GOING CONCERN	6 Months Ended
Sep. 30, 2020
GOING CONCERN
GOING CONCERN	2. GOING CONCERN In assessing the Company’s liquidity, the Company monitors and analyzes its cash on-hand and its operating and capital expenditure commitments. The Company’s liquidity needs are to meet its working capital requirements, operating expenses and capital expenditure obligations. Debt financing from financial institutions and equity financings have been utilized to finance the working capital requirements of the Company. The Company’s business is capital intensive. The Company’s management has considered whether there is substantial doubt about its ability to continue as a going concern due to (1) recurring losses from operations, including net loss of approximately $4.9 million and $0.1 million from continuing operations and discontinued operations, respectively, for the six months ended September 30, 2020, (2) accumulated deficit of approximately $27.9 million as of September 30, 2020; (3) the working capital deficit of approximately $3.6 million and (4) operating cash outflows of approximately $0.2 million and $1.1 million from continuing operations and discontinued operations, respectively, for the six months ended September 30, 2020. Although the Company believes that it can realize its current assets in the normal course of business, the Company’s ability to repay its current obligations will depend on the future realization of its current assets and the future operating revenues generated from its operations. Management has determined there is substantial doubt about its ability to continue as a going concern. If the Company is unable to generate significant revenue, the Company may be required to cease or curtail its operations. Management is trying to alleviate the going concern risk through the following sources: ●the Company will continue to seek equity financing to support its working capital; ●other available sources of financing (including debt) from PRC banks and other financial institutions; and ●financial support and credit guarantee commitments from the Company’s related parties. Besides, pursuant to the JKL Investment Agreement mentioned above, Hongyi agreed to subscribe for a 27.03% equity interest in Jinkailong in consideration of approximately $7.0 million. Such investment from Hongyi will provide additional cash flow of approximately $7.0 million to support Jinkailong’s working capital need. According to the latest arrangement with Hongyi, the first payment of $1.4 million has been postponed and the total investment of $7.0 million will be made before March 31, 2021. Based on the above considerations, management is of the opinion that the Company would not have sufficient funds to meet its working capital requirements and debt obligations as they become due one year from the issuance date of these financial statements. However, there is no assurance that the Company will be successful in implementing the foregoing plans or that additional financing will be available to the Company on commercially reasonable terms, or at all. There are a number of factors that could potentially arise that could undermine the Company’s plans, such as (i) the impact of the COVID-19 pandemic on the Company’s business and areas of operations in China, (ii) changes in the demand for the Company’s services, (iii) PRC government policies, (iv) economic conditions in China and worldwide, (v) competitive pricing in the automobile transaction and related service industry, (vi) the possibility that the Company’s operating results could continue to deteriorate due to COVID-19 or otherwise, (vii) that financial institutions in China may not able to provide continued financial support to the Company’s customers, and (viii) the perception of PRC-based companies in the U.S. capital markets. The Company’s inability to secure needed financing when required could require material changes to the Company’s business plan and could have a material adverse effect on the Company’s viability and results of operations.

2. GOING CONCERN

In assessing the Company’s liquidity, the Company monitors and analyzes its cash on-hand and its operating and capital expenditure commitments. The Company’s liquidity needs are to meet its working capital requirements, operating expenses and capital expenditure obligations. Debt financing from financial institutions and equity financings have been utilized to finance the working capital requirements of the Company.

The Company’s business is capital intensive. The Company’s management has considered whether there is substantial doubt about its ability to continue as a going concern due to (1) recurring losses from operations, including net loss of approximately $4.9 million and $0.1 million from continuing operations and discontinued operations, respectively, for the six months ended September 30, 2020, (2) accumulated deficit of approximately $27.9 million as of September 30, 2020; (3) the working capital deficit of approximately $3.6 million and (4) operating cash outflows of approximately $0.2 million and $1.1 million from continuing operations and discontinued operations, respectively, for the six months ended September 30, 2020. Although the Company believes that it can realize its current assets in the normal course of business, the Company’s ability to repay its current obligations will depend on the future realization of its current assets and the future operating revenues generated from its operations.

Management has determined there is substantial doubt about its ability to continue as a going concern. If the Company is unable to generate significant revenue, the Company may be required to cease or curtail its operations. Management is trying to alleviate the going concern risk through the following sources:

●the Company will continue to seek equity financing to support its working capital;

●other available sources of financing (including debt) from PRC banks and other financial institutions; and

●financial support and credit guarantee commitments from the Company’s related parties.

Besides, pursuant to the JKL Investment Agreement mentioned above, Hongyi agreed to subscribe for a 27.03% equity interest in Jinkailong in consideration of approximately $7.0 million. Such investment from Hongyi will provide additional cash flow of approximately $7.0 million to support Jinkailong’s working capital need. According to the latest arrangement with Hongyi, the first payment of $1.4 million has been postponed and the total investment of $7.0 million will be made before March 31, 2021.

Based on the above considerations, management is of the opinion that the Company would not have sufficient funds to meet its working capital requirements and debt obligations as they become due one year from the issuance date of these financial statements. However, there is no assurance that the Company will be successful in implementing the foregoing plans or that additional financing will be available to the Company on commercially reasonable terms, or at all. There are a number of factors that could potentially arise that could undermine the Company’s plans, such as (i) the impact of the COVID-19 pandemic on the Company’s business and areas of operations in China, (ii) changes in the demand for the Company’s services, (iii) PRC government policies, (iv) economic conditions in China and worldwide, (v) competitive pricing in the automobile transaction and related service industry, (vi) the possibility that the Company’s operating results could continue to deteriorate due to COVID-19 or otherwise, (vii) that financial institutions in China may not able to provide continued financial support to the Company’s customers, and (viii) the perception of PRC-based companies in the U.S. capital markets. The Company’s inability to secure needed financing when required could require material changes to the Company’s business plan and could have a material adverse effect on the Company’s viability and results of operations.