COMMITMENTS AND CONTINGENCIES	6 Months Ended
Sep. 30, 2020
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES	17. COMMITMENTS AND CONTINGENCIES Purchase Commitments From October 1, 2020 through the issuance date of these financial statements, the Company entered into a contract with an automobile dealer for the purchase of a total of 20 automobiles for an aggregate purchase price of approximately $312,000. The purchase is expected to be completed by the end of 2020. Contingencies In measuring the credit risk of guarantee services to automobile purchasers, the Company primarily reflects the “probability of default” by the automobile purchasers on its contractual obligations and considers the current financial position of the automobile purchasers and its likely future development. The Company manages the credit risk of automobile purchasers by performing preliminary credit checks of each automobile purchaser and ongoing monitoring every month. By using the current credit loss model, management is of the opinion that the Company is bearing the credit risk to repay the principal and interests to the financial institutions if automobile purchasers default on their payments for more than three months. Management also periodically re-evaluates probability of default of automobile purchasers to make adjustments in the allowance when necessary as the Company is the guarantor of the loans. Contingent liabilities for automobile purchasers Historically, most of the automobile purchasers would pay the Company their previous defaulted amounts within one to three months. In December 2019, a novel strain of coronavirus, or COVID-19, surfaced and it has spread rapidly to many parts of China and other parts of the world, including the United States. The epidemic has resulted in quarantines, travel restrictions, and the temporary closure of stores and facilities in China and elsewhere. Because substantially all of the Company’s operations are conducted in China, the COVID-19 outbreak has materially and adversely affected, and may continue to affect, the Company’s business operations, financial condition and operating results for 2020, including but not limited to decrease in revenues, slower collection of accounts receivables and additional allowance for doubtful accounts. Some of the Company’s customers exited the ride-hailing business and tendered their automobiles to the Company for sublease or sale to generate income or proceeds to cover payments owed to financial institutions and the Company. For the three and six months ended September 30, 2020, the Company recognized an estimated provisions loss of approximately $83,000 and $102,000, respectively for the guarantee services because the drivers who exited the ride-hailing business were not able to make the monthly payments. As of September 30, 2020, the maximum contingent liabilities the Company would be exposed to was approximately $16,159,000 (including approximately $283,000 related to the discontinued P2P business), assuming all the automobile purchasers were in default. Automobiles are used as collateral to secure the payment obligations of the automobile purchasers under the financing agreements. The Company estimated the fair market value of the collateral to be approximately $11,752,000 as of September 30, 2020, based on the market price and the useful life of such collateral, which represents about 72.7% of the maximum contingent liabilities. As of September 30, 2020, approximately $2,599,000, including interests of $156,000, due to financial institutions, of all the automobile purchases we serviced were past due mainly due to the COVID-19 epidemic in China. Contingent liability of Jinkailong On October 14, 2020, the fund in the bank accounts of Jinkailong, with a balance of RMB175,335 (approximately $25,050), was frozen by the People's Court of Sichuan Pilot Free Trade Zone (the “Court”) and became restricted cash due to the default of Langyue Automobile Services Company (“Langyue”), a prior business partner whom Jinkailong provided a guarantee to. On May 25, 2018, Chengdu Industrial Impawn Co., Ltd (“Impawn”) signed a pledge and pawn contract (the “Master Contact”) with Langyue, pursuant to which, Impawn shall provide loans to Langyue up to RMB20 million (approximately $2.9 million). In connection with the Master Contract, Jinkailong entered into a guaranty with Impawn and agreed to provide guarantee on all the payments (including principal, interests, compensations and other expenses) of Langyue jointly and severally with seven other guarantors, one of which is a shareholder of Jinkailong. Langyue used RMB7,019,652 (approximately $1,003,000) of the loans from Impawn and re-loaned it to automobile purchasers referred by Jinkailong from June 2018 to September 2018, which were also guaranteed by Jinkailong. Langyue did not pay Impawn the monthly installment of June 2020 timely. In July 2020, Impawn sent the Collection Letter and Notice to Langyue to demand payment of the interest and penalty of RMB100,300 (approximately $14,330). On September 18, 2020, Impawn initiated a legal action in front of the Court for an order to collect and enforce the repayment of the total outstanding principals, interest and penalty for an aggregate of RMB9,992,728 (approximately $1,428,000) and other expenses by freezing all bank accounts of the Langyue and all related guarantors. On October 14, 2020, the cash in the bank of Jinkailong, with total amount of RMB175,335 (approximately $25,050) were frozen by the Court and became restricted cash accordingly. As of September 30, 2020, the maximum contingent liabilities related to the loans from Langyue to automobile purchasers which Jinkailong would be exposed to was RMB2,832,131 (approximately $407,450), which has been included in the amount of contingent liabilities or automobile purchasers as mentioned above. However, as Jinkailong has undertaken the joint and several liability guarantee for all of Langyue’s loan from Impawn, Jinkailong may be required to pay all the outstanding balance of $1,428,000 to Impawn in the future. Considering that the negotiation between Jinkailong and Impawn is still in progress, there are seven other guarantees for the loan, and no further reply nor action from Impawn and the Court, the contingent liabilities cannot be reasonably estimated by the Company as of the issuance date of these unaudited condensed consolidated financial statements. As of November 19, 2020, the restricted cash of Jinkailong was RMB502,855 (approximately $75,863). The Company has taken a series of actions to lower the potential negative impact on the operating of Jinkailong and expects to finalize the solution and release the restricted cash before December 31, 2020. From time to time, the Company may be subject to certain legal proceedings, claims and disputes that arise in the ordinary course of business. Except the contingent liabilities for Langyue, other amounts accrued, as well as the total amount of reasonable possible losses with the respect to such matters, individually and in the aggregate, are not deemed to be material to the interim unaudited condensed consolidated financial statements.

