What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2021-06-29 compared with 2020-06-29 · 453 added, 423 removed, 105 unchanged (89% of the section changed)

1 unchanged sentence

common stock is currently quoted on the OTCQB under the symbol “ATXG.”

in stocks quoted on the OTCQB is often thin and is characterized by wide fluctuations in trading prices due to many factors that

may have little to do with a company’s operations or business prospects.

We cannot assure you that there will be a market

for our common stock in the future.

received our trading symbol on September 12, 2016 and were first quoted on September 12, 2016 but no shares were traded until

December 12, 2016.

The following

table sets forth the high and low trading prices of one share of our common stock for each fiscal quarter over the past two fiscal

years, and April 1, 2020 to the date of this Form 10-K.

quotations provided are for the over the counter market, which reflect interdealer prices without retail mark-up, mark-down or

commissions, and may not represent actual transactions.

Our common stock trades on a limited, sporadic and volatile basis.

high and low bid prices per share of common stock have been adjusted to give effect to the 1-for-20 reverse stock split of our

common stock effected on February 27, 2019.

Fiscal Year 20 20

in stocks quoted on the OTCQB is often thin and is characterized by wide fluctuations in trading prices due to many factors that may

have little to do with a company’s operations or business prospects.

We cannot assure you that there will be a market for our common

stock in the future.

received our trading symbol on September 12, 2016 and were first quoted on September 12, 2016 but no shares were traded until December

following table sets forth the high and low trading prices of one share of our common stock for each fiscal quarter over the past two

fiscal years, and April 1, 2021 to the date of this Form 10-K.

The quotations provided are for the over the counter market, which reflect

interdealer prices without retail mark-up, mark-down or commissions, and may not represent actual transactions.

Our common stock trades

on a limited, sporadic and volatile basis.

These high and low bid prices per share of common stock have been adjusted to give effect

to the 1-for-20 reverse stock split of our common stock effected on February 27, 2019.

First Quarter

Second Quarter (through June 29,

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Fiscal Year 2019

First Quarter

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shares of common stock were issued and outstanding as of June 29, 2021.

They were held by a total of 588 shareholders of

The holders of common stock are entitled to one vote for each share held of record on all matters submitted to a vote

of stockholders.

Holders of the common stock have no preemptive rights and no right to convert their common stock into any other

There is no redemption or sinking fund provisions applicable to the common stock.

They were held by a total of 588 shareholders of record.

holders of common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders.

of the common stock have no preemptive rights and no right to convert their common stock into any other securities.

There is no redemption

or sinking fund provisions applicable to the common stock.

transfer agent for the common stock is Transfer Online, Inc.

The transfer agent’s address is 512 SE Salmon St., Portland,

OR 97214, and its telephone number is +1 (503) 227-2950.

The transfer agent’s address is 512 SE Salmon St., Portland, OR 97214,

and its telephone number is +1 (503) 227-2950.

cash dividends were paid on our shares of common stock during the fiscal year ended March 31, 2021 and March 31, 2020.

We have not paid any cash dividends since October 28, 2014 (inception) and do not foresee declaring any cash dividends on

our common stock in the foreseeable future.

We have not paid

any cash dividends since October 28, 2014 (inception) and do not foresee declaring any cash dividends on our common stock in the foreseeable

Authorized for Issuance under Equity Compensation Plans

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Sales of Unregistered Securities

January 2016, the Company sold a total of 18,500 common shares for cash contributions of $555 at $0.03 per share.

February 2016, the Company sold a total of 74,000 common shares for cash contributions of $2,220 at $0.03 per share.

March 2016, the Company sold a total of 333,000 common shares for cash contributions of $9,862 at $0.03 per share.

April 18, 2017, the Company issued a total of 500,000,000 common shares as follows:

Group Co., Ltd.:

(Beneficial Owner:

Ma Huizhu) 215,000,000 restricted common shares.

30,000,000 restricted common shares.

Lian Group Ltd.:

(Beneficial Owner:

Ma Huijun) 255,000,000 restricted common shares.

500,000,000 common shares were issued pursuant to a Sale & Purchase Agreement (“

S&P ”) for the acquisition

of 100% of the shares and assets of Yingxi Industrial Chain Group Co., Ltd., a company incorporated under the laws of the Republic

of Seychelles.

The Company agreed to issue five hundred million (500,000,000) shares of common stock to Yingxi Industrial Chain

Group Co., Ltd.

to acquire its shares and assets for a cost of US$0.30 per share or a total cost of US$150,000,000.

Zhida is the President, Secretary, Treasurer and a Director of the Company.

claim an exemption from registration pursuant to Section 4(a)(2) and/or Rule 506(b) of Regulation D of the Securities Act, and

the rules and regulations promulgated thereunder in connection with the sales and issuances described above since the foregoing

issuances and sales did not involve a public offering, the recipients were (a) “

accredited investors ”, and/or

(b) had access to similar documentation and information as would be required in a Registration Statement under the Securities

With respect to the transactions described above, no general solicitation was made either by us or by any person acting on

The transactions were privately negotiated, and did not involve any kind of public solicitation.

No underwriters or

agents were involved in the foregoing issuances and we paid no underwriting discounts or commissions.

The securities sold are

subject to transfer restrictions, and the certificates evidencing the securities contain an appropriate legend stating that such

securities have not been registered under the Securities Act and may not be offered or sold absent registration or pursuant to

an exemption therefrom.

claim an exemption from registration pursuant to Section 4(a)(2) and/or Rule 506(b) of Regulation D of the Securities Act, and the rules

and regulations promulgated thereunder in connection with the sales and issuances described above since the foregoing issuances and sales

did not involve a public offering, the recipients were (a) “

accredited investors ”, and/or (b) had access to similar

documentation and information as would be required in a Registration Statement under the Securities Act.

With respect to the transactions

described above, no general solicitation was made either by us or by any person acting on our behalf.

The transactions were privately

negotiated, and did not involve any kind of public solicitation.

No underwriters or agents were involved in the foregoing issuances and

we paid no underwriting discounts or commissions.

The securities sold are subject to transfer restrictions, and the certificates evidencing

the securities contain an appropriate legend stating that such securities have not been registered under the Securities Act and may not

be offered or sold absent registration or pursuant to an exemption therefrom.

