What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-02-14 compared with 2021-11-19 · 174 added, 199 removed, 323 unchanged (54% of the section changed)

Financial Statements and Supplementary Data

the six months ended September 30, 2021 and 2020

Condensed Consolidated Balance sheets as of September 30, 2021 and March 31, 2021 (unaudited)

Condensed Consolidated Statements of Income and Comprehensive Income for the Six months ended September 30, 2021 and 2020 (unaudited)

Condensed Consolidated Statements of Changes in Equity for the six months ended September 30, 2021 and 2020 (unaudited)

Condensed Consolidated Statements of Cash Flows for the six months ended September 30, 2021 and 2020 (unaudited)

Notes to Condensed Consolidated Financial Statements for the six months ended September 30, 2021 and 2020 (unaudited)

the nine months ended December 31, 2021 and 2020

Condensed Consolidated Balance sheets as of December 31, 2021 and March 31, 2021 (unaudited)

Condensed Consolidated Statements of Income and Comprehensive Income for the Nine months ended December 31, 2021 and 2020 (unaudited)

Condensed Consolidated Statements of Changes in Equity for the nine months ended December 31, 2021 and 2020 (unaudited)

Condensed Consolidated Statements of Cash Flows for the nine months ended December 31, 2021 and 2020 (unaudited)

Notes to Condensed Consolidated Financial Statements for the nine months ended December 31, 2021 and 2020 (unaudited)

AND SUBSIDIARIES

1 unchanged sentence

Dollars, except share data or otherwise stated)

September 30, 2021

March 31, 2021

CURRENT ASSETS

3 unchanged sentences

Advances to suppliers

Amount due from related party

Amount due from related

Total current assets

2 unchanged sentences

Long-term prepayments

Operating lease right of use asset

Operating lease right

Total non-current assets

LIABILITIES AND EQUITY

CURRENT LIABILITIES

4 unchanged sentences

Accrued expenses and other payables

Operating lease liability current portion

Operating lease liability

current portion

Total current liabilities

1 unchanged sentence

Operating lease liability

TOTAL LIABILITIES

EQUITY ( deficit )

Common stock ($ 0.001 par value, 50,000,000 shares authorized, 26,693,004 shares issued and outstanding at September 30, 2021 and March 31, 2021)

Common stock ($ 0.001 par value, 50,000,000 shares authorized, 26,693,004

shares issued and outstanding at December 31, 2021 and March 31, 2021)

Additional paid-in capital

3 unchanged sentences

Statutory reserve

Accumulated other comprehensive loss

Accumulated other comprehensive

Total deficit

TOTAL LIABILITIES AND EQUITY

LIABILITIES AND EQUITY

accompany notes to the unaudited condensed consolidated financial statements.

2 unchanged sentences

Dollars, except share data or otherwise stated)

Three months ended

September 30,

Six months ended

September 30,

COST OF REVENUES

5 unchanged sentences

( 1,762,023 )

( 2,223,451 )

OPERATING EXPENSES

Selling and marketing

General and administrative

Total operating expenses

and administrative

( 1,375,513 )

( 1,454,017 )

(LOSS) INCOME FROM OPERATIONS

operating expenses

( 1,510,823 )

( 1,830,992 )

INCOME FROM OPERATIONS

( 3,593,015 )

Interest income

Interest expenses

Other income (expense), net

INCOME (LOSS) BEFORE INCOME TAX EXPENSE

( 3,456,472 )

Other income (expense),

INCOME (LOSS) BEFORE INCOME

( 3,537,010 )

2 unchanged sentences

( 3,560,206 )

( 3,256,625 )

Foreign currency translation loss

TOTAL COMPREHENSIVE INCOME (LOSS)

currency translation loss

COMPREHENSIVE INCOME (LOSS)

$ ( 389,309 )

1 unchanged sentence

EARNINGS (LOSS) PER SHARE

Basic and diluted

Weighted average number of shares outstanding – Basic and diluted

Weighted average number

of shares outstanding – Basic and diluted

accompany notes to the unaudited condensed consolidated financial statements.

