,885,258 | | |
| - | | |
| - | |
| | |
| | | |
| | | |
| | |
| CASH, end of year | |
$ | 20,834 | | |
$ | 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 | |
| Conversion of convertible notes and related accrued interest into Class A ordinary shares | |
$ | 2,800,908 | | |
$ | 439,575 | | |
| - | |
|