What changed in this filing

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Item 1. Business

2023-06-29 compared with 2022-06-23 · 242 added, 175 removed, 243 unchanged (63% of the section changed)

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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.

December 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

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have a fiscal year-end of March 31.

The business office is located at Kingkey 100, Block A, Room 4805, 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.

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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.

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:

garment manufacturing, logistics

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

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

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 Nasdaq Capital Market under the symbol of “ATXG”.

We classify our businesses into three segments:

garment manufacturing, logistics services, and property management and subleasing.

Company previously engaged in the provision of epidemic prevention supplies, which included manufacturing, distribution and trading of

epidemic prevention supplies.

As the COVID-19 pandemic is near an endemic, the Company ceased to operate in this business in the first

quarter of 2023.

The remaining assets of this business segment were reclassified into the “Corporate and others” segment.

The corresponding

items of segment information for the earlier periods were restated to reflect the change of the new segment structure.

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

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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”).

Our 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

(iv) 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) Shenzhen Yingxi Peng Fa Logistic Co., Ltd., a

PRC company (“PF”);

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

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

(“DY”), (xii) Zhuang Hao Jia (Dongguan) Decoration Engineering Co.,Ltd, a PRC company (“ZHJ”), and

(xiii) Dongguan Au Te Si Garments Co., Ltd., a PRC company (“AOT”).

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”);

(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.

(vi) Shenzhen

Yingxi Peng Fa Logistic Co., Ltd., a PRC company (“PF”);

(vii) Shenzhen Xin Kuai Jie Transportation Co., Ltd, a PRC

company (“XKJ”), (viii) Shenzhen Yingxi Tongda Logistic Co., Ltd, a PRC company (“TD”), (ix) Dongguan Yingxi

Daying Commercial Co., Ltd., a PRC company (“DY”), (x) Zhuang Hao Jia (Dongguan) Decoration Engineering Co.,Ltd, a PRC

company (“ZHJ”), and (xi) Dongguan Aotesi Garments Co., Ltd.,, a PRC company (“AOT”).

In February 2023, the Company disposed DY to an independent third party.

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

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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 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 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 five 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”), Zhuang

Hao Jia (Dongguan) Decoration Engineering Co.,Ltd (“ZHJ”), and Dongguan Aotesi Garments Co., Ltd.,

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

logistics business consists of delivery and courier services covering 86 cities in 11 provinces and three municipalities in China.

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

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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;

therefore, the disposition of the two subsidiaries

did not qualify as discontinued operations.

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

Ltd (“XKJ”), Shenzhen Yingxi Peng Fa Logistic Co., Ltd (“PF”) and Shenzhen Yingxi Tongda Logistic Co., Ltd (“TD”),

which are located in the Guangdong province, China.

property management and subleasing business provides shops subleasing and property management services for garment wholesalers and retailers

in garment market.

in the garment market.

We conduct our property management and subleasing operation through a wholly owned subsidiary, namely Dongguan Yingxi

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(“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 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.

February 2023, the Company disposed of DY to an independent third party at fair value, which was also its carrying value as of February 28, 2023.

business operations, customers and suppliers of DY were retained by the Company;

therefore, the disposition of the subsidiary did not

qualify as discontinued operations.

believe we have the following competitive strengths:

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quality control process.

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

As of March 31, 2023, we had 6 employees in the production department

that are responsible for conducting our quality control process.

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As of March 31,

2022, our design team consisted of five members.

2023, our design team consisted of 4 members.

delivery network.

Our logistics business has nine routes and covers 79 cities in seven provinces and two municipalities in the PRC.

Production Supply Chain.

We integrated various epidemic prevention suppliers located in China & Malaysia and established strategic

cooperation relationship with them, which can help us to purchase the epidemic prevention products in competitive lower price and stable

We also received mask production license from relevant governance and some of the products we manufactured passed the inspection

of quality inspection agency.

Our logistics business has nine routes and covers 86 cities in 11 provinces and 3 municipalities in the PRC.

elements of our business and growth strategies include the following:

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our delivery network.

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

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

in the year of 2023.

As of March 31, 2023, we provided logistics services to over 86 cities in 11 provinces and three municipalities

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

profits in the year 2023.

international logistics services and warehousing services.