August 2020, the company sold a total of 747,000 common shares for cash contribution of $3,735,000.00 at $5.00 per share

December 2020, the company sold a total of 600,000 common shares for cash contribution of $3,000,000.00 at $5.00 per share

Selected Financial Data

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

following discussion and analysis of our financial condition and results of operations for the years ended March 31, 2020

and 2019 should be read in conjunction with the Financial Statements and corresponding notes included in this Annual Report

on Form 10-K.

Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties,

such as our plans, objectives, expectations, and intentions.

Actual results and the timing of events could differ materially from

those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the

Risk Factors and Special Note Regarding Forward-Looking Statements in this report.

following discussion and analysis of our financial condition and results of operations for the years ended March 31, 2021 and 2020 should

be read in conjunction with the Financial Statements and corresponding notes included in this Annual Report on Form 10-K.

Our discussion

includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives,

expectations, and intentions.

Actual results and the timing of events could differ materially from those anticipated in these forward-looking

statements as a result of a number of factors, including those set forth under the Risk Factors and Special Note Regarding Forward-Looking

Statements in this report.

We use words such as “anticipate,”

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“target”, “forecast”

and similar expressions to identify forward-looking statements.

and similar expressions to

identify forward-looking statements.

are a garment manufacturer and logistic service provider based in China.

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

We classify our businesses into two segments:

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 delivery requirement for our customers.

our garment manufacturing operations through five wholly owned subsidiaries, namely Dongguan Heng Sheng Wei Garments Co., Ltd

(“HSW”), Shantou Chenghai Dai Tou Garments Co., Ltd (“DT”), Dongguan Yingxi Daying Commercial Co., Ltd

(“DY”), Dongguan Yushang Clothing Co., Ltd (“YS”), and Shantou Yi Bai Yi Garments Co., Ltd (“YBY”)

which are located in the Guangdong province, China.

logistic business consists of delivery and courier services covering approximately 79 cities in approximately seven provinces

and two municipalities 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.

We classify our businesses into four segments:

Garment manufacturing, logistics services, property management and subleasing, and epidemic prevention supplies segments.

For the fiscal

year ended 2020 and in previous fiscal years:

(i) garment manufacturing and (ii) logistics services.

During the fiscal year 2021, we

developed two new business segments:

property management and subleasing, and epidemic prevention supplies.

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 delivery requirement for our customers.

We conduct our garment manufacturing operations

through four wholly owned subsidiaries, namely Dongguan Heng Sheng Wei Garments Co., Ltd (“HSW”), Shantou Chenghai Dai Tou

Garments Co., Ltd (“DT”), Dongguan Yushang Clothing Co., Ltd (“YS”), and Shantou Yi Bai Yi Garments Co., Ltd

(“YBY”) 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.

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.

Manufacturing Business

believe the strength of our garment manufacturing business is mainly due to our consistent emphasis on exceptional quality and

timely delivery.

The primary business objective for our garment manufacturing segment is to expand our customer base and improve

business objective and future plan for our logistic service segment is to establish an efficient logistic system and to build

a nationwide delivery and courier network in China.

As of March 31, 2020, we provide logistic service to over 79

cities in approximately seven provinces and two municipalities.

We expect to develop an additional 20 logistics points in existing

serving cities and improve the Company’s profit in the year of 2020.

business is affected by seasonal trends, with higher levels of garment sales in our second and third quarters and higher logistic

service revenue in our third and fourth quarters.

These trends primarily result from the timing of seasonal garment manufacturing

shipments and holiday periods in the logistic segment.

believe the strength of our garment manufacturing business is mainly due to our consistent emphasis on exceptional quality and timely

The primary business objective for our garment manufacturing segment is to expand our customer base and improve our profit.

Services Business

business objective and future plan for our logistics services segment is to establish an efficient logistic system and to build a nationwide

delivery and courier network in China.

As of March 31, 2021, we provide logistic service to over 79 cities in approximately seven provinces

and two municipalities.

We expect to develop an additional 20 logistics points in existing serving cities and improve the Company’s

profit in the year of 2021.

Management and Subleasing Business

business objective of our property management and subleasing segment is to integrate resources in shopping mall, develop e-commerce bases

and the Internet celebrity economy together to drive to increase the value of the stores in the area.

The short-term goal for the year

is to increase the occupancy rate of stores in the mall to more than 70%.

Prevention Supplies Business

primary objective of our epidemic prevention supplies business is to take the advantage of our resource in supply chain from the garment

manufacturing business segment to facilitate and maximize the production, distribution and resale of epidemic prevention supplies, in

order to increase our revenue base and improve our net profit.

business is affected by seasonal trends, with higher levels of garment sales in our second and third quarters and higher logistic service

revenue in our third and fourth quarters.

These trends primarily result from the timing of seasonal garment manufacturing shipments and

holiday periods in the logistic segment.

manufacturing business

our new customers, we generally require orders placed to be backed by advances or deposits.

For 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.

logistic service, we generally receive payments from the customers between 30 to 90 days following the date of the register receipt

For 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.

Services business

logistics services, we generally receive payments from the customers between 30 to 90 days following the date of the registration of

our receipt of packages.

management and subleasing business

property management and subleasing business, we generally collect rental and management fees of the following month each month in advance.

prevention supplies business

Epidemic prevention supplies business, we generally receive payment from the customers within 30 days following the delivery of finished

We would also give our long-term customers with a 12 months long credit term policy to maintain a good business relationship.

business is dependent on consumer demand for our products and services.

We believe that the significant uncertainty in the economy

in China has increased our clients’

We believe that the significant uncertainty in the economy in

China has increased our clients’

sensitivity to the cost of our products and services.

We have experienced continued

pricing pressure.

If the economic environment becomes weak, the economic conditions could have a negative impact on our sales

growth and operating margins, cash position and collection of accounts receivable.

Additionally, business credit and liquidity

have tightened in China.

Some of our suppliers and customers may face credit issues and could experience cash flow problems and

other financial hardships.

These factors currently have not had an impact on the timeliness of receivable collections from our

We cannot predict at this time how this situation will develop and whether accounts receivable may need to be allowed

for or written off in the coming quarters.

the various risks and uncertainties associated with the current economy in China, we believe our core strengths will continue

to allow us to execute our strategy for long-term sustainable growth in revenue, net income and operating cash flow.

We have experienced continued pricing pressure.

