What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2023-06-29 compared with 2022-06-23 · 819 added, 541 removed, 247 unchanged (85% of the section changed)

Financial Statements and Supplementary Data

to Consolidated Financial Statements

of Independent Registered Public Accounting Firm (PCAOB ID:

Financial Statements and Supplementary

ADDENTAX GROUP CORP.

FINANCIAL STATEMENTS

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance sheets as of March 31, 2023 and 2022

3 unchanged sentences

Notes to Consolidated Financial Statements for the years ended March 31, 2023 and 2022

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

the Board of Directors and Stockholders of Addentax Group Corp.:

on the Financial Statements

have audited the accompanying consolidated balance sheet of Addentax Group Corp.

(the “Company”) as of March 31, 2023, and

the related consolidated statement of operations and comprehensive income (loss), changes in equity, and cash flow for the year ended

March 31, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial

statements present fairly, in all material respects, the financial position of the Company as of March 31, 2023, and the result of its

operations and its cash flow for year then ended March 31, 2023, in conformity with accounting principles generally accepted in the United

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits

we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

Company conducted transactions with its related parties and affiliates during the normal course of its business in 2023.

has entered into a number of transactions with these related parties, including accrued of director remuneration which represented as

costs and expenses to the Company.

We identified the evaluation of the identification of related parties and related party transactions

as a critical audit matter.

Auditor judgment was involved in assessing the sufficiency of the procedures performed to identify related

parties and related party transactions of the Company.

the Critical Audit Matter Was Addressed in the Audit

performed the following procedures to evaluate the identification of related parties and related party transactions by the Company:

background checks, and reviewed other public research sources for information related to transactions between the Company and its related

confirmations for account balances with related parties

transaction details in the accounts payable system for transactions with related parties

the Company’s reconciliation of its related parties’ transactions and balances

expenses transactions between the Company and its related parties

/s/ Pan-China Singapore PAC ( 6255 )

June 29, 2023

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

35 unchanged sentences

B F Borgers CPA PC

have served as the Company’s auditor since 2020.

We have served as the Company’s

auditor since 2020.

Lakewood, Colorado

June 29, 2023

ADDENTAX GROUP CORP.

AND SUBSIDIARIES

BALANCE SHEETS

Dollars, except share data or otherwise stated)

CONSOLIDATED BALANCE SHEETS

Dollars, except share data or otherwise

March 31, 2023

3 unchanged sentences

Accounts receivables

Debt securities held-to-maturity

Other receivables

1 unchanged sentence

Amount due from related party

Other receivables

Total current assets

3 unchanged sentences

Long-term prepayment

Restricted Cash

Long-term receivables

Total non-current assets

9 unchanged sentences

NON-CURRENT LIABILITIES

Convertible debts

Derivative liabilities

Lease liability, net of current portion

Total non-current liabilities

TOTAL LIABILITIES

Common stock ($ 0.001 par value, 50,000,000 shares authorized, 26,693,004 shares issued and outstanding as of March 31, 2022 and 2021)

Common stock ($ 0.001 par value, 250,000,000 shares authorized, 35,454,670 and 26,693,004 shares issued and outstanding as of March 31, 2023 and 2022, respectively)

Additional paid-in capital

Statutory reserve

Accumulated deficits

1 unchanged sentence

( 6,756,230 )

Statutory reserve

Accumulated other comprehensive income (loss)

Total deficit

Total equity (deficit)

TOTAL LIABILITIES AND EQUITY

accompany notes to the consolidated financial statements.

See accompanying notes to the consolidated financial

ADDENTAX GROUP CORP.

AND SUBSIDIARIES

STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

Dollars, except share data or otherwise stated)

THE YEARS ENDED MARCH 31, 2022 AND 2021

CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE

Dollars, except share data or otherwise

FOR THE YEARS ENDED MARCH 31, 2023 AND 2022

COST OF REVENUES

1 unchanged sentence

( 10,627,379 )

GROSS PROFIT/(LOSS)

$ 2,063,254 )

8 unchanged sentences

LOSS FROM OPERATIONS

( 3,608,174 )

Change in fair value of warrants and embedded conversion feature

Interest income

Interest expenses

Other income/(expenses)

INCOME/(LOSS) BEFORE INCOME TAX EXPENSE

( 1,507,842 )

Other income (expenses), net

INCOME BEFORE INCOME TAX EXPENSE

Income tax expense

NET INCOME/(LOSS)

( 3,590,169 )

Foreign currency translation loss

TOTAL COMPREHENSIVE INCOME/(LOSS)

$ ( 3,749,774 )

EARNING/(LOSS) PER SHARE

Basic and diluted

Weighted average number of shares outstanding – Basic and diluted

accompany notes to the consolidated financial statements.