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all over the world and international warehousing services.

of international trading.

We developed our international trading during the global epidemic situation of Covid-19 to import and export

diverse epidemic protection products including medical masks, latex gloves etc.

E-commerce business.

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together to drive to increase the value of the stores in the area.

our epidemic prevention supply chain.

We intend to develop our own epidemic prevention supply

chain as we see the potential and opportunity of medical and health industry.

We expect to establish a one-step epidemic prevention supply

chain from product manufacturing line establishment to sales networking construction.

Currently, we are focusing on the civil mask market

in China and provide cost-effective masks to customers.

We will improve our product quality constantly and develop oversee markets.

garment manufacturing business

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.

manufacture garments for various high-end fashion brands through our wholly-owned subsidiaries, HSW, YS, YBY, ZHJ, AOT, which

are located in Guangdong, the PRC.

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

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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’ products.

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

fabric to be used in our customers’ products.

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

Our fabric team works

with our research and development team to understand fabric types and aims to identify different fabric we source and improve the quality

and comfort of the fabric we produce.

product and technical team is mainly responsible for development samples of products, preparing structural and production guidance of

fabric team works with our research and development team to understand fabric types and aims to identify different fabric we source

and improve the quality and comfort of the fabric we produce.

product and technical team are mainly responsible for development samples of products, preparing structural and production guidance of

products as well as producing paper patterns for our garment production team.

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team requires four to six weeks to source raw materials from our suppliers.

garment production team is responsible for produce garments based on the raw materials we source.

garment production team is responsible for producing garments based on the raw materials we source.

The major stages involved in garment

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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

the delivery of finished goods.

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.

For our new customers, we generally require advances or deposits to be made when placing orders.

logistics business

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.

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

in Guangdong province, the PRC.

Our in-house logistics teams deliver to approximately 11 provinces and three municipalities in

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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We also provide customs declaration and tax clearance service to our customers who export goods to overseas.

have 758 logistics points and they are located in seven provinces and two municipalities which cover 79 cities in the PRC.

have 848 logistics points and they are located in 11 provinces and three municipalities which cover 86 cities in the PRC.

internal management

management in logistics business is responsible for setting out business strategies and managing the daily operation.

Specifically, they

have regular meetings with different departments, conduct inspection and supervise the finance department, operation department and administration

management in the logistics business is responsible for setting out business strategies and managing the daily operation.

Specifically, they have regular meetings with different departments, conduct inspection and supervise the finance department,

operation department and administration department.

generally receive more delivery orders in our third and fourth quarters and are more vulnerable to shipping delays in the PRC during

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customer base is diverse.

Our customers in garment manufacturing business are mainly garment wholesalers and retailers and our customers

in logistics business are mainly trading companies and logistic companies.

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

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.

Our customers in the garment manufacturing business are mainly garment wholesalers and retailers and our

customers in logistics business are mainly trading companies and logistic companies.

No single customers accounted for more than 30%

of our net sales for the years ended March 31, 2022 and 2023

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

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from packing companies and transportation companies.

No single supplier accounted for more than 30% of our total costs for the years

ended March 31, 2021 and 2022.

No single supplier accounted for more than 30% of our total costs for

the years ended March 31, 2022 and 2023.

manufacturing business .

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We do not need to carry a significant amount of inventory due to the nature of the business.

prevention supplies business.

Since we procured and manufactured epidemic prevention supplies on order basis, we maintain low level

of inventories and do not have slow-moving items.

currently do not own any intellectual property rights.

We are in the process of registering trademarks and copyright in relation to our

garment manufacturing business pending approval from the PRC government.

Company, through its subsidiary Shenzhen Qianhai Industrial Chain Co.Ltd., herein referred as “YX,” received the approval

of the trademarks below in relation to its business from PRC government.

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

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principal competitive factors in the garment manufacturing market include:

awareness and focus;

of product offerings;

brand awareness and focus;

breadth of product offerings;

quality control.

principal competitive factors in the logistics market include:

principal competitive factors in the epidemic prevention supply market include:

delivery time;

network coverage.

principal competitive factors in the property management and subleasing market include:

Cost control;

network coverage.

believe we compete favorably with our competitors on the basis of the above factors as a result of our market position and customer base.