2 unchanged sentences

Dollars, except share data or otherwise stated)

Retained earnings (accumulated

Accumulated other

Statutory reserve

comprehensive loss

BALANCE AT JUNE 30, 2020

comprehensive

(accumulated deficit)

comprehensive

BALANCE AT OCTOBER 31, 2020

$ ( 6,489,747 )

1 unchanged sentence

Paid in capital

in capital , shares

Movement of Statutory reserve

Foreign currency translation

Net income for the period

( 3,460,525 )

BALANCE AT DECEMBER 31, 2020

$ ( 6,804,107 )

BALANCE AT SEPTEMBER 30, 2020

$ ( 117,391 )

$ ( 3,065,809 )

BALANCE AT JUNE 30, 2021

BALANCE AT OCTOBER 31, 2021

$ ( 6,723,260 )

2 unchanged sentences

Net income for the period

BALANCE AT SEPTEMBER 30, 2021

BALANCE AT DECEMBER 31, 2021

$ ( 6,711,641 )

4 unchanged sentences

Paid in capital

Movement of Statutory reserve

Foreign currency translation

2 unchanged sentences

( 3,560,206 )

BALANCE AT SEPTEMBER 30, 2020

BALANCE AT DECEMBER 31, 2020

( 6,804,107 )

5 unchanged sentences

Net income for the period

BALANCE AT SEPTEMBER 30, 2021

BALANCE AT DECEMBER 31, 2021

$ ( 6,711,641 )

4 unchanged sentences

Dollars, except share data or otherwise stated)

Six Months Ended September 30

CASH FLOWS FROM OPERATING ACTIVITIES:

Months Ended December 31

CASH FLOWS FROM OPERATING

Net income (loss)

$ ( 3,560,206 )

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Loss on disposal of plant and equipment

Adjustments to reconcile net income (loss)

to net cash used in operating activities:

Loss on disposal of plant

and equipment

Changes in operating assets and liabilities

6 unchanged sentences

( 1,688,272 )

Accrued expenses and other payables

Advances from customers

Accrued expenses and other

from customers

Net cash provided by (used in) operating activities

$ ( 3,782,116 )

CASH FLOWS FROM INVESTING ACTIVITIES:

CASH FLOWS FROM INVESTING

Purchase of plant and equipment and other assets

Proceeds from sale of property and equipment

Cash decreased in disposal

of subsidiaries

Net cash used in investing activities

1 unchanged sentence

$ ( 1,094,344 )

CASH FLOWS FROM FINANCING ACTIVITIES:

CASH FLOWS FROM FINANCING

Proceeds from issuance of common stocks

7 unchanged sentences

$ ( 1,543,573 )

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

NET (DECREASE) INCREASE

IN CASH AND CASH EQUIVALENTS

( 1,336,016 )

Effect of exchange rate changes on cash and cash equivalents

Cash and cash equivalents, beginning of the period

CASH AND CASH EQUIVALENTS, END OF THE PERIOD

Supplemental disclosure of cash flow information:

Effect of exchange rate changes on cash and

cash equivalents

Cash and cash equivalents,

beginning of the period

AND CASH EQUIVALENTS, END OF THE PERIOD

Supplemental disclosure

of cash flow information:

Cash paid during the year for interest

Cash paid during the year for income tax

Supplemental disclosure of non-cash investing and financing activities:

Right-of-use assets obtained in exchange for operating lease obligations

Supplemental disclosure

of non-cash investing and financing activities:

Right-of-use assets obtained in exchange for

operating lease obligations

Net assets of subsidiaries

disposed of recorded as Other Receivables

accompany notes to the unaudited condensed consolidated financial statements.

24 unchanged sentences

going concern assumption contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

Company incurred net income of $ 32,021 and net loss of $ 3,460,525 for the three months ended September 30, 2021 and 2020, respectively,

and net income of $ 110,968 and net loss of $ 3,256,626 for the six months ended September 30, 2021 and 2020, respectively.

