What changed in this filing

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Item 1. Business

2022-06-23 compared with 2021-06-29 · 254 added, 93 removed, 164 unchanged (68% of the section changed)

Forward-looking

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

made pursuant to the safe

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

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

“will,”

“expect,”

“believe,”

“anticipate,”

“estimate,”

“approximate”

or “continue,”

negative thereof.

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

We wish to caution

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

Any forward-looking

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

However, forward-looking statements are subject

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

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

We disclaim any obligation subsequently to

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

of anticipated or unanticipated events.

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

with United States generally accepted accounting principles.

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

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pursue opportunities related to 3D printing positioning.

28, 2016, we entered into a Sale and Purchase Agreement (“SPA”) with Yingxi Industrial Chain Group Co., Ltd.

which was incorporated under the laws of the Republic of Seychelles and principally engaged in garment manufacture, where we agreed to

acquire 100% of the equity interest in YICG and to issue five hundred million (500,000,000) restricted common shares of the Company to

The completion of the SPA took place on September 25, 2017.

Following the completion of the SPA, YICG’s business became our

have a fiscal year-end of March 31.

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

China 518000.

The business office is located at Kingkey 100, Block A, Room 4805, Luohu District, Shenzhen

City, China 518000.

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

December 28, 2016, Addentax Group Corp.

(“ATXG”

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

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

(“YICG”), a company incorporated under

the laws of the Republic of Seychelles.

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

common shares of the company to the owners of YICG.

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

We are a garment manufacturer and logistics service provider

based in China.

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

(Addentax Group Corp.) are a Nevada holding company with no material operations of our own.

We conduct substantially all of our operations

through our operating companies established in the People’s Republic of China ,

or the PRC, primarily Shenzhen Qianhai Yingxi Industrial Chain Service Co., Ltd.

(“YX”), our wholly owned subsidiary and

its subsidiaries.

We are not a Chinese operating company.

We are a holding company and do not directly own any substantive business operations

Our holding company structure involves unique risks to investors.

Chinese regulatory authorities could disallow our operating

structure, which would likely result in a material change in our operations and/or the value of our common stock, including that it could

cause the value of such securities to significantly decline or become worthless.

Our holding company, Addentax Group Corp., is listed

on the OTCQB under the symbol of “ATXG”.

We classify our businesses into four segments:

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

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

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

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

We conduct our garment manufacturing

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

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

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

In October, the Company

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

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

Although we have our own

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

We believe outsourcing allows us to maximize

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

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

garment manufacturing, logistics

services, property management and subleasing, and epidemic prevention supplies.

the context otherwise requires, all references in this annual report to “ Addentax ” refer to Addentax Group Corp.,

a holding company, and references to “ we, ” “ us, ” “ our, ” the “ Registrant ”,

the “ Company, ” or “ our company ” refer to Addentax and/or its consolidated subsidiaries.

Group Corp., our Nevada holding company, is the entity in which investors are investing.

subsidiaries include (i) Yingxi Industrial Chain Group Co., Ltd., a Republic of Seychelles company;

(ii) Yingxi Industrial Chain Investment

Co., Ltd., a Hong Kong company (“Yingxi HK”);

(iii) Qianhai Yingxi Textile & Garments Co., Ltd., a PRC company;

Shenzhen Qianhai Yingxi Industrial Chain Services Co., Ltd, a PRC company (“YX”), (v) Dongguan Heng Sheng Wei Garments Co.,

Ltd, a PRC company (“HSW”), (vi) Dongguan Yushang Clothing Co., Ltd, a PRC company (“YS”), (vii) Shantou Yi Bai

Yi Garment Co., Ltd, a PRC company (“YBY”), (viii) Shantou Chenghai Dai Tou Garments Co., Ltd, a PRC company (“DT”);

(ix) Shenzhen Xin Kuai Jie Transportation Co., Ltd, a PRC company (“XKJ”), (x) Shenzhen Hua Peng Fa Logistic Co., Ltd, a

PRC company (“HPF”), (xi) Shenzhen Yingxi Peng Fa Logistic Co., Ltd., a PRC company (“PF”), (xii) Shenzhen Yingxi

Tongda Logistic Co., Ltd, a PRC company (“TD”) and (xiii) Dongguan Yingxi Daying Commercial Co., Ltd., a PRC company (“DY”).

