What changed in this filing

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Item 1. Financial Statements

2023-02-14 compared with 2022-11-14 · 134 added, 121 removed, 387 unchanged (40% of the section changed)

Financial Statements and Supplementary Data

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)

the nine months ended December 31, 2022 and 2021

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

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

Condensed Consolidated Statements of Changes in Equity for the nine months ended December 31, 2022 and 2021 (unaudited)

Condensed Consolidated Statements of Cash Flows for the nine months ended December 31, 2022 and 2021 (unaudited)

Notes to Condensed Consolidated Financial Statements for the nine months ended December 31, 2022 and 2021 (unaudited)

AND SUBSIDIARIES

1 unchanged sentence

Dollars, except share data or otherwise stated)

September 30, 2022

December 31, 2022

March 31, 2022

25 unchanged sentences

EQUITY (deficit)

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)

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

Additional paid-in capital

11 unchanged sentences

Three months ended

September 30,

Six months ended

September 30,

Nine months ended

COST OF REVENUES

6 unchanged sentences

General and administrative

( 1,545,865 )

( 1,375,513 )

Total operating expenses

( 1,606,020 )

INCOME (LOSS) FROM OPERATIONS

( 1,510,823 )

(LOSS) INCOME FROM OPERATIONS

Interest income

1 unchanged sentence

Other income, net

INCOME BEFORE INCOME TAX EXPENSE

(LOSS) INCOME BEFORE INCOME TAX EXPENSE

INCOME TAX EXPENSE

NET (LOSS) INCOME

Foreign currency translation gain (loss)

TOTAL COMPREHENSIVE INCOME

TOTAL COMPREHENSIVE (LOSS) INCOME

$ ( 125,250 )

EARNINGS PER SHARE

5 unchanged sentences

Dollars, except share data or otherwise stated)

Statutory reserve

comprehensive loss

Retained earnings

3 unchanged sentences

comprehensive loss

BALANCE AT JUNE 30, 2021

BALANCE AT SEPTEMBER 30, 2021

$ ( 6,723,260 )

2 unchanged sentences

Net income for the period

BALANCE AT SEPTEMBER 30, 2021

BALANCE AT DECEMBER 31, 2021

$ ( 6,711,641 )

$ ( 166,014 )

BALANCE AT JUNE 30, 2022

BALANCE AT SEPTEMBER 30, 2022

$ ( 6,576,342 )

Paid in capital

Appropriation to Statutory Reserves

Foreign currency translation

Net income for the period

BALANCE AT SEPTEMBER 30, 2022

Net loss for the period

BALANCE AT DECEMBER 31, 2022

$ ( 6,673,191 )

4 unchanged sentences

Net income for the period

BALANCE AT SEPTEMBER 30, 2021

BALANCE AT DECEMBER 31, 2021

$ ( 6,711,641 )

4 unchanged sentences

Paid in capital

Appropriation to Statutory Reserves

Foreign currency translation

Net income for the period

BALANCE AT SEPTEMBER 30, 2022

Net income (loss)

BALANCE AT DECEMBER 31, 2022

$ ( 6,673,191 )

3 unchanged sentences

Dollars, except share data or otherwise stated)

Six Months Ended September 30

Nine Months Ended December 31

CASH FLOWS FROM OPERATING ACTIVITIES:

12 unchanged sentences

Advances from customers

Net cash provided by (used in) operating activities

Net cash (used in) provided by operating activities

$ ( 1,528,118 )

13 unchanged sentences

Repayment of bank borrowings

Net cash provided by financing activities

Net cash provided by (used in) financing activities

$ ( 1,543,573 )

13 unchanged sentences

ORGANIZATION AND BUSINESS ACQUISITIONS

and its subsidiaries (the “Company”) are engaged in the business of garments manufacturing, providing logistic services,

property leasing and management service in the People’s Republic of China (“PRC” or “China”) and epidemic

prevention supplies manufacturing and distribution both in China and overseas markets.

and its subsidiaries (the “Company”) are engaged in the business of garments manufacturing, providing logistic services and

property leasing and management service in the People’s Republic of China (“PRC” or “China”).

BASIS OF PRESENTATION

21 unchanged sentences

however actual results could differ materially from those estimates.

