What changed in this filing

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Item 1. Business

2021-06-29 compared with 2020-06-29 · 194 added, 175 removed, 63 unchanged (85% of the section changed)

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made in this Form 10-K that are not historical or current facts are “forward-looking statements”

made pursuant to

the safe harbor provisions of Section 27A of the Securities Act of 1933 (the “Act”) and Section 21E of the Securities

Exchange Act of 1934.

made pursuant to the safe

harbor provisions of Section 27A of the Securities Act of 1933 (the “Act”) and Section 21E of the Securities Exchange Act

These statements often can be identified by the use of terms such as “may,”

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or “continue,”

or the negative thereof.

negative thereof.

We intend that such forward-looking statements be subject to the safe harbors for such statements.

wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made.

Any forward-looking statements represent management’s best judgment as to what may occur in the future.

However, forward-looking

statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events

to differ materially from historical results of operations and events and those presently anticipated or projected.

any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such

statement or to reflect the occurrence of anticipated or unanticipated events.

We wish to caution

readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made.

Any forward-looking

statements represent management’s best judgment as to what may occur in the future.

However, forward-looking statements are subject

to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from

historical results of operations and events and those presently anticipated or projected.

We disclaim any obligation subsequently to

revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence

of anticipated or unanticipated events.

information contained in this report and in our financial statements is stated in United States dollars and are prepared in accordance

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was incorporated in the State of Nevada on October 28, 2014.

We were originally incorporated to produce images on

multiple surfaces, such as glass, leather, plastic, ceramic, textile, and others using a 3D sublimation vacuum heat transfer machine.

We no longer pursue opportunities related to 3D printing positioning.

We were originally incorporated to produce images on multiple

surfaces, such as glass, leather, plastic, ceramic, textile, and others using a 3D sublimation vacuum heat transfer machine.

pursue opportunities related to 3D printing positioning.

have a fiscal year-end of March 31.

The business office is located at Kingkey 100, Block A, Room 5403, Luohu District, Shenzhen

City, China 518000.

The business office is located at Kingkey 100, Block A, Room 5403, Luohu District, Shenzhen City,

China 518000.

Our telephone number is +(86) 755 8233 0336.

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(“ATXG”

or the “Company”) executed a Sale & Purchase Agreement

(“S&P”) for the acquisition of 100% of the shares of Yingxi Industrial Chain Group Co., Ltd.

(“YICG”),

a company incorporated under the laws of the Republic of Seychelles.

Pursuant to the S&P, the Company agreed to issue five

hundred million (500,000,000) restricted common shares of the company to the owners of YICG.

or the “Company”) executed a Sale & Purchase Agreement (“S&P”)

for the acquisition of 100% of the shares of Yingxi Industrial Chain Group Co., Ltd.

(“YICG”), a company incorporated under

the laws of the Republic of Seychelles.

Pursuant to the S&P, the Company agreed to issue five hundred million (500,000,000) restricted

common shares of the company to the owners of YICG.

the completion of the S&P, YICG’s business became our business.

We are a garment manufacturer and logistics service

provider based in China.

We are a garment manufacturer and logistics service provider

based in China.

We are listed on the OTCQB under the symbol of “ATXG”.

We classify our businesses into two

garment manufacturing and logistics services.

garment manufacturing business consists of sales made principally to wholesaler located in the People’s Republic of

China (“PRC”).

We have our own manufacturing facilities, with sufficient production capacity and skilled workers

on production lines to ensure that we meet our high quality control standards and timely meet the delivery requirements for

our customers.

We conduct our garment manufacturing operations through five-wholly owned subsidiaries, namely Dongguan Heng

Sheng Wei Garments Co., Ltd (“HSW”), Dongguan Yushang Clothing Co., Ltd (“YS”), Dongguan Daying

Commercial Co., Ltd (“DY”), Shantou Yi Bai Yi Garment Co., Ltd (“YBY”), and Shantou Chenghai Dai Tou

Garments Co., Ltd (“DT”), which are located in the Guangdong province, China.