Foreign currency translation gain / (loss)

TOTAL COMPREHENSIVE INCOME

EARNING PER SHARE

Weighted average number of shares outstanding – Basic

Weighted average number of shares outstanding – Diluted

See accompanying notes to the consolidated financial

ADDENTAX GROUP CORP.

AND SUBSIDIARIES

STATEMENTS OF CHANGES IN EQUITY

Dollars, except share data or otherwise stated)

THE YEARS ENDED MARCH 31, 2022 AND 2021

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Dollars, except share data or otherwise

FOR THE YEARS ENDED MARCH 31, 2023 AND 2022

paid-in capital

Statutory reserve

comprehensive loss

Equity (Deficit)

Retained earnings

Accumulated other

paid-in capital

Statutory reserve

4 unchanged sentences

$ ( 103,117 )

Issuance of common stocks for cash

Appropriation of Statutory reserve and release of Statutory Reserve with disposition of subsidiaries

Foreign currency translation

Net loss for the year

$ ( 6,834,228 )

$ ( 103,117 )

Foreign currency translation

Net income for the year

BALANCE AT MARCH 31, 2022

1 unchanged sentence

$ ( 170,984 )

$ ( 6,756,230 )

$ ( 170,984 )

Issuance of common stocks

Appropriation of Statutory reserve

Foreign currency translation

Net loss for the year

Net income for the year

BALANCE AT MARCH 31, 2023

1 unchanged sentence

$ ( 5,451,209 )

accompany notes to the consolidated financial statements.

See accompanying notes to the consolidated financial

ADDENTAX GROUP CORP.

AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS

Dollars, except share data or otherwise stated)

THE YEARS ENDED MARCH 31, 2022 AND 2021

CONSOLIDATED STATEMENTS OF CASH FLOWS

Dollars, except share data or otherwise

FOR THE YEARS ENDED MARCH 31, 2023 AND 2022

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

$ ( 3,590,169 )

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

Depreciation and amortization

Loss on disposal of plant and equipment

Amortization of debt discount

Investment income

Fair value gain or loss

( 2,983,539 )

Changes in operating assets and liabilities:

2 unchanged sentences

Other receivables

( 1,321,003 )

Accounts payables

( 1,262,127 )

( 1,786,890 )

Accrued expenses and other payables

Advances from customers

Net cash provided by (used in) operating activities

Net cash (used in) provided by operating activities

$ ( 1,569,159 )

1 unchanged sentence

Purchase of plant and equipment

Proceeds from sale of property and equipment

Proceeds from disposal of subsidiaries

Purchase of debt securities

( 17,500,000 )

Long-term receivables

( 2,500,000 )

Cash decreased in disposal of subsidiaries

( 1,168,153 )

Net cash used in investing activities

6 unchanged sentences

( 5,878,286 )

Proceeds from bank borrowings

Repayment of bank borrowings

Proceeds from issue of common stocks

Net cash used in financing activities

Proceeds from issuance of convertible debt and warrants

Restricted cash

( 14,750,000 )

Proceeds from issuance of common stocks

Net cash provided by (used in) financing activities

$ ( 1,372,803 )

NET INCREASE IN CASH AND CASH EQUIVALENTS

7 unchanged sentences

Right-of-use assets obtained in exchange for operating lease obligations

accompany notes to the consolidated financial statements.

Transfer of Right-of-use assets due to disposal of subsidiary

See accompanying notes to the consolidated financial

ADDENTAX GROUP CORP.

AND SUBSIDIARIES

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE YEARS ENDED MARCH 31, 2022 AND 2021

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2023 AND 2022

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.

ATXG 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”).

of March 31, 2023, the Company’s principal subsidiaries consisted of the following entities:

OF PRINCIPAL SUBSIDIARIES ENTITIES

of incorporation

holding company

of effective ownership interest held by the Group in 2023

of effective ownership interest held by the Group in 2022

Industrial Chain Group Co., Ltd.

(“Yingxi Seychelles”)

of Seychelles

Industrial Chain Investment Co., Ltd.

(“Yingxi HK”)

Industrial Chain Group Co., Ltd.

Yingxi Textile & Garments Co., Ltd.

Industrial Chain Investment Co., Ltd.