Subsidiaries ” refer to, collectively, (i) Qianhai Yingxi Textile & Garments Co., Ltd.;

(ii) Shenzhen Qianhai Yingxi Industrial

Chain Services Co., Ltd (“YX”), (iii) Dongguan Heng Sheng Wei Garments Co., Ltd (“HSW”), (iv) Dongguan Yushang

Clothing Co., Ltd (“YS”);

(v) Shantou Yi Bai Yi Garment Co., Ltd (“YBY”);

(vi) Shantou Chenghai Dai Tou Garments

Co., Ltd (“DT”);

(vii) Shenzhen Xin Kuai Jie Transportation Co., Ltd (“XKJ”);

(viii) Shenzhen Hua Peng Fa Logistic

Co., Ltd (“HPF”);

(ix) Shenzhen Yingxi Peng Fa Logistic Co., Ltd (“PF”).;

(x) Shenzhen Yingxi Tongda Logistic

Co., Ltd (“TD”);

and (xi) Dongguan Yingxi Daying Commercial Co., Ltd (“DY”).

In 2020, the Company disposed DT

and HFP to a third party respectively.

refers to Qianhai Yingxi Textile & Garments Co., Ltd, a wholly foreign owned enterprise in China, which is indirectly wholly owned

by Addentax Group Corp.

garment manufacturing business consists of sales made principally to wholesaler located in the PRC.

We have our own manufacturing facilities,

with sufficient production capacity and skilled workers on production lines to ensure that we meet our high quality control standards

and timely meet the delivery requirements for our customers.

We conduct our garment manufacturing operations through four wholly owned

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

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

located in the Guangdong province, China.

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

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

In October 2020, 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 79 cities in seven provinces and two municipalities in China.

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

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

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

and Shenzhen Yingxi Tongda Logistic Co., Ltd (“TD”), which are located in the Guangdong province, China.

In November 2020,

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;

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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

Daying Commercial Co., Ltd.

(“DY”), which is located in the Guangdong province, China.

epidemic prevention supplies business consists of manufacturing and distribution of epidemic prevention products and resale 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.

prevention products in Dongguan Yushang Clothing Co., Ltd (“YS”).

We conduct the trading of epidemic prevention suppliers

through Addentax and Shenzhen Qianhai Yingxi Industrial Chain Services Co., Ltd (“YX”), a wholly owned subsidiary of the

Company, which is located in the Guangdong province in China.

believe we have the following competitive strengths:

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quality control process.

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

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

We implement a stringent quality control process

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

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

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

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

As of March 31, 2022, we had seven employees in the production department

that are responsible for conducting our quality control process.

We implement a stringent quality control process which monitors various

stages of our garment manufacturing business, including sampling checks of semi-finished products and finished products.

We prepare inspection

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

During final product inspection,

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

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

design capabilities.

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As of March 31, 2022, we provided logistics services to over 79 cities in seven provinces and two municipalities

We plan to open our logistics points in 20 more cities in the PRC in the third and fourth quarters of 2021.

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

in the year of 2023.

international logistics services and warehousing services.

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garment manufacturing business

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

which are located in Guangdong, the PRC.

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

equal to the carrying amount of its net assets.

manufacture garments for various high-end fashion brands through our wholly-owned subsidiaries, HSW, YS, and YBY, which are located in

Guangdong, the PRC.

We sold DT to another third party in October 2020, for consideration of $604,773, equal to the carrying

amount of its net assets.

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

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

needs and make recommendations to them

design team works closely with our customer relationship team to understand our customers’ needs and make recommendations to them

based on their designs.

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

to be used in our customers’

to be used in our customers’ products.

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

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and (vii) ironing.

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

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

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

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logistics business

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

located in Guangdong province, the PRC.

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

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

of its net assets.

pack products and provide logistics service to our customers through our wholly-owned subsidiaries, XKJ and PF which are located in Guangdong

province, the PRC.

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

sold HPF to another third party in November 2020, for consideration of $173,170, equal to the carrying amount of its net assets.

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

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

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

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

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

accounted for more than 30% of net sales which was 35.4% out of total net sales.

For the year ended March 31, 2022, there was

no customer accounted for more than 30% of our net sales.

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

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garment manufacturing business pending approval from the PRC government.

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

and rising local protectionism have eroded its competitiveness.

8 unchanged sentences

of March 31, 2022, we had approximately 126 employees and there was no labor union established by our employees.

The following table

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

The following

table sets out a breakdown of the number of employees by function as of March 31, 2022:

Administration

8 unchanged sentences

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

Please see the section on “Risk Factors”

Please see the section on “Risk Factors” for further

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

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

Limitation on Overseas Listing and Share Issuances

nor our subsidiaries are currently required to obtain approval from Chinese authorities, including the China Securities Regulatory Commission,

or CSRC, or Cybersecurity Administration Committee, or CAC, to list on U.S.

exchanges or issue securities to foreign investors, however,

if our subsidiaries or the holding company were required to obtain approval in the future and were denied permission from Chinese authorities

to list on U.S.

exchanges, we will not be able to continue listing on U.S.

exchange, which would materially affect the interest of the

It is uncertain when and whether the Company will be required to obtain permission from the PRC government to list on U.S.

exchanges in the future, and even when such permission is obtained, whether it will be denied or rescinded.