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

is no change on the accounting policies for the three months ended December 31, 2022.

issued accounting pronouncements

13 unchanged sentences

RELATED PARTY TRANSACTIONS

SCHEDULE OF RELATED PARTIES RELATIONSHIP WITH THE COMPANY

OF RELATED PARTIES RELATIONSHIP WITH THE COMPANY

of Related Parties

8 unchanged sentences

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

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

SCHEDULE OF RELATED PARTIES

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

OF RELATED PARTY TRANSACTION

Amount due from related party

September 30, 2022

December 31, 2022

March 31, 2022

Hongye Financial Consulting (Shenzhen) Co., Ltd.

Related party borrowings

September 30, 2022

December 31, 2022

March 31, 2022

Zhida Hong (1)

Hongye Financial Consulting (Shenzhen) Co., Ltd.

Bihua Yang (2)

6 unchanged sentences

OF DEBT SECURITIES HELD TO MATURITY

September 30, 2022

December 31, 2022

March 31, 2022

Debt securities held-to-maturity

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

Company purchased a note issued by a third-party investment company on 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

September 30, 2022

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

consist of the following as of December 31, 2022 and March 31, 2022:

OF INVENTORIES

December 31, 2022

March 31, 2022

13 unchanged sentences

PREPAYMENTS AND OTHER RECEIVABLES

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

SCHEDULE OF PREPAYMENTS AND OTHER RECEIVABLES

September 30, 2022

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

OF PREPAYMENTS AND OTHER RECEIVABLES

December 31, 2022

March 31, 2022

1 unchanged sentence

Other receivables

Total prepayments

and other receivables

PROPERTY, PLANT AND EQUIPMENT

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

SCHEDULE OF PROPERTY PLANT AND EQUIPMENT

September 30, 2022

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

OF PROPERTY PLANT AND EQUIPMENT

December 31, 2022

March 31, 2022

2 unchanged sentences

Office equipment

Plant and equipment, gross

accumulated depreciation

Plant and equipment, net

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.

expense for the three and nine months ended December 31, 2022 and 2021 was $ 33,817 and $ 44,164 , $ 102,649 and $ 115,561 , respectively.

SHORT-TERM BANK LOAN

2 unchanged sentences

The loans are guaranteed at no cost by the legal representative

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

As of December 31, 2022, the Company has borrowed $ 138,265 (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 outstanding loan balance was due on December 31, 2021.

The Company was not

10 unchanged sentences

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.

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

the PRC have been made as YX had no taxable income for the three and nine months ended December 31, 2022 and 2021.

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

5 unchanged sentences

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.

had no United States taxable income for the three and nine

months ended December 31, 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,

Nine months ended

PRC statutory tax rate

7 unchanged sentences

value of sales and is payable by the purchaser.

The subsidiaries HSW, YBY and YS enjoyed preferential VAT rate of 13 % .

The Companies

are required to remit the VAT they collect to the tax authority.

A credit is available whereby VAT paid on purchases can be used to offset

the VAT due on sales.

The subsidiaries HSW, YBY, OTX, ZHJ and YS enjoyed preferential VAT rate of 13 % .

Companies are required to remit the VAT they collect to the tax authority.

A credit is available whereby VAT paid on purchases can be

used to offset the VAT due on sales.

services, the applicable VAT rate is 9 % under the relevant tax category for logistic company, except the branch of YXPF enjoyed the preferential

9 unchanged sentences

The Company reports financial and operating

information in the following four segments:

information in the following three segments:

manufacturing .

1 unchanged sentence

Providing logistic services;

prevention supplies .

Including manufacturing, distribution and trading of epidemic prevention supplies.

management and subleasing.

2 unchanged sentences

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

Company used to have an operating segment named “Epidemic prevention supplies”, which included manufacturing, distribution

and trading of epidemic prevention supplies.

As the COVID-19 pandemic is getting better, the Company ceased to operate in the Epidemic

prevention supplies business at the beginning of the quarter.

The remaining assets of the segment was reclassified into the “Corporate

and others” segment.

The corresponding items of segment information for the earlier periods was restated to reflect the change

of the new segment structure.