17. COMMITMENTS AND CONTINGENCIES

Purchase Commitments

From October 1, 2020 through the issuance date of these financial statements, the Company entered into a contract with an automobile dealer for the purchase of a total of 20 automobiles for an aggregate purchase price of approximately $312,000. The purchase is expected to be completed by the end of 2020.

Contingencies

In measuring the credit risk of guarantee services to automobile purchasers, the Company primarily reflects the “probability of default” by the automobile purchasers on its contractual obligations and considers the current financial position of the automobile purchasers and its likely future development.

The Company manages the credit risk of automobile purchasers by performing preliminary credit checks of each automobile purchaser and ongoing monitoring every month. By using the current credit loss model, management is of the opinion that the Company is bearing the credit risk to repay the principal and interests to the financial institutions if automobile purchasers default on their payments for more than three months. Management also periodically re-evaluates probability of default of automobile purchasers to make adjustments in the allowance when necessary as the Company is the guarantor of the loans.

Contingent liabilities for automobile purchasers

Historically, most of the automobile purchasers would pay the Company their previous defaulted amounts within one to three months. In December 2019, a novel strain of coronavirus, or COVID-19, surfaced and it has spread rapidly to many parts of China and other parts of the world, including the United States. The epidemic has resulted in quarantines, travel restrictions, and the temporary closure of stores and facilities in China and elsewhere. Because substantially all of the Company’s operations are conducted in China, the COVID-19 outbreak has materially and adversely affected, and may continue to affect, the Company’s business operations, financial condition and operating results for 2020, including but not limited to decrease in revenues, slower collection of accounts receivables and additional allowance for doubtful accounts. Some of the Company’s customers exited the ride-hailing business and tendered their automobiles to the Company for sublease or sale to generate income or proceeds to cover payments owed to financial institutions and the Company. For the three and six months ended September 30, 2020, the Company recognized an estimated provisions loss of approximately $83,000 and $102,000, respectively for the guarantee services because the drivers who exited the ride-hailing business were not able to make the monthly payments.