If the economic environment becomes weak, the economic conditions could have a negative impact on our sales growth and operating margins,

cash position and collection of accounts receivable.

Additionally, business credit and liquidity have tightened in China.

suppliers and customers may face credit issues and could experience cash flow problems and other financial hardships.

These factors currently

have not had an impact on the timeliness of receivable collections from our customers.

We cannot predict at this time how this situation

will develop and whether accounts receivable may need to be allowed for or written off in the coming quarters.

the various risks and uncertainties associated with the current economy in China, we believe our core strengths will continue to allow

us to execute our strategy for long-term sustainable growth in revenue, net income and operating cash flow.

of Critical Accounting Policies

have identified critical accounting policies that, as a result of judgments, uncertainties, uniqueness and complexities of the

underlying accounting standards and operation involved could result in material changes to our financial position or results of

operations under different conditions or using different assumptions.

have identified critical accounting policies that, as a result of judgments, uncertainties, uniqueness and complexities of the underlying

accounting standards and operation involved could result in material changes to our financial position or results of operations under

different conditions or using different assumptions.

and Assumptions

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is generated through sale of goods and delivery services.

Revenue is recognized when a customer obtains control of promised goods

or services and is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for

those goods or services.

In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue

and cash flows arising from contracts with customers.

The amount of revenue that is recorded reflects the consideration that the

Company expects to receive in exchange for those goods and services.

The Company applies the following five-step model in order

to determine this amount:

Revenue is recognized when a customer obtains control of promised goods or

services and is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for those goods

In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising

from contracts with customers.

The amount of revenue that is recorded reflects the consideration that the Company expects to receive

in exchange for those goods and services.

The Company applies the following five-step model in order to determine this amount:

identification

1 unchanged sentence

determination

of whether the promised goods and services are performance obligations, including whether they are distinct in the context

of the contract;

of whether the promised goods and services are performance obligations, including whether they are distinct in the context of the

of the transaction price, including the constraint on variable consideration;

1 unchanged sentence

of revenue when (or as) the Company satisfies each performance obligation.

Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is

entitled to in exchange for the goods or services it transfers to the customer.

Once a contract is determined to be within the

scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company

must deliver and which of these performance obligations are distinct.

The Company recognizes as revenues the amount of the transaction

price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied.

Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery.

all reporting periods, the Company has not disclosed the value of unsatisfied performance obligations for all product and service

revenue contracts with an original expected length of one year or less, which is an optional exemption that is permitted under

the adopted rules.

Concentrations

of Credit Risk

held in banks:

We maintain cash balances at the financial institutions in China.

We have not experienced any losses in such accounts.

Customer accounts typically are collected within a short period of time, and based on its assessment of current conditions

and its experience collecting such receivables, management believes it has no significant risk related to its concentration within

its accounts receivable.

Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled

to in exchange for the goods or services it transfers to the customer.

Once a contract is determined to be within the scope of ASC 606

at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which

of these performance obligations are distinct.

The Company recognizes as revenues the amount of the transaction price that is allocated

to the respective performance obligation when the performance obligation is satisfied or as it is satisfied.

Generally, the Company’s

performance obligations are transferred to customers at a point in time, typically upon delivery.

all reporting periods, the Company has not disclosed the value of unsatisfied performance obligations for all product and service revenue

contracts with an original expected length of one year or less, which is an optional exemption that is permitted under the adopted rules.

Company determines if an arrangement is a lease at inception.

1 unchanged sentence

assets, other current liabilities, and operating lease liabilities in our consolidated balance sheets.

Finance leases are included

in property and equipment, other current liabilities, and other long-term liabilities in the consolidated balance sheets.

assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make

lease payments arising from the lease.

Operating lease ROU assets and liabilities are recognized at commencement date based on

the present value of lease payments over the lease term.

As most of the leases do not provide an implicit rate, The Company generally

use the incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of

the lease payments at commencement date.

The operating lease ROU asset also includes any lease payments made and excludes lease

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Finance leases are included in

property and equipment, other current liabilities, and other long-term liabilities in the consolidated balance sheets.

assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease

payments arising from the lease.

Operating lease ROU assets and liabilities are recognized at commencement date based on the present

value of lease payments over the lease term.

As most of the leases do not provide an implicit rate, The Company generally use the incremental

borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement

The operating lease ROU asset also includes any lease payments made and excludes lease incentives.

Lease expense for lease payments

is recognized on a straight-line basis over the lease term.

a lessor, the Company’s leases are classified as operating leases under ASC 842.

Leases, in which the Company is the lessor, are

substantially all accounted for as operating leases and the lease components and non-lease components are accounted for separately.

income from operating leases is recognized on a straight-line basis over the term of the relevant lease.

Initial direct costs incurred

in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized on a straight-line

basis over the lease term.

issued and adopted accounting pronouncements

November 2016, the FASB issued ASU 2016-18:

Statement of Cash Flows (Topic 230):

Restricted Cash.

The amendments in this Update

require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts

generally described as restricted cash or restricted cash equivalents.

Therefore, amounts generally described as restricted cash

and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and

end-of-period total amounts shown on the statement of cash flows.

The amendments in this Update do not provide a definition of

restricted cash or restricted cash equivalents.

The amendments in this ASU on update are effective for public business entities

for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years.

Early adoption is permitted,

including adoption in an interim period.

The amendments in this Update should be applied using a retrospective transition method

each period presented.

The Company adopted this ASU on April 1, 2018 and determined it had no impact on its consolidated financial

statements as of March 31, 2020.

August 2018, the FASB issued ASU 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value

Measurement to ASC Topic 820, Fair Value Measurement (“ASC 820”) .

ASU 2018-13 modifies the disclosure requirements

for fair value measurements by removing, modifying, and/or adding certain disclosures.

ASU 2018-13 is effective for interim and

annual reporting periods in fiscal years beginning after December 15, 2019.

An entity is permitted to early adopt by modifying

existing disclosures and delay adoption of the additional disclosures until the effective date.

The Company is evaluating the

effect that adoption of this guidance will have on its consolidated financial statements and related disclosures.

February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated

Other Comprehensive Income.

The amendments allow a reclassification from accumulated other comprehensive income to retained earnings

for stranded tax effects resulting from the Tax Cuts and Jobs Act.

This standard was effective for the Company on September 1,

The adoption of this standard did not have a material impact on the Company’s consolidated financial position, results

of operations or cash flows.