We classify our businesses into four segments:

manufacturing, logistics services, property management and subleasing, and epidemic prevention

garment manufacturing business consists of sales made principally to wholesaler located in the People’s Republic of China (“PRC”).

We have our own manufacturing facilities, with sufficient production capacity and skilled workers on production lines to ensure that

we meet our high quality control standards and timely meet the delivery requirements for our customers.

We conduct our garment manufacturing

operations through four-wholly owned subsidiaries, namely Dongguan Heng Sheng Wei Garments Co., Ltd (“HSW”), Dongguan Yushang

Clothing Co., Ltd (“YS”), Shantou Yi Bai Yi Garment Co., Ltd (“YBY”), and Shantou Chenghai Dai Tou Garments Co.,

Ltd (“DT”), which are located in the Guangdong province, China.

In October, the Company

disposed of DT to a third party at fair value, which was also its carrying value as of September 30, 2020.

logistics business consists of delivery and courier services covering approximately seven provinces in China.

Although we have

our own motor vehicles and drivers, we currently outsource some of the business to our contractors.

We believe outsourcing allows

us to maximize our capacity and maintain flexibility while reducing capital expenditures and the costs of keeping drivers during

slow seasons.

We conduct our logistic operations through two wholly owned subsidiaries, namely Shenzhen Xin Kuai Jie Transportation

Co., Ltd (“XKJ”) and Shenzhen Hua Peng Fa Logistic Co., Ltd (“HPF”), which are located in the Guangdong

province, China.

Although we have our own

motor vehicles and drivers, we currently outsource some of the business to our contractors.

We believe outsourcing allows us to maximize

our capacity and maintain flexibility while reducing capital expenditures and the costs of keeping drivers during slow seasons.

our logistic operations through three wholly owned subsidiaries, namely Shenzhen Xin Kuai Jie Transportation Co., Ltd (“XKJ”),

Shenzhen Hua Peng Fa Logistic Co., Ltd (“HPF”), and Shenzhen Yingxi Peng Fa Logistic Co., Ltd (“PF”) which are

located in the Guangdong province, China.

In November, the Company disposed of HPF to a third party

at fair value, which was also its carrying value as of November 30, 2020.

business operations, customers and suppliers of DT and HPF were retained by the Company;

therefore, the disposition of the two subsidiaries

did not qualify as discontinued operations.

property management and subleasing business provides shops subleasing and property management services for garment wholesalers and retailers

in garment market.

We conduct our property management and subleasing operation through a wholly owned subsidiary, namely Dongguan Yingxi

Daying Commercial Co., Ltd (“DY”).

epidemic prevention supplies business consists of manufacturing and distribution of epidemic prevention products and reselling of epidemic

prevention supplies purchased from third parties in both domestic and overseas markets.

We conduct our manufacturing of the epidemic

prevention products in YS.

We conduct the trading of epidemic prevention suppliers through Addentax Group Corp.

(“ATXG”)

and Shenzhen Qianhai Yingxi Industrial Chain Services Co., Ltd (“YX”), an indirect wholly owned subsidiary of the Company.

believe we have the following competitive strengths:

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We have adopted a vertical integration production process.

We produce garments in our own production facilities

and employ our in-house transport teams to deliver garments to our customers.

This one-stop service optimizes production efficiency

and saves costs by lowering the cost per unit, thereby achieving economies of scale.

Stringent quality control

As of March 31, 2020, we had 49 employees in the production department that are responsible for conducting

our quality control process.

We implement a stringent quality control process which monitors various stages of our garment manufacturing

business, including sampling checks of semi-finished products and finished products.

We prepare inspection reports to address

the quality problems and make recommendations to improve the quality of our products.