As of September 30, 2020, the maximum contingent liabilities the Company would be exposed to was approximately $16,159,000 (including approximately $283,000 related to the discontinued P2P business), assuming all the automobile purchasers were in default. Automobiles are used as collateral to secure the payment obligations of the automobile purchasers under the financing agreements. The Company estimated the fair market value of the collateral to be approximately $11,752,000 as of September 30, 2020, based on the market price and the useful life of such collateral, which represents about 72.7% of the maximum contingent liabilities. As of September 30, 2020, approximately $2,599,000, including interests of $156,000, due to financial institutions, of all the automobile purchases we serviced were past due mainly due to the COVID-19 epidemic in China.

Contingent liability of Jinkailong

On October 14, 2020, the fund in the bank accounts of Jinkailong, with a balance of RMB175,335 (approximately $25,050), was frozen by the People's Court of Sichuan Pilot Free Trade Zone (the “Court”) and became restricted cash due to the default of Langyue Automobile Services Company (“Langyue”), a prior business partner whom Jinkailong provided a guarantee to.

On May 25, 2018, Chengdu Industrial Impawn Co., Ltd (“Impawn”) signed a pledge and pawn contract (the “Master Contact”) with Langyue, pursuant to which, Impawn shall provide loans to Langyue up to RMB20 million (approximately $2.9 million). In connection with the Master Contract, Jinkailong entered into a guaranty with Impawn and agreed to provide guarantee on all the payments (including principal, interests, compensations and other expenses) of Langyue jointly and severally with seven other guarantors, one of which is a shareholder of Jinkailong. Langyue used RMB7,019,652 (approximately $1,003,000) of the loans from Impawn and re-loaned it to automobile purchasers referred by Jinkailong from June 2018 to September 2018, which were also guaranteed by Jinkailong.

Langyue did not pay Impawn the monthly installment of June 2020 timely. In July 2020, Impawn sent the Collection Letter and Notice to Langyue to demand payment of the interest and penalty of RMB100,300 (approximately $14,330). On September 18, 2020, Impawn initiated a legal action in front of the Court for an order to collect and enforce the repayment of the total outstanding principals, interest and penalty for an aggregate of RMB9,992,728 (approximately $1,428,000) and other expenses by freezing all bank accounts of the Langyue and all related guarantors. On October 14, 2020, the cash in the bank of Jinkailong, with total amount of RMB175,335 (approximately $25,050) were frozen by the Court and became restricted cash accordingly.

As of September 30, 2020, the maximum contingent liabilities related to the loans from Langyue to automobile purchasers which Jinkailong would be exposed to was RMB2,832,131 (approximately $407,450), which has been included in the amount of contingent liabilities or automobile purchasers as mentioned above. However, as Jinkailong has undertaken the joint and several liability guarantee for all of Langyue’s loan from Impawn, Jinkailong may be required to pay all the outstanding balance of $1,428,000 to Impawn in the future. Considering that the negotiation between Jinkailong and Impawn is still in progress, there are seven other guarantees for the loan, and no further reply nor action from Impawn and the Court, the contingent liabilities cannot be reasonably estimated by the Company as of the issuance date of these unaudited condensed consolidated financial statements. As of November 19, 2020, the restricted cash of Jinkailong was RMB502,855 (approximately $75,863). The Company has taken a series of actions to lower the potential negative impact on the operating of Jinkailong and expects to finalize the solution and release the restricted cash before December 31, 2020.

From time to time, the Company may be subject to certain legal proceedings, claims and disputes that arise in the ordinary course of business. Except the contingent liabilities for Langyue, other amounts accrued, as well as the total amount of reasonable possible losses with the respect to such matters, individually and in the aggregate, are not deemed to be material to the interim unaudited condensed consolidated financial statements.