June 2016, the FASB issued ASU No.

2016-13, Financial Instruments –

Credit Losses (Topic 326), Measurement of Credit Losses

on Financial Instruments.

This standard requires a financial asset (or group of financial assets) measured at amortized cost basis

to be presented at the net amount expected to be collected.

The allowance for credit losses is a valuation account that is deducted

from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected

on the financial asset.

This standard will be effective for the Company on December 15, 2019.

The Company is currently evaluating

the impact the adoption of this ASU will have on its consolidated financial statements.

January 2016, the FASB issued ASU 2016-01, “

Financial Instruments-Overall (Subtopic 825-10):

Recognition and Measurement

of Financial Assets and Financial Liabilities (“ASU 2016-01”)”.

The standard addresses certain aspects of

recognition, measurement, presentation, and disclosure of financial instruments.

ASU 2016-01 is effective for fiscal years, and

interim periods within those years, beginning after December 15, 2017.

The Company evaluated the impact of adopting the new standard

and concluded that there was no material impact to its consolidated financial statements.

February 2016, the FASB issued ASU 2016-02, “Lease (Topic 842) “

, which amends recognition of lease assets

and lease liabilities by lessees for those leases classified as operating leases.

Under the new guidance, lessees will be required

to recognize a lease liability and a right-of-use asset for all leases (with the exception of short-term leases) at the commencement

This standard takes effect for fiscal years, and interim periods within those fiscal years, beginning after December 15,

According to this new standard, the Company recorded both right-of-use asset and lease liability of $1.8 million on its

consolidated financial statements for the fiscal year ended March 31, 2020.

Credit Losses (Topic 326), Measurement of Credit Losses on

Financial Instruments.

This standard requires a financial asset (or group of financial assets) measured at amortized cost basis to be

presented at the net amount expected to be collected.

The allowance for credit losses is a valuation account that is deducted from the

amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial

This standard will be effective for the Company on April 1, 2023.

The Company is currently evaluating the impact the adoption

of this ASU will have on its consolidated financial statements.

Company reviews new accounting standards as issued.

Management has not identified any other new standards that it believes will

have a significant impact on the Company’s consolidated financial statements.

Management has not identified any other new standards that it believes will have

a significant impact on the Company’s consolidated financial statements.

of Operations for the years ended March 31, 2021 and 2020

following tables summarize our results of operations for the years ended March 31, 2021 and 2020.

The table and the discussion

below should be read in conjunction with our consolidated financial statements and the notes thereto appearing elsewhere in this

(decrease) in

compared to 2019

The table and the discussion below

should be read in conjunction with our consolidated financial statements and the notes thereto appearing elsewhere in this report.

(decrease) in 2021 compared to 2020

dollars, except for percentages)

Cost of revenues

(25,921,936 )

(17,134,918 )

Gross (loss) profit

Operating expenses

Loss from operations

Impairment loss on goodwill

Other income, net

Net finance cost

Income tax expense

$ (3,590,169 )

generated from our garment manufacturing business contributed $4,298,518 or 42.3% of our total revenue for the year ended March

Revenue generated from our garment manufacturing business contributed $3,359,638 or 33.5% of our total revenue for the

year ended March 31, 2019.

The increase of $938,880 was mainly because revenue in HSW decreased by $2,103,618 while revenue in

DT increased by $2,811,698 .

Revenue generated

from our logistic business contributed $5,873,861 or 57.7% of our total revenue for the year ended March 31, 2020.

Revenue generated

from our logistic business contributed $6,667,283 or 66.5% of our total revenue for the year ended March 31, 2019.

mainly due to COVID-19, we cannot smoothly go through the logistics business.

Total revenue

for the year ended March 31, 2020 and 2019 were $10,172,379 and $10,026,920, respectively, a 1.5% increase compared with the year

ended March 31, 2019.

The increase was mainly because the orders were increase mainly due to the increase in garment business

as the garment business developed a new client.

Holding companies, YX and QYTG did not have consulting service income in the year

ended March 31.

One of the subsidiaries, HSW, was losing order as some of its clients having market performance issue

and they cut the order placed, which resulted

in a decrease of revenue accepted.

(decrease) in

compared to 2019

dollars, except for percentages)

$ (2,609,552 )

revenue for the year ended March 31, 2021 significantly increased by approximately $14.5 million, or approximately 143.2%, as compared

with the year ended March 31, 2020.

The significant increase was mainly due to the increase of garment manufacturing production capacity

in YBY, a newly setup subsidiary in 2020, and the epidemic prevention supplies business newly developed in 2020.

generated from our garment manufacturing business contributed approximately $6.9 million, or approximately 27.9%, of our total revenue

for the year ended March 31, 2021.

Revenue generated from the segment contributed approximately $4.3 million, or approximately 42.3%,

of our total revenue for the year ended March 31, 2020.

The increase of approximately $2.6 million was mainly due to an increase of $5.4

million in YBY’s revenue, offset by the decrease of approximately $0.6 million and $2.2 million in HSW’s and DT’s revenue,

respectively.

generated from our logistics services business contributed approximately $4.6 million, or approximately 18.5%, of our total revenue for

the year ended March 31, 2021.

Revenue generated from the segment contributed approximately $5.9 million, or approximately 57.7%, of

our total revenue for the year ended March 31, 2020.

The decrease of approximately $1.3 million was mainly due to COVID-19, as we cannot

complete timely logistics services deliveries.

generated from our property management and subleasing business contributed approximately $1.3 million, or approximately 5.2%, of our

total revenue for the year ended March 31, 2021.

This is a new business segment developed in 2020.

generated from our epidemic prevention supplies business contributed approximately $12.0 million, or approximately 48.4%, of our total

revenue for the year ended March 31, 2021.

This is a new business developed in the 2020.

It included revenue from trading of merchandise

and revenue from sales of our own products.

The revenue from trading of merchandise was approximately $11.7 million, representing approximately

97.5% of total revenue from the epidemic prevention supplies business.

