What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-02-13 compared with 2025-11-14 · 219 added, 199 removed, 346 unchanged (55% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

following discussion and analysis of our financial condition and results of operations for the three and six months ended September 30,

following discussion and analysis of our financial condition and results of operations for the three and nine months ended December 31,

2025 and 2024 should be read in conjunction with the Financial Statements and corresponding notes included in this Report on Form 10-Q.

27 unchanged sentences

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;

ShenzhenYingxi 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) Shenzhen Yingxi Peng

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

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

(ix) Dongguan Aotesi Garments Co., Ltd.,, a PRC company (“AOT”), (x) Dongguan Hongxiang Commercial Co., Ltd., a PRC company

(ii) Yingxi Industrial Chain

Investment Co., Ltd., a Hong Kong company (“Yingxi HK”);

(iii) Yingxi Textile & Garments Co., Ltd., a PRC company;

(iv) ShenzhenYingxi 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) Shenzhen

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

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

company (“XKJ”), (ix) Dongguan Aotesi Garments Co., Ltd., a PRC company (“AOT”), and (x) Dongguan Hongxiang

Commercial Co., Ltd., a PRC company (“HX”).

July 2025, Shenzhen Yingxi Industrial Chain Services Co., Ltd, previously known as Shenzhen Qianhai Yingxi Industrial Chain Services

37 unchanged sentences

delivery and courier network in China.

As of September 30, 2024, we provide logistics services to over 44 cities in 10 provinces and

As of December 31, 2025, we provide logistics services to over 44 cities in 10 provinces and 2

municipalities.

22 unchanged sentences

management and subleasing business

property management and subleasing business, we generally collect rental and management fees of the following month each month in advance.

property management and subleasing business, we generally collect rental and management fees for the following month each month in advance.

business is dependent on consumer demand for our products and services.

117 unchanged sentences

a significant impact on the Company’s consolidated financial statements.

of Operations for the three months ended September 30, 2025 and 2024

following table summarizes our results of operations for the three months ended September 30, 2025 and 2024.

of Operations for the three months ended December 30, 2025 and 2024

following table summarizes our results of operations for the three months ended December 31, 2025 and 2024.

The table and the discussion

below should be read in conjunction with our consolidated financial statements and the notes thereto appearing elsewhere in this report.

Months Ended September 30,

Three Months Ended December 31,

Changes in 2025

compared to 2024

dollars, except for percentages)

from operations

value gain or loss

from continuing operations

(loss) from discontinued operations

revenue for the three months ended September 30, 2025 decreased by approximately $0.3 million, or 26.3%, as compared with the three months

ended September 30, 2024.

The decrease was mainly due to the decrease of $0.1 million in garment manufacturing business revenue and decrease

of $0.2 million in logistics services revenue.

Cost of revenues

Operating expenses

Loss from operations

Other income, net

Fair value gain or loss

Net finance cost

Income tax expense

Loss from continuing operations

Income (loss) from discontinued operations

$ (4,196,222 )

$ (1,085,721 )

$ (3,110,501 )

revenue for the three months ended December 31, 2025 increased by approximately $0.1 million, or 12.8%, as compared with the three months

ended December 31, 2024.

The increase was mainly due to the increase of $0.2 million in logistics services revenue.

generated from our garment manufacturing business contributed approximately $0.01 million, or 0.5%, of our total revenue for the three

months ended September 30, 2025.

By comparison, revenue generated from garment manufacturing business contributed approximately $0.1

million or 11.1% of our total revenue for the three months ended September 30, 2024.

The low level of sales was mainly due to a decrease

in order volume and fierce market competition.

months ended December 31, 2025.

By comparison, revenue generated from garment manufacturing business contributed approximately $0.1 million

or 1.6% of our total revenue for the three months ended December 31, 2024.

The low level of sales was mainly due to a decrease in order

volume and fierce market competition.

generated from our logistics services business contributed approximately $1.0 million, or 99.5%, of our total revenue for the three months

ended September 30, 2025.

ended December 31, 2025.

By comparison, revenue generated from our logistic business contributed approximately $0.8 million or 98.4%

of our total revenue for the three months ended September 30, 2024.

months ended September 30,

of our total revenue for the three months ended December 31, 2024.

months ended December 31,

(decrease) in

11 unchanged sentences

our garment manufacturing business, we purchase the majority of our raw materials directly from numerous local fabric and accessories

material costs for our garment manufacturing business were approximately 49.8% of our total garment manufacturing business revenue for

the three months ended September 30, 2025, as compared with 58.8% for the three months ended September 30, 2024.

The decrease in percentage

was mainly due to a reduction in the costs of the raw materials.

costs for our garment manufacturing business was nil for the three months ended September 30, 2025, as compared with 24.5% for the three

months ended September 30, 2024.

There was no production during the three months ended September 30, 2025 as we procured products from external manufacturers for resale instead of manufacturing.

and other expenses for our garment manufacturing business was nil for the three months ended September 30, 2025, as compared with 4.8%

of total garment business revenue for the three months ended September 30, 2024.

material costs for our garment manufacturing business were approximately 93.9% of our total garment manufacturing business revenue

for the three months ended December 31, 2025, as compared with 35.3% for the three months ended December 31, 2024.

The increase in

percentage was mainly because there was no production thus no labor cost in the quarter ended December 31, 2025 as we procured products from external

manufacturers for resale instead of manufacturing.

costs for our garment manufacturing business was nil for the three months ended December 31, 2025, as compared with 38.1% for the three

months ended December 31, 2024.