As of September

Company incurred net income of $ 11,619 and net loss of $ 303,581 for the three months ended December 31, 2021 and 2020, respectively,

and net income of $ 122,587 and net loss of $ 3,560,206 for the nine months ended December 31, 2021 and 2020, respectively.

As of December

31, 2021 and March 31, 2021, the Company had net current liability of $ 4,602,684 and $ 4,430,933 , respectively, and a deficit on total

19 unchanged sentences

however actual results could differ materially from those estimates.

is no change on the accounting policies for the three months ended September 30, 2021.

is no change on the accounting policies for the three months ended December 31, 2021.

issued accounting pronouncements

13 unchanged sentences

PARTY TRANSACTIONS

SCHEDULE OF RELATED PARTIES

SCHEDULE OF RELATED PARTIES RELATIONSHIP WITH THE COMPANY

of Related Parties

3 unchanged sentences

legal representative of XKJ

General Manager of XKJ

Manager of XKJ

legal representative of YBY

1 unchanged sentence

Company leases Shenzhen XKJ office rent-free from Bihua Yang.

Company had the following related party balances as of September 30, 2021 and March 31, 2021:

SCHEDULE OF RELATED PARTIES TRANSACTION

Amount due from related party

September 30, 2021

March 31, 2021

Hongye Financial Consulting (Shenzhen) Co., Ltd.

Company had the following related party balances as of December 31, 2021 and March 31, 2021:

SCHEDULE OF RELATED PARTY TRANSACTION

from related party

Hongye Financial

Consulting (Shenzhen) Co., Ltd.

Zhiyong Zhou (1)

Related party borrowings

September 30, 2021

March 31, 2021

party borrowings

Zhida Hong (2)

2 unchanged sentences

Jinlong Huang

Being cash advance to Zhiyong Zhou to pay for daily operating

expenditures of XKJ.

cash advance to Zhiyong Zhou to pay for daily operating expenditures of XKJ.

decrease was due to net repayment of debt due to Zhida Hong.

During the three and six months ended September 30, 2021, the Company

During the three and nine months ended December 31, 2021, the Company

received financial support of $ 0.03 million and 0.27 million from Zhida Hong and repaid $ 0.3 million and $ 0.9 million of debts due

1 unchanged sentence

decrease was due to net repayment of debt due to Dewu Huang.

During the six months ended September 30, 2021, the company received

interest free advanced loan as financial support of approximately $ 1.3

million from Dewu Huang

and repaid approximately $ 2.0

million of debts due to

During the nine months ended December 31, 2021, the company received

interest free advanced loan as financial support of approximately $ 1.5 million from Dewu Huang and repaid approximately $ 2.0 million

of debts due to him.

The related party debt was additional financial support provided by Dewu Huang for YBY’s daily operation.

borrowing balances with related parties are unsecured, non-interest bearing and repayable on demand.

consist of the following as of September 30, 2021 and March 31, 2021:

consist of the following as of December 31, 2021 and March 31, 2021:

SCHEDULE OF INVENTORIES

September 30, 2021

March 31, 2021

Raw materials

2 unchanged sentences

Total inventories

is no inventory write-off for the three and six months ended September 30, 2021 and 2020.

is no inventory write-off for the three and nine months ended December 31, 2021 and 2020.

Company has made advances to third-party suppliers in advance of receiving inventory parts.

7 unchanged sentences

AND OTHER RECEIVABLES

and other receivables consist of the following as of September 30, 2021 and March 31, 2021:

and other receivables consist of the following as of December 31, 2021 and March 31, 2021:

SCHEDULE OF PREPAYMENTS AND OTHER RECEIVABLES

September 30, 2021

March 31, 2021

Receivable of consideration on disposal of subsidiaries

Receivable of consideration on disposal

of subsidiaries

Other receivables

Prepayments and other receivables

PLANT AND EQUIPMENT

plant and equipment consists of the following as of September 30, 2021 and March 31, 2021:

plant and equipment consists of the following as of December 31, 2021 and March 31, 2021:

SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT

September 30, 2021

March 31, 2021

Production plant

2 unchanged sentences

accumulated depreciation

Plant and equipment, net

expense for the three and six months ended September 30, 2021 and 2020 was $ 42,008 and $ 27,686 , $ 71,397 and $ 51,159 , respectively.

