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Item 8. Financial Statements and Supplementary Data

2024-07-15 compared with 2023-06-29 · 823 added, 731 removed, 335 unchanged (82% of the section changed)

Financial Statements and Supplementary

ADDENTAX GROUP CORP.

FINANCIAL STATEMENTS

Index to Consolidated Financial Statements

Financial Statements and Supplementary Data

to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID:

4 unchanged sentences

Notes to Consolidated Financial Statements for the years ended March 31, 2024 and 2023

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

1 unchanged sentence

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

(the “Company”) as of March 31, 2024

and 2023, and the related consolidated statement of operations and comprehensive income (loss), changes in equity, and cash flow for

the year ended March 31, 2024 and 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, 2024 and 2023, and the result of its operations and its cash flow for year then ended March 31, 2024 and

2023, in conformity with accounting principles generally accepted in the United States.

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

20 unchanged sentences

provide a reasonable basis for our opinion.

critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated

or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial

statements and (2) involved our especially challenging, subjective, or complex judgements.

The communication of the critical audit matter

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

Company conducted transactions with its related parties and affiliates during the normal course of its business in 2024.

7 unchanged sentences

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

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

related parties

confirmations for account balances with related parties

2 unchanged sentences

expenses transactions between the Company and its related parties

/s/ Pan-China Singapore PAC ( 6255 )

June 29, 2023

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

on the Financial Statements

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

(the “Company”) as of March 31, 2022 and

2021, and the related consolidated statements of operations and comprehensive income (loss), changes in equity, and cash flows for each

of the two years in the period ended March 31, 2022, 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 positions of the Company as of March

31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended March 31, 2022,

in conformity with accounting principles generally accepted in the United States.

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 has significant transactions with related parties, which are described in Note 5 to the financial statements.

Transactions involving

related parties cannot be presumed to be carried out on an arm’s length basis, as the requisite conditions of competitive, free

market dealings may not exist.

B F Borgers CPA PC

We have served as the Company’s

auditor since 2020.

Lakewood, Colorado

June 29, 2023

ADDENTAX GROUP CORP.

Accessed the related parties’ personal net worth

Pan-China Singapore PAC (6255)

July 15, 2024

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

Dollars, except share data or otherwise

BALANCE SHEETS

Dollars, except share data or otherwise stated)

March 31, 2024

2 unchanged sentences

Cash and cash equivalents

Restricted cash

Accounts receivables

36 unchanged sentences

TOTAL LIABILITIES AND EQUITY

See accompanying notes to the consolidated financial

ADDENTAX GROUP CORP.

accompanying notes to the consolidated financial statements.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE

Dollars, except share data or otherwise

FOR THE YEARS ENDED MARCH 31, 2023 AND 2022

STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

Dollars, except share data or otherwise stated)

THE YEARS ENDED MARCH 31, 2024 AND 2023

COST OF REVENUES

1 unchanged sentence

( 6,103,110 )

$ 2,063,254 )

OPERATING EXPENSES

7 unchanged sentences

LOSS FROM OPERATIONS

( 1,131,196 )

Change in fair value of warrants and embedded conversion feature

2 unchanged sentences

( 3,652,803 )

( 1,507,842 )

Other income (expenses), net

INCOME BEFORE INCOME TAX EXPENSE

$ ( 3,097,813 )

Income tax expense

( 3,109,418 )

Foreign currency translation gain / (loss)

TOTAL COMPREHENSIVE INCOME

$ ( 3,026,928 )

EARNING PER SHARE

1 unchanged sentence

Weighted average number of shares outstanding – Diluted

See accompanying notes to the consolidated financial

ADDENTAX GROUP CORP.

accompanying notes to the consolidated financial statements.