(decrease) in 2021 compared to 2020

dollars, except for

for garment manufacturing

2 unchanged sentences

cost of revenue for garment manufacturing

Gross profit for

garment manufacturing

Net revenue for logistic

Fuel, toll and other cost of logistic

Subcontracting

cost of revenue for logistic service

Gross Profit for

logistic service

Gross profit for garment

manufacturing

Net revenue for logistics

Fuel, toll and other cost of logistics services

Subcontracting fees

Total cost of revenue for

logistics services

Gross Profit for logistics

Net revenue for property

management and subleasing

Total cost of revenue for

property management and subleasing

Gross Profit for property

management and subleasing

Net revenue for epidemic

prevention supplies

Merchandise/Finished goods/Raw materials

Other and Overhead

Total cost of revenue for

epidemic prevention supplies

Gross profit for epidemic

prevention supplies

cost of revenue

of revenue for our manufacturing segment for the years ended March 31, 2020 and 2019 was $3,902,444 and $3,055,235, respectively,

which includes direct raw material cost, direct labor cost, manufacturing overheads including depreciation of production equipment

Cost of revenue for our service segment for the years ended March 31, 2020 and 2019 was $4,884,574 and $5,688,991, respectively,

which includes gasoline and diesel fuel, toll charges, other cost of logistic service and subcontracting fees.

our garment manufacturing business, we purchase the majority of our raw materials directly from numerous local fabric and accessories

$ (1,187,177 )

$ (2,572,538 )

our garment manufacturing business, we purchased the majority of our raw materials directly from numerous local fabric and accessories

Aggregate purchases from our five largest raw material suppliers represented approximately 98.7% and 92.7% of raw materials

purchases for the years ended March 31, 2021 and 2020, respectively.

One and two suppliers provided more than 10% of our raw materials

Two and one suppliers provided more than 10% of our raw materials

purchases for the years ended March 31, 2021 and 2020, respectively.

We have not experienced difficulty in obtaining raw materials

essential to our business, and we believe we maintain good relationships with our suppliers.

our logistic business, we outsource some of the business to our contractors.

The Company relied on a few subcontractors, in which

the subcontracting fees to our largest contractor represented approximately 25.6% and 13.3% of total cost of revenues for our

service segment for the years ended March 31, 2020 and 2019, respectively.

The percentage increased as we used more subcontracting

services than last year.

We have not experienced any disputes with our subcontractor and we believe we maintain good relationships

with our contract logistic service provider.

material costs for our manufacturing business were 72.8 % of our total manufacturing business revenue in the year ended March

31, 2020, compared with 75.1% in the year ended March 31, 2019.

The decrease in percentages was mainly due to the purchase cost

of the raw materials remained consistent, while the labor costs continued rising.

costs for our manufacturing business were 16.4% of our total manufacturing business revenue in the year ended March 31, 2020,

compared with 10.8% in the year ended March 31, 2019.

The increase in percentages was mainly due to the rising wages in the PRC.

and other expenses for our manufacturing business accounted for 1.6% of our total manufacturing business revenue for the year

ended March 31, 2020, compared with 5.1% of total manufacturing business revenue for the year ended March 31, 2019.

toll and other costs for our service business for the year ended March 31, 2020 were $1,932,149 compared with $2,445,439 for the

year ended March 31, 2019.

Fuel, toll and other costs for our service business accounted for 32.9% of our total service revenue

for the year ended March 31, 2020, compared with 36.7% for the year ended March 31, 2019.

The decrease in percentages was primarily

attributable to increase of use of subcontractors.

We have not experienced difficulty in obtaining raw materials essential

to our business, and we believe we maintain good relationships with our suppliers.

materials cost for our garment manufacturing business was approximately 70.9% of our total garment manufacturing business revenue in

the year ended March 31, 2021, as compared with approximately 72.8% in the year ended March 31, 2020.

The decrease in raw materials cost

for our garment manufacturing business was mainly due to the purchase cost of the raw materials remained consistent, offset by the continued

rising labor costs in the PRC.

costs for our garment manufacturing business was approximately 20.1% of our total garment manufacturing business revenue in the year

ended March 31, 2021, as compared with 16.4% in the year ended March 31, 2020.

The increase in labor costs for our garment manufacturing

business was mainly due to the continued rising labor costs in the PRC.

and other expenses for our garment manufacturing business accounted for approximately 0.9% of our total garment manufacturing business

revenue for the year ended March 31, 2021, as compared with 1.6% of total garment manufacturing business revenue for the year ended March

our logistic business, we outsource some of the business to our subcontractors.

Our subcontractors are contract logistic service provides.

The Company relied on a few subcontractors, which the subcontracting fees to our largest contractor represented approximately 7.6% and

25.6% of total cost of revenues for our service segment for the years ended March 31, 2021 and 2020, respectively.

The decrease in subcontracting

fee was mainly due to less usage of subcontractors during the COVID-19 epidemic circumstance.

We have not experienced any disputes with

our subcontractors and we believe we maintain good relationships with our contract logistic service provider.

toll and other costs for our logistics business for the year ended March 31, 2021 was approximately $1.8 million, as compared with $1.9

million for the year ended March 31, 2020.

Fuel, toll and other costs for our logistics business accounted for approximately 38.5% of

our total service revenue for the year ended March 31, 2021, as compared with approximately 32.9% for the year ended March 31, 2020.

The decrease in fuel, toll and other costs was primarily attributable to the decreased usage of subcontractors during the COVID-19 epidemic

circumstance.

Subcontracting

fees for our service business for the year ended March 31, 2020 decreased 9.0% to $2,952,425 from $3,243,552 for the year ended

March 31, 2019.

Subcontracting fees accounted for 50.3% and 48.6% of our total service business revenue in the years ended March

31, 2020 and 2019, respectively.

This increase in percentages was primarily because the Company subcontracted more shipping orders

to subcontractors in 2019 due to the increase in shipping orders with the destination that were not covered by the Company’s

own delivery and transportation networks.

Moreover, the delivery cost of third-party has raised due to the market condition.

cost of revenue for the year ended March 31, 2020 was $8,787,018, nearly the same as the amount for the year ended March 31, 2019.

Total cost of sales as a percentage of total sales for the year ended March 31, 2020 was 86.4%, compared with 87.2% for the year

ended March 31, 2019.

Gross margin for the year ended March 31, 2020 was 13.6% compared with 12.8% for the year ended March 31,

(decrease) in

compared to 2019

fees for our logistics business for the year ended March 31, 2021 decreased to approximately $1.8 million from $2.9 million for the year

ended March 31, 2020, representing a decrease of approximately 38.7%.

