What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-11-14 compared with 2022-08-15 · 167 added, 124 removed, 341 unchanged (46% of the section changed)

Financial Statements and Supplementary Data

the three months ended June 30, 2021 and 2020

Condensed Consolidated Balance sheets as of June 30, 2022 and March 31, 2022 (unaudited)

Condensed Consolidated Statements of Income and Comprehensive Income for the Three months ended June 30, 2022 and 2021 (unaudited)

Condensed Consolidated Statements of Changes in Equity for the three months ended June 30, 2022 and 2021 (unaudited)

Condensed Consolidated Statements of Cash Flows for the three months ended June 30, 2022 and 2021 (unaudited)

Notes to Condensed Consolidated Financial Statements for the three months ended June 30, 2022 and 2021 (unaudited)

the six months ended September 30, 2022 and 2021

Condensed Consolidated Balance sheets as of September 30, 2022 and March 31, 2022 (unaudited)

Condensed Consolidated Statements of Income and Comprehensive Income for the Six months ended June 30, 2022 and 2021 (unaudited)

Condensed Consolidated Statements of Changes in Equity for the six months ended September 30, 2022 and 2021 (unaudited)

Condensed Consolidated Statements of Cash Flows for the six months ended September 30, 2022 and 2021 (unaudited)

Notes to Condensed Consolidated Financial Statements for the six months ended September 30, 2022 and 2021 (unaudited)

AND SUBSIDIARIES

1 unchanged sentence

Dollars, except share data or otherwise stated)

June 30, 2022

September 30, 2022

March 31, 2022

2 unchanged sentences

Accounts receivables, net

Debt securities held-to-maturity

Prepayments and other receivables

20 unchanged sentences

EQUITY (deficit)

Common stock ($ 0.001 par value, 50,000,000 shares authorized, 26,693,004 shares issued and outstanding at both June 30 and March 31, 2022)

Common stock ($ 0.001 par value, 50,000,000 shares authorized, 31,693,004 shares and 26,693,004 shares issued and outstanding at September 30 and March 31, 2022, respectively)

Additional paid-in capital

10 unchanged sentences

Dollars, except share data or otherwise stated)

and marketing

and administrative

Three months ended

September 30,

Six months ended

September 30,

COST OF REVENUES

( 1,578,858 )

( 2,287,407 )

( 3,508,558 )

( 5,990,433 )

OPERATING EXPENSES

FROM OPERATIONS

income (expense), net

Selling and marketing

General and administrative

Total operating expenses

( 1,015,393 )

INCOME (LOSS) FROM OPERATIONS

Interest income

Interest expenses

Other income, net

INCOME BEFORE INCOME TAX EXPENSE

(LOSS) INCOME

currency translation gain (loss)

COMPREHENSIVE INCOME

(LOSS) PER SHARE

average number of shares outstanding – Basic and diluted

INCOME TAX EXPENSE

Foreign currency translation gain (loss)

TOTAL COMPREHENSIVE INCOME

EARNINGS PER SHARE

Basic and diluted

Weighted average number of shares outstanding – Basic and diluted

accompany notes to the unaudited condensed consolidated financial statements.

7 unchanged sentences

comprehensive loss

BALANCE AT MARCH 31, 2021

BALANCE AT JUNE 30, 2021

$ ( 6,755,281 )

2 unchanged sentences

Net income for the period

BALANCE AT SEPTEMBER 30, 2021

$ ( 6,723,260 )

$ ( 137,259 )

BALANCE AT JUNE 30, 2022

$ ( 6,659,559 )

Paid in capital

Foreign currency translation

Net income for the period

BALANCE AT SEPTEMBER 30, 2022

$ ( 6,576,342 )

4 unchanged sentences

Net income for the period

BALANCE AT JUNE 30, 2022

BALANCE AT SEPTEMBER 30, 2021

$ ( 6,723,260 )

$ ( 137,259 )

BALANCE AT MARCH 31, 2022

$ ( 6,756,230 )

$ ( 170,984 )

Paid in capital

Foreign currency translation

Net income for the period

BALANCE AT SEPTEMBER 30, 2022

$ ( 6,576,342 )

accompany notes to the unaudited condensed consolidated financial statements.