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

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

SCHEDULE OF SEGMENT REPORTING FOR REVENUE

by segment for the three and nine months ended December 31, 2022 and 2021 are as follows:

OF SEGMENT REPORTING FOR REVENUE

Revenues from external customers

Three months ended

Six months ended

September 31,

Nine months ended

Revenues from external customers

2 unchanged sentences

Property management and subleasing

Epidemic prevention supplies segment

Total of reportable segments and consolidated revenue

Total of reportable segments

Corporate and other

Total consolidated revenue

Intersegment revenue

Garments manufacturing segment

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

(loss) from operations by segment for the three and nine months ended December 31, 2022 and 2021 are as follows:

SCHEDULE OF SEGMENT REPORTING FOR INCOME FROM OPERATION

Three months ended

Six months ended

September 30,

Nine months ended

Garments manufacturing segment

1 unchanged sentence

Property management and subleasing

Epidemic prevention supplies segment

Total of reportable segments

1 unchanged sentence

Total consolidated income (loss) from operations

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

assets by segment as of December 31, 2022 and March 31, 2022 are as follows:

SCHEDULE OF SEGMENT REPORTING FOR ASSETS

September 30,

Garment manufacturing segment

1 unchanged sentence

Property management and subleasing

Epidemic prevention supplies

Total of reportable segments

6 unchanged sentences

Three months ended

September 30,

Six months ended

September 30,

September 30, 2022

March 31, 2022

Nine months ended

December 31, 2022

Long-Lived Assets

1 unchanged sentence

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

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

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

Nine months ended

Operating lease cost

3 unchanged sentences

Three months ended

September 30,

Six months ended

September 30,

Nine months ended

Cash paid for amounts included in the measurement of lease liabilities

4 unchanged sentences

following table summarizes the maturity of operating lease liabilities:

SCHEDULE OF OPERATING LEASE LIABILITY

Years ending September 30

SCHEDULE OF MATURITY OF OPERATING LEASE

Years ending December 31

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 6.909 and 6.341

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.

as of December 31, 2022 and March 31, 2022, respectively.

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

was 6.852 and 6.466 for the nine months ended December 31, 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.

Concentration

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

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

31, 2022 and March 31, 2022.

1 unchanged sentence

manufacturing segment

September 30, 2022

December 31, 2022

March 31, 2022

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

high concentration as of December 31, 2022 was mainly due to business development of a large distributor of garments.

Management believes

1 unchanged sentence

services segment

December 31, 2022

March 31, 2022

management and subleasing segment

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 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

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

the three months ended December 31, 2022, one customer from logistics services segment provided more than 10 % of total revenue of the

Company, represented 11.8 % of total revenue of the Company for the three months.

For the nine months ended December 31, 2022, one customer

from logistics services segment provided more than 10 % of total revenue of the Company, represented 10.8 % of total revenue of the Company

for the nine months.

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

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

24.8 % of total revenue for the nine months.

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 September

30, 2022 and 2021.

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

ended December 31, 2022 and 2021.

SCHEDULE OF PURCHASES FROM SUPPLIERS

Three months ended

Six months ended

September 30,

Nine months ended

Garment manufacturing segment

1 unchanged sentence

Property management and subleasing

Epidemic prevention supplies

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

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

As of September 30, 2022, the total outstanding borrowings

As of December 31, 2022, the total outstanding borrowings

amounted to $ 138,265 (RMB 955,281 ) with various interest rate from 4.84 % to 6.96 % p.a.

7 unchanged sentences

repayment obligations with receivable collections.

SUBSEQUENT EVENTS

January 4, 2023, Addentax Group Corp.

(the “Company”) entered into a Securities Purchase Agreement (the “Securities

Purchase Agreement) with certain accredited investors (the “Purchasers”), pursuant to which the Company received a net proceed

of $ 15,000,000 in consideration of the issuance of:

senior secured convertible notes in the aggregate original principal amount of $ 16,666,666.66 (the “Convertible

warrants to purchase up to 16,077,172 shares of common stock of the Company (the “Common Stock”) until on or prior to

(New York time) on the five year anniversary of the closing date at an exercise price of $ 1.25 per share.

transactions contemplated under the Securities Purchase Agreement closed on January 4, 2023.

The Company intends to use the proceeds

from the issuance of the Convertible Notes and the PIPE Warrants for general corporate purposes.

Convertible Notes bear interest at an interest rate of 5 % per annum payable on each installment date commencing on the original date

January 10, 2023, the Company entered into an amendment (the “Amendment”, and the Original Purchase Agreement, as amended,

the “Purchase Agreement”) to the Original Purchase Agreement with each Investor in accordance with the terms of the Original

Purchase Agreement.

Under the Amendment, the original increase in the authorized shares of the Company from 50,000,000 to 150,000,000

was increased to 250,000,000 .

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