Subcontracting fees accounted for 39.7% and 50.3% of our total

logistics business revenue in the years ended March 31, 2021 and 2020, respectively.

The decrease in subcontracting fees was primarily

because we used less subcontractors during the COVID-19 epidemic circumstance.

property management and subleasing business, the cost of revenue was mainly the amortization of operating lease assets for the subleasing

epidemic prevention supplies business, we have sales of our own branded products as well as purchases and resale of goods of other brands.

The cost of revenue included cost of merchandise and cost of our own products.

The cost of merchandise was approximately $14.7 million,

representing approximately 98.6% of our total cost of revenue of the epidemic prevention supplies business.

profit of garment manufacturing business for the year ended March 31, 2021 was approximately $0.6 million, as compared

with approximately $0.4 million for the year ended March 31, 2020.

Gross profit ratio was approximately 8.1% of revenue of the

segment, as compared with approximately 9.2% for the year ended March 31, 2020.

The decrease of gross margin was due to an

increase of raw materials costs and labor costs.

profit of our logistics services business for the year ended March 31, 2021 was approximately $1.0 million and gross profit ratio

was approximately 22.0%.

Gross profit of the segment for the year ended March 31, 2020 was approximately $1.0 million and gross

profit ratio was approximately 16.8%.

The increase of gross profit ratio was mainly because of a decrease of operating expenses

due to replacement of old vehicles and shifting our strategic focus on high margin customers.

profit of our property management and subleasing business for the year ended March 31, 2021 was approximately $0.2 million, representing

approximately 12.7% of our total property management and subleasing business revenue.

This is a new business developed in 2021.

loss of our epidemic prevention supplies business for the year ended March 31, 2021 was approximately $2.9 million and gross margin

was approximately negative 24.2%.

The significant loss was mainly due to the significant increase cost of materials while

the selling price was fixed in the sales agreement with the customers.

Increase (decrease)

dollars, except for percentages)

Gross (loss) profit

$ (1,187,177 )

Operating expenses:

4 unchanged sentences

Loss from operations

Manufacturing

business gross profit for the year ended March 31, 2020 was $396,074 compared with $304,403 for the year ended March 31, 2019.

Gross profit accounted for 9.2% of our total manufacturing business revenue for the year ended March 31, 2020, compared with 9.1%

for the year ended March 31, 2019.

profit in our service business for the year ended March 31, 2020 was $989,287 and gross margin was 16.8%.

in our service business for the year ended March 31, 2019 was $978,291 and gross margin was 14.7%.

increase in gross margin was due to our focus on high margin customers, implementation of cost cutting measures and the effective

control on our costs during the year.

$ (3,608,174 )

General and administrative expenses

selling expenses in our manufacturing segment for the years ended March 31, 2020 and 2019 was $13,406 and $17,905, respectively.

Our selling expenses in our service segment for the year ended March 31, 2020 and 2019 was $nil and $nil, respectively.

expenses consist primarily of local transportation, unloading charges and product inspection charges.

Total selling expenses for

the year ended March 31, 2020 decreased 25.1% to $13,406 from $17,905 for the year ended March 31, 2019.

general and administrative expenses in our manufacturing segment for the years ended March 31, 2020 and 2019 was $167,344 and

selling expenses in our garment manufacturing segment for the years ended March 31, 2021 and 2020 was $0.04 million and $0.013 million,

respectively.

Our general and administrative expenses in our service segment, for the year ended March 31, 2020 and

2019 was $909,159 and $959,471, respectively.

Our general and administrative expenses in our corporate office for the year ended

March 31, 2020 and 2019 was $1,159,770 and $710,038, respectively.

General and administrative expenses consist primarily of administrative

salaries, office expense, certain depreciation and amortization charges, repairs and maintenance, legal and professional fees,

warehousing costs and other expenses that are not directly attributable to our revenues.

general and administrative expenses for the year ended March 31, 2020 increased 14.8% to $2,236,273 from $1,947,916 for the year

ended March 31, 2019.

The increase was mainly due to the increase in legal and professional fees to comply with the SEC accounting,

disclosure and reporting requirements, new office rental expense, overseas traveling expense and expense of General Meetings.

from operations

from operations for the years ended March 31, 2020 and 2019 was $864,318 and $683,127, respectively.

Income from operations of

$215,324 and $8,092 was attributed from our manufacturing segment for the years ended March 31, 2020 and 2019, respectively.

Income/(Loss)

from operations of $80,128 and ($10) was attributed from our service segment for the years ended March 31, 2020 and 2019, respectively.

We incurred a loss from operations in corporate office of $1,159,770 and $691,209 for the years ended March 31, 2020 and 2019,

Our selling expenses in our logistics services segment for the year ended March 31, 2021 and 2020 was nil and nil, respectively.

Selling expenses in our property management and subleasing business was $0.05 million and nil for the year ended March 31, 2021 and 2020,

respectively.

The loss from our corporate office was mainly due to increase in legal and professional fees to comply with the

SEC accounting, disclosure and reporting requirements.

Loss on Goodwill

the year ended March 31, 2020, we recognized an impairment loss on goodwill of $475,003.

A number of factors, including the overall

financial performance, the slower than expected growth and trading conditions were considered.

The goodwill impairment assessment

process was conducted at the reporting units.

We determined the fair value based on discounted cash flow calculations.

our impairment test of goodwill, the recoverable amount was lower than the carrying amount of the goodwill recorded and it was

concluded that carrying amount of goodwill of $475,003 was impaired.

tax expense for the years ended March 31, 2020 and 2019 was $16,070 and $8,555, respectively, a 87.9% increase compared to 2019.

Selling expenses in our epidemic prevention supplies business segment was approximately $0.36 million and nil for the year

ended March 31, 2021 and 2020.

Selling expenses consist primarily of local transportation, unloading charges and product inspection charges.

Total selling expenses for the year ended March 31, 2021 significantly increased by approximately 215.4%to approximately $0.41 million

from approximately $0.13 million for the year ended March 31, 2020.

general and administrative expenses in our garment manufacturing segment for the years ended March 31, 2021 and 2020 was approximately

$0.23 million and $0.17 million, respectively.

Our general and administrative expenses in our logistics services segment for the year

ended March 31, 2021 and 2020 was approximately $0.81 million and $0.91 million, respectively.