2 unchanged sentences

Dollars, except share data or otherwise stated)

Three Months Ended June 30

Six Months Ended September 30

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

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

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation and amortization

Changes in operating assets and liabilities

Accounts receivable

( 2,031,892 )

Advances to suppliers

( 1,114,244 )

Other receivables

( 1,561,056 )

Accounts payables

( 1,347,677 )

( 1,801,257 )

Accrued expenses and other payables

4 unchanged sentences

Purchase of plant and equipment and other assets

Purchase of debt securities

( 17,500,000 )

Net cash used in investing activities

$ ( 17,500,000 )

$ ( 142,922 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issue of ordinary shares

Proceeds from related party borrowings

Repayment of related party borrowings

( 2,803,515 )

( 2,762,272 )

Repayment of bank borrowings

Net cash provided by financing activities

$ ( 1,138,547 )

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

( 1,130,987 )

Effect of exchange rate changes on cash and cash equivalents

29 unchanged sentences

(“SEC”) on June 23, 2022 (“2022 Form 10-K”).

CONCERN UNCERTAINTY

accompanying unaudited condensed consolidated financial statements are presented on the basis that the Company is a going concern.

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

Company incurred net income of $ 96,671 and

the three months ended June 30, 2022 and 2021, respectively.

As of June 30, 2022 and March 31, 2022, the Company had net current liability

of $ 4,240,999 and

$ 4,703,213 ,

respectively, and total equity of $ 130,453

and a deficit on total equity of $ 71,367 ,

respectively.

Company expects to finance operations primarily through cash flow from revenue, capital contributions from the CEO and proceeds from proposed IPO.

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.

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.

We are subject

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

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.

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

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

5 unchanged sentences

however actual results could differ materially from those estimates.

is no change on the accounting policies for the three months ended June 30, 2022.

is no change on the accounting policies for the three months ended September 30, 2022.

issued accounting pronouncements

17 unchanged sentences

CEO, and a director of the Company

Financial Consulting (Shenzhen) Co., Ltd.

company controlled by CEO, Mr.

legal representative of Shenzhen Xin Kuai Jie Transportation Co., Ltd (“XKJ”), a wholly subsidiary of our Company

Manager of XKJ, ceased to be general manager of XKJ since May, 2022

legal representative of Shantou Yi Bai Yi Garments Co., Ltd (“YBY”), a wholly-owned subsidiary of our Company

spouse of legal representative of Dongguan Heng Sheng Wei Garments Co., Ltd (“HSW”), a wholly owned subsidiary of our Company

spouse of legal representative of Dongguan Heng Sheng Wei Garments Co., Ltd (“HSW”), a wholly owned subsidiary of our

legal representative of Shenzhen Yingxi Peng Fa Logistic Co., Ltd (“PF”), a wholly-owned subsidiary of our Company

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

Company had the following related party balances as of June 30, 2022 and March 31, 2022:

Company had the following related party balances as of September 30, 2022 and March 31, 2022:

SCHEDULE OF RELATED PARTIES

due from related party

Financial Consulting (Shenzhen) Co., Ltd.

party borrowings

Amount due from related party

September 30, 2022

Hongye Financial Consulting (Shenzhen) Co., Ltd.

Related party borrowings

September 30, 2022

Zhida Hong ( 1 )

Bihua Yang ( 2 )

Jinlong Huang

interest free loan as financial support from Zhida Hong to daily operation of the Company.

interest free loan as financial support from Zhiyong Zhou to pay for daily operating expenditures of XKJ.

financial support from Bihua Yang for XKJ’s daily operation.

1 unchanged sentence

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

consist of the following as of June 30, 2022 and March 31, 2022:

DEBT SECURITIES HELD-TO-MATURITY

OF DEBT SECURITIES HELD-TO-MATURITY

September 30, 2022

March 31, 2022

Debt securities held-to-maturity

Company purchased a note issued by a third-party investment company in August 24, 2022.