During final product inspection, we pay

special attention to the measurements, workmanship, ironing and packaging of our products to help best ensure that the quality

of our products comply with the specifications, standards and requirements of our customers.

Strong design capabilities.

We produce garments in our own production facilities and employ

our in-house transport teams to deliver garments to our customers.

This one-stop service optimizes production efficiency and saves costs

by lowering the cost per unit, thereby achieving economies of scale.

quality control process.

As of March 31, 2021, we had seven employees in

the production department that are responsible for conducting our quality control process.

We implement a stringent quality control process

which monitors various stages of our garment manufacturing business, including sampling checks of semi-finished products and finished

We prepare inspection reports to address the quality problems and make recommendations to improve the quality of our products.

During final product inspection, we pay special attention to the measurements, workmanship, ironing and packaging of our products to

help best ensure that the quality of our products comply with the specifications, standards and requirements of our customers.

design capabilities.

Our design team works closely with our customers to understand their needs and make recommendations to them.

Our design team

also conducts market research and attends industry exhibitions to understand the latest market trends.

Our design team also conducts market research and attends industry exhibitions to understand the latest market trends.

As of March 31,

our design team consisted of [four] members.

Extensive delivery

Our logistics business has nine routes and covers 79 cities in seven provinces and two municipalities in the

2021, our design team consisted of five members.

delivery network.

Our logistics business has nine routes and covers 79 cities in seven provinces and two municipalities in the PRC.

Production Supply Chain.

We integrated various epidemic prevention suppliers located in China & Malaysia and established strategic

cooperation relationship with them, which can help us to purchase the epidemic prevention products in competitive lower price and stable

We also received mask production license from relevant governance and some of the products we manufactured passed the inspection

of quality inspection agency.

elements of our business and growth strategies include the following:

of raw materials.

We intend to enter into exclusive agreements with textile and garment suppliers in Southeast China to be

their exclusive agent and supply their textiles and garments to our customers.

To execute this plan, we intend to set up several

retailers for the sales of textiles and garments to retail customers and supply the textiles and garments exclusively to various

high-end fashion brands.

We intend to enter into exclusive agreements with textile and garment suppliers in Southeast China to be their

exclusive agent and supply their textiles and garments to our customers.

To execute this plan, we intend to set up several retailers

for the sales of textiles and garments to retail customers and supply the textiles and garments exclusively to various high-end fashion

of our own brands.

We intend to develop our own brands that focus on fast fashion with teenagers being our primary target

We plan to adopt a low cost strategy at the early stage and improve the quality of our products after

increasing our market share.

We are in the process of registering a trademark for our own brand and intend to start our advertising

campaign after the registration of this trademark.

We plan to distribute our products in different channels, including our own

retailers, co-operative retailers and franchisees.

Expand our delivery

We intend to develop our own brands that focus on fast fashion with teenagers being our primary target customers.

We plan to adopt a low-cost strategy at the early stage and improve the quality of our products after increasing our market share.

are in the process of registering a trademark for our own brand and intend to start our advertising campaign after the registration of

this trademark.

We plan to distribute our products in different channels, including our own retailers, co-operative retailers and franchisees.

our delivery network.

As of March 31, 2021, we provided logistics services to over 79 cities in seven provinces and two municipalities

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international logistics services and warehousing services.

We intend to develop international logistics services for customers

located all over the world and international warehousing services.

We intend to develop international logistics services for customers located

all over the world and international warehousing services.

of international trading.

We developed our international trading during the global epidemic situation of Covid-19 to import

and export diverse epidemic protection products including medical masks, latex gloves etc.

We developed our international trading during the global epidemic situation of Covid-19 to import and export

diverse epidemic protection products including medical masks, latex gloves etc.

E-commerce business.

We integrated resources in shopping mall, intend to develop e-commerce bases and the internet celebrity economy

together to drive to increase the value of the stores in the area.

our epidemic prevention supply chain.

We intend to develop our own epidemic prevention supply

chain as we see the potential and opportunity of medical and health industry.