Although the Company is currently

not required to obtain permission from any of the PRC central or local government to obtain such permission and has not received any

denial to list on the U.S.

exchange, our operations could be adversely affected, directly or indirectly, by existing or future laws and

regulations relating to its business or industry;

if we inadvertently conclude that such approvals are not required when they are, or

applicable laws, regulations, or interpretations change and we are required to obtain approval in the future.

December 24, 2021, the China Securities Regulatory Commission, or the CSRC, issued Provisions of the State Council on the Administration

of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments) (the “Administration Provisions”),

and the Administrative Measures for the Filing of Overseas Securities Offering and Listing by Domestic Companies (the “Measures”),

which were open for public comments by January 23, 2022.

The Administration Provisions and Measures for overseas listings lay out specific

requirements for filing documents and include unified regulation management, strengthening regulatory coordination, and cross-border

regulatory cooperation.

Domestic companies seeking to list abroad must carry out relevant security screening procedures if their businesses

involve supervisions such as foreign investment security and cyber security reviews.

Companies endangering national security are among

those off-limits for overseas listings.

As the Administration Provisions and Measures have not yet come into effect, we are currently

unaffected by them.

However, it is uncertain when the Administration Provision and the Measures will take effect or if they will take

effect as currently drafted.

of the date of this annual report, other than the response we recently received from the CSRC confirming that our offering does not require

the examination and approval of the CSRC in accordance with the existing PRC legislation and regulations (for more details about this

response from the CSRC, see “ Risk Factors – General Risks Associated with Business Operation in China - While the approval

of the China Securities Regulatory Commission is not currently required for our offerings, it may be required in the future in connection

with our offerings under the M&A Rules and, if required, we cannot predict whether we will be able to obtain such approval ”),

we have not received any inquiry, notice, warning, sanctions or regulatory objection to our offerings from the CSRC, CAC or any other

PRC governmental authorities, and we believe our PRC Subsidiaries have obtained all requisite permissions from PRC governmental authorities

to operate our business as currently conducted under relevant PRC laws and regulations.

each of our PRC Subsidiaries holds and maintains a business license issued by the local market supervision and administration bureau,

and has received all requisite permissions in order to conduct and operate our business.

As of the date of this annual report, none of

our PRC Subsidiaries has been denied or punished by relevant governmental authorities due to its business qualifications.

of Cash to and from our Subsidiaries

(Addentax Group Corp.) are a Nevada holding company with no material operations of our own.

We conduct substantially all of our operations

through the operating companies established in the PRC, primarily Shenzhen Qianhai Yingxi Industrial Chain Service Co., Ltd.

our wholly owned subsidiary and its subsidiaries.

We are not a Chinese operating company.

We are a holding company and do not directly

own any substantive business operations in China.

As a result, although other means are available for us to obtain financing at the holding

company level, Addentax’s ability to pay dividends to its shareholders and to service any debt it may incur may depend upon dividends

paid by our PRC Subsidiaries.

If any of our subsidiaries incurs debt on its own in the future, the instruments governing such debt may

restrict its ability to pay dividends to Addentax.

In addition, our PRC Subsidiaries are required to make appropriations to certain statutory

reserve funds, which are not distributable as cash dividends except in the event of a solvent liquidation of the companies.

PRC regulations permit our PRC Subsidiaries to pay dividends to us through Yingxi HK, our intermediate holding subsidiary in Hong Kong,

only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations.

each of our PRC Subsidiaries is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve

until such reserve reaches 50% of its registered capital.

Each of such entity in China is also required to further set aside a portion

of its after-tax profits to fund the employee welfare fund, although the amount to be set aside, if any, is determined at the discretion

of its board of directors.

Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate

future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except

in the event of liquidation.

PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC.

Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency

for the payment of dividends from our profits, if any.

Furthermore, if our PRC Subsidiaries incur debt on their own in the future, the

instruments governing the debt may restrict their ability to pay dividends or make other payments.

dividends, if any, on our common stock will be paid in U.S.

If we are considered a PRC tax resident enterprise for tax purposes,

any dividends we pay to our overseas shareholders may be regarded as China-sourced income and as a result may be subject to PRC withholding

tax at a rate of up to 10.0%.

order for us to pay dividends to our shareholders, we will rely on the distribution of dividends, through the WFOE, to Yingxi HK from

our PRC Subsidiaries.