Plant and equipment,

expense for the three and nine months ended December 31, 2021 and 2020 was $ 44,164 and $ 32,051 , $ 115,561 and $ 83,210 , respectively.

August 2019, HSW entered into a facility agreement with Agricultural Bank of China and obtained a line of credit, which allows the Company

1 unchanged sentence

The loans are guaranteed at no cost by the legal representative

As of September 30, 2021, the Company has borrowed $ 155,120 (RMB 1,000,000 ) (March 31, 2021:

As of December 31, 2021, the Company has borrowed $ 157,354 (RMB 1,000,000 ) (March 31, 2021:

$ 152,607 ) under this line of credit

1 unchanged sentence

The outstanding loan balance was due on September 30, 2021.

The Company is still

negotiating with the bank on renewal of the loan facility.

Before renewal, the Company is paying additional 2.22 % as penalty interest.

The Company was not

able to renew the loan facility with the bank.

The Company is negotiating with the bank on repayment schedule of the loan balance and

interest payable.

In January 2022, Ding Yinping, underwriter of the loan, partly repaid $ 6,596 (RMB 41,921 ) on behalf of the Company.

Income Tax (“EIT”)

4 unchanged sentences

No provision for income taxes

in Hong Kong has been made as Yingxi HK had no taxable income for the three and six months ended September 30, 2021 and 2020.

in Hong Kong has been made as Yingxi HK had no taxable income for the three and nine months ended December 31, 2021 and 2020.

were incorporated in the PRC and is subject to the EIT tax rate of 25 % .

No provision for income taxes in the PRC has been made as YX

had no taxable income for the three and six months ended September 30, 2021 and 2020.

had no taxable income for the three and nine months ended December 31, 2021 and 2020.

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

5 unchanged sentences

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

had no United States taxable income for the three and six

months ended September 30, 2021 and 2020.

had no United States taxable income for the three and nine

months ended December 31, 2021 and 2020.

reconciliation of income taxes computed at the PRC statutory tax rate applicable to the PRC, to income tax expenses are as follows:

SCHEDULE OF RECONCILIATION OF INCOME TAXES

SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION

Three months ended

Six months ended

September 30,

Nine months ended

PRC statutory tax rate

2 unchanged sentences

Permanent difference

Changes in valuation allowance

Changes in valuation

Income tax expense

27 unchanged sentences

Company also provides general corporate services to its segments and these costs are reported as “Corporate and others”.

information in the segment structure is presented in the following tables:

SCHEDULE OF SEGMENT REPORTING INFORMATION, BY SEGMENT

Logistics Services

Property management and leasing

Epidemic prevention supplies

Corporate and other

information for period ended December 31, 2021 in the segment structure is presented in the following tables:

SCHEDULE OF SEGMENT REPORTING

management and leasing

prevention supplies

Revenue from external customers

9 unchanged sentences

location of customers and long-lived assets are based on the geographical location of the assets.

SCHEDULE OF REVENUE AND LONG-LIVED ASSETS, BY GEOGRAPHICAL LOCATION

September 30,

SCHEDULE OF GEOGRAPHICAL INFORMATION

United States

Long-Lived Assets

RIGHT-OF-USE ASSET AND LEASE LIABILITIES

Company recognized right-of-use asset as well as lease liability according to the ASC 842, Leases (with the exception of short-term leases).

Lease liabilities are measured at present value of the sum of remaining rental payments as of September 30, 2021, with discounted rate

Lease liabilities are measured at present value of the sum of remaining rental payments as of December 31, 2021, with discounted rate

A single lease cost is recognized over the lease term on a generally straight-line basis.