We expect to establish a one-step epidemic prevention supply

chain from product manufacturing line establishment to sales networking construction.

Currently, we are focusing on the civil mask market

in China and provide cost-effective masks to customers.

We will improve our product quality constantly and develop oversee markets.

garment manufacturing business

manufacture garments for various high-end fashion brands through five of our wholly-owned subsidiaries, Dongguan Heng Sheng

Wei Garments Co., Ltd, Dongguan Yushang Clothing Co., Ltd (“YS”), Dongguan Daying Commercial Co., Ltd

(“DY”), Shantou Yi Bai Yi Garment Co., Ltd (“YBY”), and Shantou Chenghai Dai Tou Garments Co., Ltd,

manufacture garments for various high-end fashion brands through four of our wholly-owned subsidiaries, HSW, YS, YBY, and DT,

which are located in Guangdong, the PRC.

The company sold DT to another third party in October 2020, with consideration of $604,773,

equal to the carrying amount of its net assets.

customer relationship team is responsible for cultivating and maintaining our relationship with customers.

design team works closely with our customer relationship team to understand our customers’

needs and make recommendations

to them based on their designs.

fabric team leverages our experience in fabric sourcing as well as our understanding in fabric features to recommend the types

of fabric to be used in our customers’

needs and make recommendations to them

based on their designs.

fabric team leverages our experience in fabric sourcing as well as our understanding in fabric features to recommend the types of fabric

to be used in our customers’

Our fabric team may also suggest alternative fabrics to our customers.

Our fabric team works with our research and development team to understand fabric types and aims to identify different fabric

we source and improve the quality and comfort of the fabric we produce.

product and technical team is mainly responsible for development samples of products, preparing structural and production guidance

of products as well as producing paper patterns for our garment production team.

Upon order confirmation from our customers, our

customer relationship team informs our fabric team to carry out raw material sourcing.

Our fabric team works

with our research and development team to understand fabric types and aims to identify different fabric we source and improve the quality

and comfort of the fabric we produce.

product and technical team is mainly responsible for development samples of products, preparing structural and production guidance of

products as well as producing paper patterns for our garment production team.

Upon order confirmation from our customers, our customer

relationship team informs our fabric team to carry out raw material sourcing.

source finished fabric and yarns from our suppliers for garment production.

The procedures for fabric production are normally

divided into the following stages:

(1) spinning;

(2) weaving or knitting;

(3) dyeing or printing;

and (4) finishing.

team normally requires four to six weeks to source raw materials from our suppliers.

The procedures for fabric production are normally divided

into the following stages:

(i) spinning;

(ii) weaving or knitting;

(iii) dyeing or printing;

and (iv) finishing.

Generally, our fabric

team requires four to six weeks to source raw materials from our suppliers.

garment production team is responsible for produce garments based on the raw materials we source.

The major steps involved in

garment production include:

paper patterning, fabric cutting, sewing, interim quality inspection, trimming, washing, and ironing.

The major stages involved in garment

production include:

(i) paper patterning;

(ii) fabric cutting;

(iii) sewing;

(iv) interim quality inspection;

(v) trimming;

(vi) washing;

and (vii) ironing.

generally receive more purchase orders during our second and third quarters and less manufacture orders during May and June.

our long-term and established customers with good payment track records, we generally provide payment terms between 30 to 180

days following the delivery of finished goods.

For our new customers, we generally require advances or deposits to be made when

placing orders.

our long-term and established customers with good payment track records, we generally provide payment terms between 30 to 180 days following

the delivery of finished goods.

For our new customers, we generally require advances or deposits to be made when placing orders.

logistics business

pack products and provide logistics service to our customers through two of our wholly-owned subsidiaries, Shenzhen Xin Kuai Jie

Transportation Co., Ltd., and Shenzhen Hua Peng Fa Logistic Co., Ltd., which are located in Guangdong province, the PRC.

logistics teams deliver to approximately seven provinces and two municipalities in the PRC.

a customer is located in an area not covered by our delivery fleet or where our in-house logistics teams are fully engaged, we

will outsource delivery to third-party contractors.