AND SUBSIDIARIES

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)

STATEMENTS OF CHANGES IN EQUITY

Dollars, except share data or otherwise stated)

THE YEARS ENDED MARCH 31, 2024 AND 2023

Retained earnings

Accumulated other

paid-in capital

Statutory reserve

1 unchanged sentence

Equity (Deficit)

BALANCE AT MARCH 31, 2021

$ ( 6,834,228 )

$ ( 103,117 )

BALANCE AT APRIL 1, 2022

$ ( 6,756,230 )

$ ( 170,984 )

Issuance of common stocks

Appropriation of Statutory reserve

Foreign currency translation

3 unchanged sentences

$ ( 5,451,209 )

$ ( 6,756,230 )

Issuance of common stocks before reversed split

Reverse stock split

( 33,655,878 )

Issuance of common stocks

New shares for round up of fragmental shares

Issuance of new shares after reversed split

Additional paid-in capital from conversion of convertible debts

Appropriation of Statutory reserve

1 unchanged sentence

Net income for the year

( 3,109,418 )

BALANCE AT MARCH 31, 2024

1 unchanged sentence

$ ( 8,569,190 )

See accompanying notes to the consolidated financial

ADDENTAX GROUP CORP.

accompanying notes to the consolidated financial statements.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Dollars, except share data or otherwise

FOR THE YEARS ENDED MARCH 31, 2023 AND 2022

STATEMENTS OF CASH FLOWS

Dollars, except share data or otherwise stated)

THE YEARS ENDED MARCH 31, 2024 AND 2023

CASH FLOWS FROM OPERATING ACTIVITIES:

Net (loss) income

$ ( 3,109,418 )

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

4 unchanged sentences

( 1,986,886 )

( 2,983,539 )

Loss on debts extinguishment

Gain on bargain purchase

Changes in operating assets and liabilities:

5 unchanged sentences

( 1,262,127 )

( 1,786,890 )

Accrued expenses and other payables

Advances from customers

Net cash (used in) provided by operating activities

Net cash used in operating activities

$ ( 411,473 )

$ ( 1,569,159 )

CASH FLOWS FROM INVESTING ACTIVITIES:

4 unchanged sentences

( 2,500,000 )

Cash acquired from subsidiary

Cash decreased in disposal of subsidiaries

( 1,168,153 )

Net cash used in investing activities

$ ( 21,168,153 )

Net cash provided by (used in) investing activities

$ ( 21,168,153 )

4 unchanged sentences

( 4,461,510 )

Cash advance to related parties

Proceeds from bank borrowings

Repayment of bank borrowings

2 unchanged sentences

( 14,750,000 )

Payment of issuance cost of convertible notes

Proceeds from issuance of common stocks

Net cash provided by (used in) financing activities

$ ( 1,372,803 )

NET INCREASE IN CASH AND CASH EQUIVALENTS

Net cash provided by financing activities

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

Effect of exchange rate changes on cash and cash equivalents

7 unchanged sentences

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

See accompanying notes to the consolidated financial

ADDENTAX GROUP CORP.

( 3,025,985 )

accompanying notes to the consolidated financial statements.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2023 AND 2022

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE YEARS ENDED MARCH 31, 2024 AND 2023

ORGANIZATION AND BUSINESS ACQUISITIONS

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”).

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, 2024, the Company’s principal subsidiaries consisted of the following entities:

OF PRINCIPAL SUBSIDIARIES ENTITIES

of incorporation

holding company

Name of entity

Place of incorporation

Principal activities

Immediate holding company

% of effective ownership interest held by the Group in 2024

% of effective ownership interest held by the Group in 2023

Industrial Chain Group Co., Ltd.

Yingxi Industrial Chain Group Co., Ltd.

(“Yingxi Seychelles”)

of Seychelles

Industrial Chain Investment Co., Ltd.

Republic of Seychelles

Investment holding

Addentax Group Corp.

Yingxi Industrial Chain Investment Co., Ltd.

(“Yingxi HK”)

Industrial Chain Group Co., Ltd.

Yingxi Textile & Garments Co., Ltd.

Industrial Chain Investment Co., Ltd.