8 unchanged sentences

Following table summarizes the components of lease expense:

SCHEDULE OF COMPONENTS OF LEASE EXPENSE

Three months ended

September 30,

Six months ended

September 30,

SCHEDULE OF LEASE COST

Operating lease cost

Short-term lease cost

Short-term lease

following table summarizes supplemental information related to leases:

SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASES

Three months ended

September 30,

Six months ended

September 30,

Cash paid for amounts included in the measurement of lease liabilities

Operating cash flow from operating leases

Right-of-use assets obtained in exchange for new operating leases liabilities

Weighted average remaining lease term - Operating leases (years)

Weighted average discount rate - Operating leases

Cash paid for amounts included in the measurement

of lease liabilities

Operating cash flow from operating

Right-of-use assets obtained in exchange for

new operating leases liabilities

Weighted average remaining lease term - Operating

leases (years)

Weighted average discount rate - Operating

following table summarizes the maturity of operating lease liabilities:

SCHEDULE OF MATURITY OF OPERATING LEASE LIABILITIES

Years ending September 30

SCHEDULE OF OPERATING LEASE LIABILITY

ending December 31

Total lease payments

RISKS AND UNCERTAINTIES

Economic and Political Risks

The Company’s operations are conducted

Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political,

economic and legal environment in the PRC, and by the general state of the PRC economy.

The Company’s operations in the PRC

are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe.

These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange.

The Company’s

results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies

with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation.

Foreign Currency Translation

The Company’s reporting currency

and Political Risks

Company’s operations are conducted in the PRC.

Accordingly, the Company’s business, financial condition and results of operations

may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy.

Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies

in North America and Western Europe.

These include risks associated with, among others, the political, economic and legal environment

and foreign currency exchange.

The Company’s results may be adversely affected by changes in the political and social conditions

in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion,

remittances abroad, and rates and methods of taxation.

Currency Translation

Company’s reporting currency is the U.S.

The functional currency of the parent company is the U.S.

dollar and the functional currency of the Company’s

operating subsidiaries is the Chinese Renminbi (“RMB”).

For the subsidiaries whose functional currencies are the RMB, all

assets and liabilities are translated at exchange rates at the balance sheet date, which was 6.447 and 6.553 as of September 30, 2021

and March 31, 2021, respectively.

Revenue and expenses are translated at the average yearly exchange rates, which was 6.466 and 6.779

for the six months ended September 30, 2021 and 2020, respectively.

dollar and the functional

currency of the Company’s operating subsidiaries is the Chinese Renminbi (“RMB”).

For the subsidiaries whose functional

currencies are the RMB, all assets and liabilities are translated at exchange rates at the balance sheet date, which was 6.355 and 6.553

as of December 31, 2021 and March 31, 2021, respectively.

Revenue and expenses are translated at the average yearly exchange rates, which

was 6.442 and 6.779 for the nine months ended December 31, 2021 and 2020, respectively.

Equity is translated at historical exchange rates.

Any translation

adjustments resulting are not included in determining net income but are included in foreign exchange adjustments to other comprehensive

loss, a component of equity.

Concentration Risks

The followings are the percentages of accounts

receivable balance of the top customers over accounts receivable for each segment as of September 30, 2021 and March 31, 2021.

SCHEDULE OF CONCENTRATION OF RISK BY CUSTOMERS

Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustments to

other comprehensive loss, a component of equity.

Concentration

followings are the percentages of accounts receivable balance of the top customers over accounts receivable for each segment as of December

31, 2021 and March 31, 2021.