We believe outsourcing allows us to maximize our delivery capacity and improve

inventory flexibility while minimizing capital expenditures, such as shipping costs and the costs of additional drivers

during low seasons.

pack products and provide logistics service to our customers through two of our wholly-owned subsidiaries, XKJ, HPF and PF which are

located in Guangdong province, the PRC.

Our in-house logistics teams deliver to approximately seven provinces and two municipalities

The company sold HPF to another third party in November 2020, with consideration of $173,170, equal to the carrying amount

of its net assets.

a customer is located in an area not covered by our delivery fleet or where our in-house logistics teams are fully engaged, we will outsource

delivery to third-party contractors.

We believe outsourcing allows us to maximize our delivery capacity and improve inventory flexibility

while minimizing capital expenditures, such as shipping costs and the costs of additional drivers during low seasons.

logistics services

provide comprehensive logistics services to our customers, which include storage, transportation, warehousing, handling, packaging

and order processing.

provide comprehensive logistics services to our customers, which include storage, transportation, warehousing, handling, packaging and

order processing.

We also provide customs declaration and tax clearance service to our customers who export goods to overseas.

have over 100 logistics points and they are located in seven provinces and two municipalities which cover 79 cities in

have 758 logistics points and they are located in seven provinces and two municipalities which cover 79 cities in the PRC.

internal management

management in logistics business is responsible for setting out business strategies and managing the daily operation.

Specifically,

they have regular meetings with different departments, conduct inspection and supervise the finance department, operation department

and administration department.

generally receive more delivery orders in our third and fourth quarters and are more vulnerable to shipping delays in the PRC

during Chinese New Year due to traffic and port congestion, border crossing delays and customs clearance issues.

Specifically, they

have regular meetings with different departments, conduct inspection and supervise the finance department, operation department and administration

generally receive more delivery orders in our third and fourth quarters and are more vulnerable to shipping delays in the PRC during

Chinese New Year due to traffic and port congestion, border crossing delays and customs clearance issues.

generally require payments from the customers between 30 to 90 days following their acknowledgement of receipt of goods.

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customer base is diverse.

Our customers in garment manufacturing business are mainly garment wholesalers and retailers and our

customers in logistics business are mainly trading companies and logistic companies.

For the year ended March 31, 2019, no

single customer accounted for more than 30%.

For the year ended March 31, 2020, there is one customer accounted for more than

30% of net sales which is 30.18% out of total net sales.

Our customers in garment manufacturing business are mainly garment wholesalers and retailers and our customers

in logistics business are mainly trading companies and logistic companies.

For the year ended March 31, 2020, there was one customer

accounted for more than 30% of net sales which is 30.18% out of total net sales.

For the year ended March 31, 2021, there is one customer

accounted for more than 30% of our net sales which is approximately 35.4% out of our total net sales.

procured our garments through various textile companies in our garment manufacturing business.

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from packing companies and transportation companies.

No single supplier accounted for more than 60% of our total costs for the

years ended March 31, 2019 and 2020.

No single supplier accounted for more than 60% of our total costs for the years

ended March 31, 2020 and 2021.

manufacturing business .

We maintain our raw materials in our storage facilities.

We review our inventory levels in order to

identify slow-moving materials and broken assortments.

Since we deliver products as soon as we receive orders from customers, we do not operate distribution centers and

hence do not need to carry a significant amount of inventory.

We review our inventory levels in order to identify

slow-moving materials and broken assortments.

Since we deliver products as soon as we receive orders from customers, we do not operate distribution centers and hence

do not need to carry a significant amount of inventory.

property management and subleasing business.

We do not need to carry a significant amount of inventory due to the nature of the business.

prevention supplies business.