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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.

we 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.

exchange, which would materially affect the interest

of the investors.

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

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.

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

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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 ”),

of the date of this prospectus, other than the response we recently received from the CSRC confirming that our offering under this prospectus

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

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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.

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

Based on our understanding of

the PRC laws and regulations, our PRC businesses only require business licenses issued and approved from the relevant local authorities

and do not require any other permissions or approvals to operate their PRC business operations.

Further, we have not relied upon an opinion

of a PRC counsel in drawing such conclusion in the current registration statement for the following reasons:

(i) during our IPO process

which was closed on September 2, 2022, we previously engaged a local PRC counsel, Hiways Law Firm (Shenzhen), to assist with the PRC

disclosures in the IPO registration statement on Form S-1 and Hiways Law Firm (Shenzhen) confirmed such conclusion;

(ii) the time period

between the IPO and the submission of the current registration statement on January 25, 2023 is not substantial;

(iii) no material changes

occurred with respect to our PRC business operations since the IPO;

and (iv) the expenses of engaging Hiway Law Firm or another PRC counsel

for the current registration statement will be unduly burdensome on the Company;

and thus, the Company has not sought out to engage a

PRC counsel to obtain an additional opinion for the current registration statement.

As of the date of this prospectus, none of our PRC

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

In addition, we (Addentax

Group Corp.) and our non-PRC subsidiaries have also received all requisite permissions and approvals in order to conduct and operate

our business.

order to promote domestic enterprises to carry out overseas capital market activities in accordance with law and compliance, the CSRC

issued the “Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies” and five supporting

guidelines (collectively referred to as the Overseas Listing Filing Rules) on February 17, 2023, and took effect on March 31, 2023.

Overseas Listing Filing Rules clarify the relevant rules of the Chinese government on the management of overseas issuance, including

but not limited to (i) Initial public offerings or listings in overseas markets shall be filed with the CSRC within 3 working days after

the relevant application is submitted overseas.

Subsequent securities offerings of an issuer in the same overseas market where it has

previously offered and listed securities shall be filed with the CSRC within 3 working days after the offering is completed.

securities offerings and listings of an issuer in other overseas markets than where it has offered and listed shall be filed as Initial

public offerings;

(ii) A negative list that prohibits overseas offering and listing;

(iii) The reporting obligations of the issuer after

filing, such as the change of control, voluntary or mandatory delisting and other major changes after overseas issuance or listing, the

issuer should bare the obligation to report to the CSRC;

(iv) Legal liability, such as failure to fulfill the filing procedures, or violation

of relevant regulations in overseas listing, the CSRC shall order rectification, issue warnings to such domestic company, and impose

a fine of between RMB 1,000,000 yuan and RMB 10,000,000 yuan.

Directly liable persons-in-charge and other directly liable persons shall

be warned and each imposed a fine of between RMB 500,000 yuan and RMB 5,000,000 yuan.

Specifically,

under the Overseas Listing Filing Rules, our Company, as an enterprise already listed on the Nasdaq Capital Market before March 31, 2023,

and is not required to make immediate filings for its listing.

However, if we issue subsequent offering on the Nasdaq Capital Market or

list in other overseas markets in the future, we shall file with the CSRC in accordance with the Overseas Listing Filing Rules;

In case of major changes, it is also necessary to report the specific situation to the CSRC.

Otherwise, the Company shall bear corresponding

legal responsibilities.

As the Overseas Listing Filing Rules are newly issued, there is still uncertainty about their interpretations

and implementations.

As a result, we cannot assure you that we will be able to complete any documents for our future issuance in a timely

manner and fully comply with the relevant new rules.

In addition, we cannot guarantee that we will not be subject to tightened regulatory

review and subsequent interference by the Chinese government.

of Cash to and from our Subsidiaries

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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.

However, to the extent cash in

the business is in the PRC/Hong Kong or is in our PRC or Hong Kong subsidiaries, there can be no assurance that the PRC government will

not intervene or impose restrictions or limitations on the ability of Addentax or Addentax’s subsidiaries to transfer cash.

a result, such funds may not be available to fund operations or for other use outside of the PRC or Hong Kong.

Addentax does not currently

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

We intend to retain most,

if not all, of available funds and any future earnings after this offering to the development and growth of our business in China.

of the date hereof, no transfers, dividends, or distributions have been made to our investors.

