What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2022-06-23 compared with 2021-06-29 · 9 added, 532 removed, 26 unchanged (95% of the section changed)

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchasers of Equity Securities

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

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchasers of Equity Securities

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

1 unchanged sentence

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

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

of Our Common Stock

shares of common stock were issued and outstanding as of June 23, 2022.

They were held by a total of 555 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.

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 securities.

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.

7 unchanged sentences

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

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.

8 unchanged sentences

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

applicable to smaller reporting companies .

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, 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,”

“estimate,”

“plan,”

“project,”

“continuing,”

“ongoing,”

“expect,”

“believe,”

“intend,”

“may,”

“will,”

“should,”

“could,”

“target”, “forecast”

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 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

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.

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’

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.

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.

and Assumptions

regularly evaluate the accounting estimates that we use to prepare our financial statements.

In general, management’s estimates

are based on historical experience, on information from third party professionals, and on various other assumptions that are believed

to be reasonable under the facts and circumstances.

Actual results could differ from those estimates made by management.

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

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

of the promised goods and services in the contract;

determination

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;

of the transaction price to the performance obligations;

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.

Company determines if an arrangement is a lease at inception.

Operating leases are included in operating lease right-of-use (“ROU”)

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

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

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

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.

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 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

Other income, net

Net finance cost

Income tax expense

$ (3,590,169 )

$ (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

Raw materials

Other and Overhead

cost of revenue for garment manufacturing

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

$ (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.

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.

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 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:

Selling expenses

General and administrative

$ (2,420,997 )

$ (2,249,679 )

Loss from operations

$ (3,608,174 )

General and administrative expenses

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 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.

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.

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, 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, 2021 and 2020.

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

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 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:

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, 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 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 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 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.

dollar and the Chinese Renminbi (“RMB”).

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 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, 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

applicable to smaller reporting companies.

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