The general and administrative expenses

in our property management and subleasing business was approximately $0.10 million for the year ended March 31, 2021.

The general and

administrative expenses in our epidemic prevention supplies business segment was $0.02 million for the year ended March 31, 2021.

general and administrative expenses in our corporate office for the year ended March 31, 2021 and 2020 was approximately $0.85 million

and $1.16 million, respectively.

General and administrative expenses consist primarily of administrative salaries, office expense, certain

depreciation and amortization charges, repairs and maintenance, legal and professional fees, warehousing costs and other expenses that

are not directly attributable to our revenues.

general and administrative expenses for the year ended March 31, 2021 decreased approximately 10.2% to approximately $2.01 million from

approximately $2.24 million for the year ended March 31, 2020.

It was mainly due to the professional fees for the uplisting Form S-1

filing in the year ended March 31, 2019 and lower administrative expenses in XKJ resulting from shifting more business to outside subcontractors

in the year ended March 31, 2021.

from operations

from operations for the years ended March 31, 2021 and 2020 was approximately $3.61 million and $0.86, respectively.

Income from operations

of approximately $0.33 million and $0.22 million was attributed from our garment manufacturing segment for the years ended March 31,

2021 and 2020, respectively.

Income from operations of approximately $0.19 million and $0.08 million was attributed from our logistics

services segment for the years ended March 31, 2021 and 2020, respectively.

Income from operations of $0.004 million was attributed from

our newly developed property management and subleasing business for the year ended March 31, 2021.

Loss from operations of approximately

$3.28 million was attributed from our epidemic prevention supplies business segment for the year ended March 31, 2021.

We incurred general

and administrative expenses in corporate office of approximately $0.85 million and approximately $1.16 million for the year ended March

31, 2021 and 2020, respectively.

tax expense for the years ended March 31, 2021 and 2020 was $0.03 million and $0.02 million, respectively, a 61.0% increase compared

The Company operates in the PRC and files tax returns in the PRC jurisdictions.

Industrial Chain Group Co., Ltd was incorporated in the Republic of Seychelles and, under the current laws of the British Virgin

Islands, is not subject to income taxes.

Industrial Chain Group Co., Ltd was incorporated in the Republic of Seychelles and, under the current laws of the British Virgin Islands,

is not subject to income taxes.

HK was incorporated in Hong Kong and is subject to Hong Kong income tax at a tax rate of 16.5%.

No provision for income taxes

in Hong Kong has been made as Yingxi HK had no taxable income for the years ended March 31, 2020 and 2019.

No provision for income taxes in Hong

Kong has been made as Yingxi HK had no taxable income for the years ended March 31, 2021 and 2020.

and YX were incorporated in the PRC and is subject to the PRC Enterprise Income Tax (EIT) rate is 25%.

No provision for income

taxes in the PRC has been made as QYTG and YX had no taxable income for the years ended March 31, 2020 and 2019.

No provision for income taxes

in the PRC has been made as QYTG and YX had no taxable income for the years ended March 31, 2021 and 2020.

Company is governed by the Income Tax Laws of the PRC.

Yingxi’s operating companies, HSW, HPF, DT and YS were subject to

an EIT rate of 25% in 2020.

XKJ enjoyed the preferential tax benefits and its EIT rate was 15% in 2020.

Yingxi’s operating companiesare subject to progressive EIT rate from 5%

to 15% in year ended March 31, 2021.

The preferential tax rates will be expired at end of year 2022 and the EIT rate will be 25% from

Company’s parent entity, Addentax Group Corp.

is an U.S entity and is subject to the United States federal income tax.

provision for income taxes in the United States has been made as Addentax Group Corp.

had no United States taxable income for

the years ended March 31, 2020 and 2019.

incurred a net loss of $1,455,620 and $694,329 for the years ended March 31, 2020 and 2019, respectively.

Our basic and diluted

earnings per share were $0.06 and $0.03 for the year ended March 31, 2020 and 2019, respectively.

is a U.S entity and is subject to the United States federal income tax.

for income taxes in the United States has been made as Addentax Group Corp.

had no United States taxable income for the years ended March

31, 2021 and 2020.

incurred a net loss of approximately $3.59 million and $0.98 million for the years ended March 31, 2021 and 2020, respectively.

Our basic and diluted earnings per share were $0.14 and $0.04 for the year ended March 31, 2021 and 2020, respectively.

of cash flows

cash flows information for the years ended March 31, 2021 and 2020 is as follow:

cash (used in) provided by operating activities

cash used in investing activities

cash provided by (used in) financing activities

cash used in operating activities consist of net loss of $1,455,620, increased by depreciation of $114,391, loss on disposal of

property and equipment of $87,305, impairment loss on goodwill of $475,003, and reduced by increase in change of operating assets

and liabilities of $371,932.

We will improve our operating cash flow by closely monitoring the timely collection of accounts and

other receivables.

We generally do not hold any significant inventory for more than ninety days, as we typically manufacture upon

customers’

cash used in investing activities consist of purchase of plant and equipment of $136,001.

cash provided by financing activities consist of proceeds from bank loan of $515,447, repayment of bank loan of $371,868, repayment

of related party borrowings of $1,063,323 and we received related party proceeds of $2,475,728.

Net cash used in operating activities

$ (4,223,008 )

$ (1,150,853 )

Net cash used in investing activities

Net cash provided by financing activities

cash used in operating activities in the year ended March 31, 2021 was approximately $3.1 million more than that of the year ended

March 31, 2020.

It was mainly because the net loss of fiscal year ended March 31, 2021 was approximately $2.6 million more than

the net loss of the fiscal year ended March 31, 2020.

The movement of operating assets and liabilities of the year ended March 31, 2021

resulted in negative cash flow of approximately $0.8 million, while the movement of operating assets and liabilities of the year

ended March 31, 2020 resulted in negative cash flow of approximately $0.3 million.

We shall try to improve our operating cash

flow by closely monitoring the timely collection of accounts and other receivables.

We generally do not hold any significant inventory

for more than ninety days, as we typically manufacture upon customers’

cash used in investing activities for the year ended March 31, 2021 was approximately $0.4 million more than that of the year

ended March 31, 2020.

It was mainly because the purchase of plant and equipment in the year ended March 31, 2021, which mainly motor

truckers, was approximately $0.3 million more than the purchase of plant and equipment in prior year.

