Our mission is to build a nationwide multi-brand service, or MBS, network enabled by an end-to-end, or E2E, automotive supply chain cloud platform equipped with software-as-a-service, or SaaS, management system, and to become the largest new energy vehicle aftermarket service platform for delivering lifecycle automotive services in China. We are one of the leading and fast-growing lifecycle automotive service providers in China. In 2022, we ranked first and third in terms of the growth rate of revenues generated from NEV sales, and the growth rate of revenues, respectively, among all the lifecycle automotive service providers in China, according to the Frost & Sullivan report. Founded in 2010, we provide high-quality, affordable, and professional one-stop automotive products and services through online and offline channels countrywide. Leveraging our online supply chain cloud platform, SaaS platforms, and the network of MBS stores, we have established an ecosystem of lifecycle automotive services by connecting automotive manufacturers, auto parts manufactures, and insurance companies with MBS stores and various automotive owners. Therefore, we have built an automotive supply and service chain cloud platform utilizing a suppliers-to-business-to-customers, or S2B2C, business model, with automotive manufacturers, auto parts manufactures, and insurance companies acting as the “suppliers,” MBS stores acting as the “business,” automotive owners acting as the “customers,” and us taking the role of “to” to link the industry players and provide the supply and service chain operation services to realize the process synchronization and optimization among the various transaction entities along with the automotive supply and service chain, from merchandise sourcing, ordering and payment, inventory control, and logistics and fulfilment management, to service rendering. We have significant in-house technology innovation capabilities in the lifecycle automotive service industry in China. Our business model aims at automotive supply chain consolidation and cost savings, process synchronization, digitalization, optimization, and efficiency improvement, as well as the improvement of customer satisfaction of automotive services. The achievement of our objectives is based on the supply and service chain cloud platform which not only requires the technical development including coding outsourcing, but also relies on the test of real business operation and continuous iterative refinement. Through our robust research and development efforts, we have successfully developed an intellectual property portfolio that differentiates us from our competitors. Our self-developed and proprietary online SaaS platforms serve the functions of store management, supply chain management, insurance management, and car sales. Every supply chain within our cloud platform shares the unified master database library, or MDL, and every participant along with a supply chain can register its relative identity information vie web portal or mobile portal. Our continuously expanding network of independent MBS stores fulfils the lifecycle automotive service needs of passenger vehicle owners in China. Most of the MBS stores carry our brand name, “Autozi,” which has a strong brand awareness in the markets we serve. We digitalize sporadic automotive purchase and service demands for different brands of cars into the MBS store network and address diverse product and service needs of customers in one stop. Since our MBS stores mostly locate in the third-and fourth-tier cities as well as counties and townships in China, we are able to penetrate the vast grassroots market in China. As of March 31, 2024, we had an aggregate of 252 MBS stores, covering five provinces and 17 cities in China. We have achieved rapid growth since the upgrades of our business model in 2018. Our revenues increased by 79.0% from US$67.2 million in the fiscal year ended September 30, 2021 to US$120.3 million in the fiscal year ended September 30, 2022. However, our revenues decreased slightly from US$120.3 million in the fiscal year ended September 30, 2022 to US$113.5 million in the fiscal year ended September 30, 2023 primarily because our revenues decreased from US$55.9 million for the six months ended March 31, 2022 to US$44.0 million for the six months ended March 31, 2023 under the influence of (i) COVID-19 pandemic and (ii) the unfavorable fluctuations in the exchange rate of the U.S. dollars. For the six months ended March 31, 2023, the COVID-19 pandemic adversely affected our business as it caused temporary closures of stores in our network and our offices reduced customers’ travel and the demand for automotive sales and services. In December 2022, the Chinese government announced the overall cancellation of risk control measures of COVID-19 pandemic including quarantines, travel restrictions, and the temporary closure of stores and facilities in China. During the one month prior to the removal of control measures, COVID-19 outbroke and spread severely in many regions of China, as a result, a majority of our employees were required to be home-quarantined and some of our offices were temporarily closed for certain periods. After the removal of control measures of COVID-19 since December 2022, almost all of our staffs gradually got infected with the COVID-19 and suspended their work for several days or weeks. As a result, our business operation and financial results were adversely affected by the COVID-19 for the six months ended March 31, 2023. However, we have experienced an increase in our revenues during the third and fourth quarters of the fiscal year ended September 30, 2023 compared to the same period in the fiscal year ended September 30, 2022. For the fiscal year ended September 30, 2022, our new car sales, auto parts and auto accessories sales and automotive insurance related services accounted for 60.6%, 32.4% and 7.0% of our total revenues, respectively. For the fiscal year ended September 30, 2023, our new car sales, auto parts and auto accessories sales and automotive insurance related services accounted for 65.0%, 32.4% and 2.6% of our total revenues, respectively. In light of the foregoing circumstances, we have concluded that there is substantial doubt about our ability to continue as a going concern for a period of one year from the date that our unaudited condensed consolidated financial statements for the six months ended March 31, 2024 were issued. To meet the cash requirements for the next 12 months from the issuance date of this report, we are undertaking a combination of the following remediation plans: (i) we have been continuously negotiating the extension of liabilities including bank loans, convertible bonds and corresponding interests payable, as well as the conversion of mezzanine equity to permanent equity; and (ii) we are focusing on the improvement of operational efficiency, the implementation of strict cost control and budget and the enhancement internal controls to create synergy of our resources. Our business