Further, our management is directly supervising

cash management.

Our finance department is responsible for establishing the cash management policies and procedures among our departments

and the operating entities.

Each department or operating entity initiates a cash request by putting forward a cash demand plan, which

explains the specific amount and timing of cash requested, and submitting it to designated management members of our Company, based on

the amount and the use of cash requested.

The designated management member examines and approves the allocation of cash based on the

sources of cash and the priorities of the needs, and submits it to the cashier specialists of our finance department for a second review.

Other than the above, we currently do not have other cash management policies or procedures that dictate how funds are transferred nor

a written policy that addresses how we will handle any limitations on cash transfers due to PRC law.

Foreign Company Accountable Act

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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.

auditor, Pan-China Singapore, the independent registered public accounting firm that issued the audit report included in this Annual

Report, is subject to PCAOB inspections.

Pan-China Singapore is headquartered in Singapore and there are no limitations in Singapore

on PCAOB inspections.

Therefore, we believe that, as of the date of this Annual Report, our auditor is not subject to the determinations

announced by the PCAOB on December 16, 2021 relating to the PCAOB’s inability to inspect or investigate completely registered public

accounting firms headquartered in the PRC or Hong Kong because of a position taken by one or more authorities in the PRC or Hong Kong.

However, to the extent that our auditor’s work papers may, in the future, become located in China, such work papers will not be

subject to inspection by the PCAOB because the PCAOB is currently unable to conduct inspections without the approval of the Chinese authorities.

Inspections of certain other firms that the PCAOB has conducted outside of China have identified deficiencies in those firms’ audit

procedures and quality control procedures, which may be addressed as part of the inspection process to improve future audit quality.

The inability of the PCAOB to conduct inspections of our auditors’ work papers in China would make it more difficult to evaluate

the effectiveness of our auditor’s audit procedures or quality control procedures as compared to auditors outside of China that

are subject to PCAOB inspections.

As a result, our investors may be deprived of the benefits of the PCAOB’s oversight of our auditor

through such inspections and they may lose confidence in our reported financial information and procedures and the quality of our financial

We cannot assure you whether Nasdaq or other regulatory authorities will apply additional or more stringent criteria to us.

Such uncertainty could cause the market price of our Ordinary Shares to be materially and adversely affected.

August 26, 2022, the PCAOB announced that it had signed the “Protocol” with the CSRC and the MOF, which governs inspections

and investigations of audit firms based in mainland China and Hong Kong.

The Protocol remains unpublished and is subject to further explanation

and implementation.

Pursuant to the fact sheet with respect to the Protocol released by the SEC, the PCAOB shall have independent discretion

to select any issuer audits for inspection or investigation and the unfettered ability to transfer information to the SEC.

to the PCAOB, its December 2021 determinations under the HFCAA remain in effect.

On December 15, 2022, the PCAOB secures complete access

to inspect, investigate audit firms based in mainland China and Hong Kong.

It is possible when the PCAOB may reassess its determinations

in the future, and it could determine that it is still unable to inspect or investigate completely registered public accounting firms

in mainland China and Hong Kong.

The Holding Foreign Companies Accountable Act and related regulations currently previously did not affect

the Company as the Company’s auditor is subject to PCAOB’s inspections and investigations.

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.

investigate our auditor at such a 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.

Senate passed AHFCAA and on December 29, 2022, the Consolidated Appropriations Act was signed into law by

President Biden, which contained, among other things, an identical provision to AHFCAA and amended the Holding Foreign Companies Accountable

Act by requiring 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, thus reducing the time before your securities may be prohibited from

trading or delisted.

The delisting or the cessation of trading of our Ordinary Shares, or the threat of their being delisted or prohibited

from being traded, may materially and adversely affect the value of your investment.

December 15, 2022, the PCAOB announced that it has completed a test inspection of two selected auditing firms in mainland China and Hong

Kong and has voted to vacate its previous Determination Report, which concluded in December 2021 that the PCAOB could not inspect or

investigate completely registered public accounting firms based in mainland China or Hong Kong.

On December 23, 2022 the AHFCAA was enacted,

which amended the HFCAA by requiring 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 and such act was signed into law on December 29,

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