The principal amount of the note is $ 17,500,000 .

The note was renewable with one-year tenor and 2.5 %

consist of the following as of September 30, 2022 and March 31, 2022:

SCHEDULE OF INVENTORIES

June 30, 2022

September 30, 2022

March 31, 2022

13 unchanged sentences

PREPAYMENTS AND OTHER RECEIVABLES

and other receivables consist of the following as of June 30, 2022 and March 31, 2022:

and other receivables consist of the following as of September 30, 2022 and March 31, 2022:

SCHEDULE OF PREPAYMENTS AND OTHER RECEIVABLES

June 30, 2022

September 30, 2022

March 31, 2022

4 unchanged sentences

PROPERTY, PLANT AND EQUIPMENT

plant and equipment consists of the following as of June 30, 2022 and March 31, 2022:

plant and equipment consists of the following as of September 30, 2022 and March 31, 2022:

SCHEDULE OF PROPERTY PLANT AND EQUIPMENT

June 30, 2022

September 30, 2022

March 31, 2022

5 unchanged sentences

Plant and equipment, net

expense for the three months ended June 30, 2022 and 2021 was $ 35,883 and $ 33,986 , respectively.

expense for the three and six months ended September 30, 2022 and 2021 was $ 32,948 and $ 42,008 , $ 68,832 and $ 71,397 , respectively.

SHORT-TERM BANK LOAN

2 unchanged sentences

The loans are guaranteed at no cost by the legal representative

As of June 30, 2022, the Company has borrowed $ 142,591 (RMB 955,281 ) (March 31, 2022:

$ 151,090 ) under this line of credit with

various annual interest rates from 4.84 % to 4.9 %.

As of September 30, 2022, the Company has borrowed $ 134,245 (RMB 955,281 ) (March 31, 2022:

$ 151,090 ) under this line of credit

with various annual interest rates from 4.84 % to 4.9 % .

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

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

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.

Income Tax (“EIT”)

1 unchanged sentence

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.

and is not subject to income taxes.

It’s wholly owned subsidiary of Addentax Group Corp.

HK (Yingxi Industrial Chain Investment Co., Ltd.) was incorporated in Hong Kong which is indirectly wholly owned by Addentax Group

Corp., and is subject to Hong Kong income tax at a progressive rate of 16.5 %.

No provision for income taxes in Hong Kong has been made as Yingxi HK had no taxable income for the three months ended June 30, 2022

YX, our wholly owned subsidiary,

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 months ended June 30, 2022 and 2021.

HK (Yingxi Industrial Chain Investment Co., Ltd.) was incorporated in Hong Kong which is indirectly wholly owned by Addentax Group Corp.,

and is subject to Hong Kong income tax at a progressive rate of 16.5 % .

No provision for income taxes in Hong Kong have been made as Yingxi

HK had no taxable income for the three and six months ended September 30, 2022 and 2021.

our wholly owned subsidiary, were incorporated in the PRC and is subject to the EIT tax rate of 25 % .

No provision for income taxes in

the PRC have been made as YX had no taxable income for the three and six months ended Septermber 30, 2022 and 2021.

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

4 unchanged sentences

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 three months

ended June 30, 2022 and 2021.

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

had no United States taxable income for the three and six

months ended September 30, 2022 and 2021.

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

1 unchanged sentence

Three months ended

Six months ended

September 30,

PRC statutory tax rate

Computed expected benefits (expense)

Computed expected benefits

Temporary differences

32 unchanged sentences

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

by segment for the three months ended June 30, 2022 and 2021 are as follows:

OF SEGMENT REPORTING FOR REVENUE

by segment for the three and six months ended September, 2022 and 2021 are as follows:

SCHEDULE OF SEGMENT REPORTING FOR REVENUE

Three months ended

Six months ended

September 31,

Revenues from external customers

6 unchanged sentences

Garments manufacturing segment

from operations by segment for the three ended June 30, 2022 and 2021 are as follows:

OF SEGMENT REPORTING FOR INCOME FROM OPERATION

(loss) from operations by segment for the three and six months ended September 30, 2022 and 2021 are as follows:

SCHEDULE OF SEGMENT REPORTING FOR INCOME FROM OPERATION

Three months ended

Garment manufacturing segment

Six months ended

September 30,

Garments manufacturing segment

Logistics services segment

Property management and subleasing

Epidemic prevention supplies

Epidemic prevention supplies segment

Total of reportable segments

Corporate and other

Total consolidated income from operations

assets by segment as at June 30, 2022 and March 31, 2022 are as follows:

OF SEGMENT REPORTING FOR ASSETS

March 31, 2022

Total consolidated income (loss) from operations

assets by segment as at September 30, 2022 and March 31, 2022 are as follows:

SCHEDULE OF SEGMENT REPORTING FOR ASSETS

September 30,

Garment manufacturing segment

10 unchanged sentences

Three months ended

June 30, 2022

September 30,

Six months ended

September 30,

September 30, 2022

March 31, 2022

2 unchanged sentences

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 June 30, 2022, with discounted rate of

Lease liabilities are measured at present value of the sum of remaining rental payments as of September 30, 2022, with discounted rate

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

10 unchanged sentences

Three months ended

September 30,

Six months ended

September 30,

Operating lease cost

3 unchanged sentences

Three months ended

September 30,

Six months ended

September 30,

Cash paid for amounts included in the measurement of lease liabilities

5 unchanged sentences

SCHEDULE OF OPERATING LEASE LIABILITY

Years ending June 30

Years ending September 30

Total lease payments

18 unchanged sentences

currencies are the RMB, all assets and liabilities are translated at exchange rates at the balance sheet date, which was 7.116 and 6.341

as of June 30, 2022 and March 31, 2022, respectively.

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

was 6.603 and 6.461 for the three months ended June 30, 2022 and 2021, 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.

as of September 30, 2022 and March 31, 2022, respectively.

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

which was 6.723 and 6.466 for the six months ended September 30, 2022 and 2021, respectively.

Equity is translated at historical exchange

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 June

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

30, 2022 and March 31, 2022.

1 unchanged sentence

manufacturing segment

high concentration as of June 30, 2022 was mainly due to business development of a large distributor of garments.

September 30, 2022

March 31, 2022

high concentration as of September 30, 2022 was mainly due to business development of a large distributor of garments.

Management believes

1 unchanged sentence

services segment

June 30, 2022

March 31, 2022

management and subleasing segment

is no account receivable for Property management and subleasing segment as for March 31, 2022.

is no account receivable for Property management and subleasing segment as of both September 30, 2022 and March 31, 2022.

prevention supplies segment

accounts receivable of Epidemic prevention supplies segment as at June 30, 2022 was from one customer only.

the three months ended June 30, 2022, one customer from Logistics services segment provided more than 10% of total revenue of the Company,

represented 13.1 % of total revenue of the Company for the three months.

For the three months ended June 30, 2021, one customer from garment

segment provided more than 10% of total revenue of the Company, represented 98.8 % of total revenue of the Company for the three months.

accounts receivable of Epidemic prevention supplies segment, as at both September 30, 2022 and March 31, 2022, was from one customer

the three months ended September 30, 2022, no customer provided more than 10% of total revenue of the Company.

For the six months ended

September 30, 2022, one customer from garment segment provided more than 10% of total revenue of the Company, represented 10.5 % of total

revenue of the Company for the six months.

For 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

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 months ended June

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

30, 2022 and 2021.

1 unchanged sentence

Three months ended

Six months ended

September 30,

Garment manufacturing segment

4 unchanged sentences

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

As of June 30, 2022, the total outstanding borrowings

As of September 30, 2022, the total outstanding borrowings

amounted to $ 134,245 (RMB 955,281 ) with various interest rate from 4.84 % to 6.96 % p.a.

8 unchanged sentences

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