The Company had a cash decrease

of approximately $0.7 million in disposal of one subsidiary in garment manufacturing segment and one subsidiary in logistics services

The Company also had proceeds of approximately $0.5 million from the disposal of the two subsidiaries.

cash provided by financing activities for the year ended March 31, 2021 was approximately $4.5 million more than the year ended

March 31, 2020.

It was mainly because the Company had net cash decrease of approximately $2.5 million to related parties’

borrowings, net cash decrease of approximately $0.3 million attributable to bank borrowings and a proceeds of approximately

$6.7 million from issue of ordinary shares.

Condition, Liquidity and Capital Resources

of March 31, 2020, we had cash on hand of $531,681, total current assets of $6,001,242 and current liabilities of $10,096,528.

We presently finance our operations primarily from cash flows from borrowings from related parties and third parties.

improve our operating cash flows and anticipate that cash flows from our operations and borrowings from related parties and third

parties will continue to be our primary source of funds to finance our short-term cash needs.

of March 31, 2021, we had cash on hand of approximately $1.8 million, total current assets of approximately $8.0 million

and current liabilities of approximately $12.4 million.

We presently finance our operations primarily from cash flows from borrowings

from related parties and third parties.

We also raised equity fund of approximately $3.74 million and approximately $3.0

million from the issuance of common stocks in August 2020 and March 2021, respectively.

We aim to improve our operating cash flows and

anticipate that cash flows from our operations and borrowings from related parties and third parties will continue to be our primary

source of funds to finance our short-term cash needs.

The Company’s financial conditions raise substantial doubt about the Company’s

ability to continue as a going concern.

The ability to continue as a going concern is dependent upon the Company’s profit generating

operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal

business operations when they become due.

The Company expects to finance operations primarily through cash flow from revenue and capital

contributions from the CEO.

During the year, the CEO has provided financial support for the operations of the Company.

In the event that

the Company requires additional funding to finance the growth of the Company’s current and expected future operations as well as

to achieve our strategic objectives, the CEO has indicated the intent and ability to provide additional equity financing.

growth and development of our business will require a significant amount of additional working capital.

We currently have limited

financial resources and based on our current operating plan, we will need to raise additional capital in order to continue as

a going concern.

We currently have limited financial

resources and based on our current operating plan, we will need to raise additional capital in order to continue as a going concern.

We currently do not have adequate cash to meet our short or long-term objectives.

In the event additional capital

is raised, it may have a dilutive effect on our existing stockholders.

are subject to all the substantial risks inherent in the development of a new business enterprise within an extremely competitive

Due to the absence of a long standing operating history and the emerging nature of the markets in which we compete,

we anticipate operating losses until we can successfully implement our business strategy, which includes all associated revenue

Our revenue model is new and evolving, and we cannot be certain that it will be successful.

The potential profitability

of this business model is unproven.

In the event additional capital is raised, it may have

a dilutive effect on our existing stockholders.

are subject to all the substantial risks inherent in the development of a new business enterprise within an extremely competitive industry.

Due to the absence of a long standing operating history and the emerging nature of the markets in which we compete, we anticipate operating

losses until we can successfully implement our business strategy, which includes all associated revenue streams.

Our revenue model is

new and evolving, and we cannot be certain that it will be successful.

The potential profitability of this business model is unproven.

We may never ever achieve profitable operations.

Our future operating results depend on many

factors, including demand for our services, the level of competition, and the ability of our officers to manage our business and

As a result of the emerging nature of the market in which we compete, we may incur operating losses until such time as

we can develop a substantial and stable revenue base.

Additional development expenses may delay or negatively impact the ability

of the Company to generate profits.

Accordingly, we cannot assure you that our business model will be successful or that we can

sustain revenue growth, achieve or sustain profitability, or continue as a going concern.

Our future operating results depend on many factors, including demand for our services,

the level of competition, and the ability of our officers to manage our business and growth.

As a result of the emerging nature of the

market in which we compete, we may incur operating losses until such time as we can develop a substantial and stable revenue base.

development expenses may delay or negatively impact the ability of the Company to generate profits.

Accordingly, we cannot assure you

that our business model will be successful or that we can sustain revenue growth, achieve or sustain profitability, or continue as a

going concern.

Currency Translation Risk

operations are located in the China, which may give rise to significant foreign currency risks from fluctuations and the degree

of volatility in foreign exchange rates between the U.S.

operations are located in the China, which may give rise to significant foreign currency risks from fluctuations and the degree of volatility

in foreign exchange rates between the U.S.

dollar and the Chinese Renminbi (“RMB”).

All of our sales

In the past years, RMB continued to appreciate against the U.S.

As of March 31, 2020, the market foreign exchange

rate had increased to RMB 7.08 to one U.S.

All of our sales are in RMB.

years, RMB continued to appreciate against the U.S.

As of March 31, 2021, the market foreign exchange rate had increased to RMB

6.55 to one U.S.

Our financial statements are translated into U.S.

dollars using the closing

The balance sheet items are translated into U.S.

dollars using the exchange rates at the respective balance sheet

The capital and various reserves are translated at historical exchange rates prevailing at the time of the transactions

while income and expenses items are translated at the average exchange rate for the period.

All translation adjustments are included

in accumulated other comprehensive income in the statement of equity.

The foreign currency translation (loss) gain for the years

ended March 31, 2020 and 2019 was $91,443 and $96,716, respectively.

dollars using the closing rate method.

The balance sheet items

are translated into U.S.

dollars using the exchange rates at the respective balance sheet dates.

The capital and various reserves are

translated at historical exchange rates prevailing at the time of the transactions while income and expenses items are translated at

the average exchange rate for the period.

All translation adjustments are included in accumulated other comprehensive income in the statement

The foreign currency translation (loss) gain for the years ended March 31, 2021 and 2020 was $(0.2) million and $0.1 million,

respectively.

Sheet Arrangements

have no off-balance sheet arrangements (as that term is defined in Item 303(a)(4)(ii) of Regulation S-K) as of March 31, 2020

that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition,

revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

have no off-balance sheet arrangements (as that term is defined in Item 303(a)(4)(ii) of Regulation S-K) as of March 31, 2021 that have

or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses,

results of operations, liquidity, capital expenditures or capital resources.

Quantitative and Qualitative Disclosures about Market Risk

1 unchanged sentence

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 5. Market for Registrant’s Common Equity