segments include (i) new car sales, (ii) auto parts and auto accessories sales, and (iii) automotive insurance related services. New Car Sales We conduct our new car sales business primarily through our cooperating stores and we cooperate with the stores that are dedicated to well-recognized and reliable brands. For the fiscal years ended September 30, 2022 and 2023 and the six months ended March 31, 2023 and 2024, our revenues generated by the new car sales business were US$73.0 million, US$73.7 million, US$26.0 million and US$24.4 million, respectively. During the same periods, we sold approximately 829, 659, 286 and 192 new cars, respectively. Our new car sales business includes parallel import car sales and NEV sales. Parallel import car sales contributed 58.8%, 64.1%, 57.2% and 50.3% of our total revenues during the fiscal years ended September 30, 2022 and 2023 and the six months ended March 31, 2023 and 2024, respectively. NEV sales contributed 1.8%, 0.9%, 2.0% and 0.5% of our total revenues during the fiscal years ended September 30, 2022 and 2023 and the six months ended March 31, 2023 and 2024, respectively. Parallel Import Car Sales In general, the automotive manufacturers usually do not supply new cars and original equipment supplier, or OES, parts, to stores outside their authorized store network. Therefore, leveraging the parallel import car sales as a breakthrough, we reinforce our efforts in incubating and establishing platforms for our car sales and service supply chain as well as forging our cooperation with OESs to develop differentiated and customized business models in line with our strategic goals. For the fiscal years ended September 30, 2022 and 2023 and the six months ended March 31, 2023 and 2024, our revenues generated by the parallel import car sales business were US$70.8 million, US$72.6 million, US$25.2 million and US$24.2 million, respectively. NEV Sales For NEV sales, we receive orders from customers through online marketing and promotion in our MBS stores, deliver NEVs from the nearest MBS store, complete the sale and settle the service fees with the MBS stores in the fiscal year ended September 30, 2022. Since the beginning of the fiscal year ended September 30, 2023, we gradually ceased our cooperation with the MBS stores and primarily sold NEVs to customers directly. For the fiscal years ended September 30, 2022 and 2023 and the six months ended March 31, 2023 and 2024, our revenues generated by the NEV sales business were US$2.2 million, US$1.0 million, US$0.9 million and US$0.3 million, respectively. Auto Parts and Auto Accessories Sales We conduct our auto parts and auto accessories sales business primarily to our auto part dealers and gradually upgrade to directly connect to local MBS stores, which is complementary to our new car sales business. We source most of our auto parts and auto accessories based on several factors, including but not limited to, product popularity, sales volume and customer satisfaction of product quality. For the fiscal years ended September 30, 2022 and 2023 and the six months ended March 31, 2023 and 2024, our revenues generated by the auto parts and auto accessories sales business were US$39.0 million, US$36.8 million, US$16.2 million and US$23.3 million, respectively. Automotive Insurance Related Services Our automotive insurance related services include value-added maintenance services, claim and repair services and insurance intermediation services. The development of internet technology and the pursuit of efficiency by insurance companies and car owners have accelerated the market trend of disintermediation of automotive insurance sales. Capitalizing on our brand strength and expertise, we collaborate closely with insurance companies as concurrent business insurance value-added service providers to enhance operational efficiency and better meet car owners’ evolving needs. Insurance companies now tend to offer car owners complimentary maintenance services when selling automotive insurances, where we help insurance companies deliver the granted maintenance services. In addition, when car owners encounter car accidents, we will provide a comprehensive portfolio of services, including but not limited to, road rescue services, automotive damage assessment services, and claim and repair services for insurance companies. For the fiscal years ended September 30, 2022 and 2023 and the six months ended March 31, 2023 and 2024, our revenues generated by the automotive insurance related services business were US$8.4 million, US$3.0 million, US$1.7 million and US$0.4 million, respectively. Value-added Maintenance Services Our value-added maintenance services cover a wide range of services including automotive cleaning, automotive air conditioner cleaning, minor maintenance, automotive inspection, and scratch repair. When selling automotive insurances, the insurance companies that we collaborate with will offer car owners with coupons to later enjoy complementary value-added maintenance services, where we help deliver automotive value-added maintenance services in collaboration with our MBS stores. For the fiscal years ended September 30, 2022 and 2023 and the six months ended March 31, 2023 and 2024, our revenues generated from value-added maintenance services were US$6.2 million, US$2.4 million, US$1.3 million and US$0.3 million, respectively. Claim and Repair Services Our claim and repair services primarily consist of road rescue services, automotive damage assessment services, automotive repair services, and claim settlement services. We work with leading insurance companies in China to promote and distribute automotive insurance products by insurance companies primarily through our insurance service team and our MBS store network. Our revenues generated from our claim and repair services primarily include the fees we receive from insurance companies for collecting insurance premiums, coordinating repair claims and providing other services. For the fiscal years ended September 30, 2022 and 2023 and the six months ended March 31, 2023 and 2024, our revenues generated from claim and repair services were US$2.1 million, US$0.6 million, US$0.4 million and US$0.1 million, respectively. Insurance Intermediation Services We provide insurance intermediation services for insurance companies in China to promote and handle automotive insurance, including but not limited to, compulsory third-party liability vehicle insurance and passenger vehicle insurance. We are an exempted company limited by shares incorporated under the laws of the Cayman Islands on July 15, 2021. Our registered office is located at offices of Harneys Fiduciary (Cayman) Limited, 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands. Our principal executive offices of our operating subsidiaries are located at Building B09, Intelligence Park, No. 26 Yongtaizhuang North Road, Haidian District, Beijing, China. Our agent for service of process in the United States is Cogency Global Inc. located at 122 East 42nd Street, 18th Floor, New York, NY.