Since we procured and manufactured epidemic prevention supplies on order basis, we maintain low level

of inventories and do not have slow-moving items.

currently do not own any intellectual property rights.

We are in the process of registering trademarks and copyright in relation

to our garment manufacturing business pending approval from the PRC government.

the PRC is still the world’s largest clothing manufacturer with enormous production capacity, oversupply, increasing labor

costs and rising local protectionism have eroded its competitiveness.

We are in the process of registering trademarks and copyright in relation to our

garment manufacturing business pending approval from the PRC government.

the PRC is still the world’s largest clothing manufacturer with enormous production capacity, oversupply, increasing labor costs

and rising local protectionism have eroded its competitiveness.

principal competitive factors in the garment manufacturing market include:

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principal competitive factors in the logistics market include:

believe we compete favorably with our competitors on the basis of the above factors as a result of our market position and customer

By offering one-stop-shop services and affordable price points, we provide services to our customers that are difficult

for other competitors to address.

principal competitive factors in the epidemic prevention supply market include:

principal competitive factors in the property management and subleasing market include:

believe we compete favorably with our competitors on the basis of the above factors as a result of our market position and customer base.

By offering one-stop-shop services and affordable price points, we provide services to our customers that are difficult for other competitors

of March 31, 2021, we had approximately 132 employees and there was no labor union established by our employees.

The following

table sets out a breakdown of the number of employees by function as of March 31, 2020:

The following table

sets out a breakdown of the number of employees by function as of March 31, 2021:

Administration

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unemployment insurance, childbirth insurance, work-related injury insurance, medical insurance and housing insurance.

required under PRC law to contribute to employee benefit plans at specified percentages of the salaries, bonuses and certain allowances

of our employees, up to a maximum amount specified by the local government from time to time.

believe that we maintain a good working relationship with our employees, and to date we have not experienced any significant labor

apart from customary business laws and regulations, the PRC government does not regulate the garment manufacturing business and

logistics business.

The PRC government may, however, from time to time institute rules and regulations on such businesses which

makes it difficult or impossible for us to operate successfully, if at all, in the PRC.

Please see the section on “Risk

Factors”

for further details.

PRC government encourages small to medium-sized companies in traditional industries, such as garment manufacturing, to modernize

their business models with technological updates in order to sharpen their competitive edge in global markets.

principal place of business is Kingkey 100, Block A, Room 4805, Luohu District, Shenzhen City, China 518000, the PRC.

lease three properties in the PRC from third parties which properties serve as our manufacturing factory and an additional office.

The following table sets forth a summary of certain information regarding our leased properties.

(Square Meter)

and dormitory

22 Maan Road, Shuiwei, Tangjiao

Chashan Town,

Guangdong, PRC

Principal Office

Kingkey 100, Block A, Room 4805,

District, Shenzhen,

Guangdong, China

42-46, Building 1, Block 5, District

Jinpeng Distribution Center, No.

Ping North Rd, Danping Committee,

St, Longgang, Shenzhen,

3 Ping’an Avenue, Pinghu Street,

District, Shenzhen,

also have over 100 logistics points and they are located in seven provinces and two municipalities in the PRC.

We are also required

under PRC law to contribute to employee benefit plans at specified percentages of the salaries, bonuses and certain allowances of our

employees, up to a maximum amount specified by the local government from time to time.

believe that we maintain a good working relationship with our employees, and to date we have not experienced any significant labor disputes.

apart from customary business laws and regulations, the PRC government does not regulate the garment manufacturing business and logistics

The PRC government may, however, from time to time institute rules and regulations on such businesses which makes it difficult

or impossible for us to operate successfully, if at all, in the PRC.

Please see the section on “Risk Factors”

PRC government encourages small to medium-sized companies in traditional industries, such as garment manufacturing, to modernize their

business models with technological updates in order to sharpen their competitive edge in global markets.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business