SCHEDULE OF CONCENTRATION RISKS

manufacturing segment

September 30, 2021

March 31, 2021

high concentration as of September 30, 2021 was mainly due to business development of a large distributor of garments.

high concentration as of December 31, 2021 was mainly due to business development of a large distributor of garments.

services segment

September 30, 2021

March 31, 2021

management and subleasing

SCHEDULE OF PROPERTY MANAGEMENT AND SUBLEASING

September 30, 2021

March 31, 2021

accounts receivables in this segment.

prevention supplies segment

accounts receivables in this segment.

the three and six months ended September 30, 2021, one customer from garment segment provided more than 10 % of total revenue of the Company,

represented 14.0 % of total revenue of the Company for the three months and 34.5 % for the six months.

For the three and six months ended

September 30, 2020, one customer from garment segment and one customer from epidemic prevention supplies segment provided more than 10 %

of total revenue of the Company.

The high concentration in three months

ended September 30, 2021 was mainly due to concentration of distributors in trading of epidemic prevention supplies.

Management believes

that should the Company lose any one of its major customers, it was able to sell similar products to other customers.

The following tables summarized the purchases

from five largest suppliers of each of the reportable segment for the three and six months ended September 30, 2021 and 2020.

SCHEDULE OF INVENTORY PURCHASES FROM SUPPLIERS

the three months ended December 31, 2021, there was no single customer provided more than 10 % of total revenue of the Company.

months ended December 31, 2021, one customer from garment segment provided more than 10 % of total revenue of the Company, represented

24.8 % for the nine months.

For the three months ended December 31, 2020, there was no customer provided more than 10 % of total revenue

of the Company.

For nine months ended December 31, 2020, one customer from garment segment and one customer from epidemic prevention

supplies segment provided more than 10 % of total revenue of the Company.

high concentration in nine months ended December 31, 2021 was mainly due to concentration of distributors in garment segment.

believes that should the Company lose any one of its major customers, it was able to sell similar products to other customers.

following tables summarized the purchases from five largest suppliers of each of the reportable segment for the three and nine months

ended December 31, 2021 and 2020.

SCHEDULE OF PURCHASES FROM SUPPLIERS

Three months ended

Six months ended

September 30,

Nine months ended

Garment manufacturing segment

2 unchanged sentences

Epidemic prevention supplies

Interest Rate Risk

The Company’s exposure to interest

rate risk primarily relates to the interest expenses on our outstanding bank borrowings and the interest income generated by cash invested

in cash deposits and liquid investments.

As of September 30, 2021, the total outstanding borrowings amounted to $ 155,120 (RMB 1,000,000 )

with various interest rate from 4.84 % to 6.96 % p.a.

The Coronavirus Disease (COVID-19) outbreak

and the measures taken to contain the spread of the pandemic have created a high level of uncertainty to global economic prospects and

this has impacted the Company’s operations and its financial performance in the last three quarters of the financial year and subsequent

to the financial year end.

As the situation continues to evolve with

significant level of uncertainty, the Company is unable to reasonably estimate the full financial impact of the COVID-19 outbreak.

Company is monitoring the situation closely and to mitigate the financial impact, it is conscientiously managing its cost by adopting

an operating cost reduction strategy and conserving liquidity by working with major creditors to align repayment obligations with receivable

Company’s exposure to interest rate risk primarily relates to the interest expenses on our outstanding bank borrowings and the

interest income generated by cash invested in cash deposits and liquid investments.

As of December 31, 2021, the total outstanding borrowings

amounted to $ 157,354 (RMB 1,000,000 ) with various interest rate from 4.84 % to 6.96 % p.a.

Coronavirus Disease (COVID-19) outbreak and the measures taken to contain the spread of the pandemic have created a high level of uncertainty

to global economic prospects and this has impacted the Company’s operations and its financial performance in the last three quarters

of the financial year and subsequent to the financial year end.

the situation continues to evolve with significant level of uncertainty, the Company is unable to reasonably estimate the full financial

impact of the COVID-19 outbreak.

The Company is monitoring the situation closely and to mitigate the financial impact, it is conscientiously

managing its cost by adopting an operating cost reduction strategy and conserving liquidity by working with major creditors to align

repayment obligations with receivable collections.

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-Q

Item 1. Financial Statements