As of the date hereof, none of our PRC Subsidiaries has distributed any dividends to Yingxi HK.

to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax

Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be lowered to 5% if a Hong Kong resident

enterprise owns no less than 25% of a PRC project.

However, the 5% withholding tax rate does not automatically apply and certain requirements

must be satisfied, including without limitation that (a) the Hong Kong project must be the beneficial owner of the relevant dividends;

and (b) the Hong Kong project must directly hold no less than 25% share ownership in the PRC project during the 12 consecutive months

preceding its receipt of the dividends.

In current practice, a Hong Kong project must obtain a tax resident certificate from the Hong

Kong tax authority to apply for the 5% lower PRC withholding tax rate.

As the Hong Kong tax authority will issue such a tax resident

certificate on a case-by-case basis, we cannot assure you that we will be able to obtain the tax resident certificate from the relevant

Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to dividends

to be paid by our WFOE to its immediate holding company, Yingxi HK.

As of the date of this annual report, we have not applied for the

tax resident certificate from the relevant Hong Kong tax authority.

Yingxi HK intends to apply for the tax resident certificate when

WFOE plans to declare and pay dividends to Yingxi HK.

of the date hereof, we have had no transactions that involved the transfer of cash or assets throughout our corporate structure.

PRC Subsidiaries have not transferred cash or other assets to Addentax, including by way of dividends.

Addentax does not currently plan

or anticipate transferring cash or other assets from our operations in China to any non-Chinese entity.

As of the date hereof, no transfers,

dividends, or distributions have been made to our investors.

Foreign Company Accountable Act

in our securities may be prohibited under the Holding Foreign Companies Accountable Act, or the HFCAA, if the Public Company Accounting

Oversight Board (United States) (the “PCAOB”) determines that it cannot inspect or investigate completely our auditor.

to the HFCAA, the PCAOB issued a Determination Report on December 16, 2021 which found that the PCAOB is unable to inspect or investigate

completely registered public accounting firms headquartered in:

(1) mainland China of the People’s Republic of China because of

a position taken by one or more authorities in mainland China;

and (2) Hong Kong, a Special Administrative Region and dependency of the

PRC, because of a position taken by one or more authorities in Hong Kong.

In addition, the PCAOB’s report identified the specific

registered public accounting firms which are subject to these determinations.

PCAOB is currently unable to conduct inspections in China without the approval of Chinese government authorities.

If it is later determined

that the PCAOB is unable to inspect or investigate our auditor completely, investors may be deprived of the benefits of such inspection.

Any audit reports not issued by auditors that are completely inspected by the PCAOB, or a lack of PCAOB inspections of audit work undertaken

in China that prevents the PCAOB from regularly evaluating our auditors’ audits and their quality control procedures, could result

in a lack of assurance that our financial statements and disclosures are adequate and accurate.

auditor, BF Borgers CPA PC, is an independent registered public accounting firm with the PCAOB, and as an auditor of publicly traded

companies in the U.S., is subject to laws in the U.S.

pursuant to which the PCAOB conducts regular inspections to assess its compliance

with the applicable professional standards.

BF Borgers CPA PC is based in the United States and has been inspected by the PCAOB on a

regular basis, with the last inspection in November and December of 2021.

BF Borgers CPA PC, is not headquartered in

mainland China or Hong Kong and was not identified as a firm subject to the determinations announced by the PCAOB on

December 16, 2021.

Should the PCAOB be unable to fully conduct inspection of our auditor’s work papers in China, it will make it

difficult to evaluate the effectiveness of our auditor’s audit procedures or equity control procedures.

Investors may consequently

lose confidence in our reported financial information and procedures or quality of the financial statements, which would adversely affect

us and our securities.

if trading in our securities is prohibited under the HFCAA in the future because the PCAOB determines that it cannot inspect or fully

investigate our auditor at such future time, an exchange may determine to delist our securities.

on June 22, 2021, the U.S.

Senate passed the Accelerating Holding Foreign Companies Accountable Act (“AHFCAA”), which, if

enacted, would amend the HFCAA and require the SEC to prohibit an issuer’s securities from trading on any U.S.

stock exchanges

if its auditor is not subject to PCAOB inspections for two consecutive years instead of three.

If the AHFCAA is enacted, and if we are

subject to it, it would decrease the number of “non-inspection years” from three years to two years, and thus, would reduce

the time before our securities may be prohibited from trading or delisted.

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

What changed 10-K

Item 1. Business