There was no production during the three months ended December 31, 2025 as we procured products from

external manufacturers for resale instead of manufacturing.

and other expenses for our garment manufacturing business was nil for the three months ended December 31, 2025, as compared with 10.0%

of total garment business revenue for the three months ended December 31, 2024.

There was no production during the three months ended

September 30, 2025.

December 31, 2025.

our logistic services business, we outsourced some of the business to our contractors.

We relied on a few contractors, and the contracting

fees to our largest contractor represented approximately 16.0% ($0.09 million) and nil% of total cost of revenues for our service segment

for the three months ended September 30, 2025 and 2024, respectively.

The increase was attributed to the use of contractors.

fees to our largest contractor represented approximately 12.8% ($0.09 million) and 18.2% of total cost of revenues for our service segment

for the three months ended December 31, 2025 and 2024, respectively.

The decrease was attributed to less use of contractors.

not experienced any disputes with our contractors and we believe we maintain good relationships with our contract logistics services

toll and other costs for our logistics services business for the three months ended September 30, 2025 were approximately $0.5 million

as compared with $0.5 million for the three months ended September 30, 2024.

toll and other costs for our logistics services business for the three months ended December 31, 2025 were approximately $0.6 million

as compared with $0.5 million for the three months ended December 31, 2024.

Fuel, toll and other costs for our logistics services business

accounted for approximately 62.4% of our total service revenue for the three months ended September 30, 2025, as compared with 53.0%

for the three months ended September 30, 2024.

The increase in percentage was primarily attributable to an increased use of contractors

during the quarter.

manufacturing business gross profit for the three months ended September 30, 2025 was $6,491, as compared with $17,679 for the three

months ended September 30, 2024.

Gross profit accounted for 50.2% of our total garment manufacturing business revenue for the three months

ended September 30, 2025, as compared to 47.0% for the three months ended September 30, 2024.

The increase of gross profit ratio was

mainly due to the procurement of products from external manufacturers for resale instead of manufacturing.

profit in our logistics services business for the three months ended September 30, 2025 was $218,656 and gross margin was 27.1%.

profit in our logistics services business for the three months ended September 30, 2024 was $453,406 and gross margin was 47.0%.

decrease of gross profit ratio was mainly due to a combination of cost and market factors:

significantly higher toll expenses;

competitive “low-margin, high-volume” pricing strategy adopted to maintain market share amid intense economic competition,

despite year-over-year revenue growth in the 2025 period.

months ended September 30,

accounted for approximately 58.1% of our total service revenue for the three months ended December 31, 2025, as compared with 63.6% for

the three months ended December 31, 2024.

The decrease in percentage was primarily attributable to decreased prices of fuel, toll and

other costs during the quarter.

manufacturing business gross profit for the three months ended December 31, 2025 was $290, as compared with $5,620 for the three months

ended December 31, 2024.

Gross profit accounted for 6.1% of our total garment manufacturing business revenue for the three months ended

December 31, 2025, as compared to 16.6% for the three months ended December 30, 2024.

The decrease in gross profit ratio was mainly due

to a decline in segment revenue, primarily driven by reduced sales on the Taobao platform, which resulted in less efficient absorption

of fixed and variable costs across operations.

profit in our logistics services business for the three months ended December 31, 2025 was $294,623 and gross margin was 30.3%.

profit in our logistics services business for the three months ended December 31, 2024 was $184,545 and gross margin was 22.2%.

in gross profit ratio was mainly due to optimized logistics routes and integrated transportation of goods.

months ended December 31,

(decrease) in

4 unchanged sentences

General and administrative expenses

selling expenses for our garment manufacturing business for the three months ended September 30, 2025 and 2024 were $4,643 and $13,400,

selling expenses for our garment manufacturing business for the three months ended December 31, 2025 and 2024 were $9,109 and $28,819,

respectively.

Selling expenses consisted primarily of advertisement, local transportation, unloading charges and product inspection charges.

general and administrative expenses in our garment manufacturing business segment for the three months ended September 30, 2025 and 2024

The decrease in selling expenses was primarily due to strategic adjustments within the garment manufacturing segment, which

led to a reduction in advertising and marketing-related expenditures.

Our logistics services segment had no selling expenses

for the three months ended December 31, 2005 and 2024.

Selling expenses consisted primarily of advertisement, local transportation, unloading

charges and product inspection charges.

general and administrative expenses in our garment manufacturing business segment for the three months ended December 31, 2025 and 2024

were $2,739 and $8,021, respectively.

Our general and administrative expenses in our logistics services segment for the three months

ended September 30, 2025 and 2024 were $155,397 and $223,375, respectively.

Our general and administrative expenses in our corporate

office for the three months ended September 30, 2025 and 2024 were $510,384 and $274,855, respectively.

ended December 31, 2025 and 2024 were $151,967 and $175,837, respectively.

Our general and administrative expenses of our corporate office

for the three months ended December 31, 2025 and 2024 were $199,891 and $127,522, respectively.

Total general and administrative expenses

for the three months ended December 31, 2025 increased by approximately 13.9% to $354,597 from $311,383 for the three months ended December

The increase was primarily attributable to higher general operating maintenance expenses.

General and administrative expenses

1 unchanged sentence

legal and professional fees, warehousing costs and other expenses that are not directly attributable to our revenues.

general and administrative expenses for the three months ended September 30, 2025 increased by approximately 34.3% to $670,352 from $499,193

for the three months ended September 30, 2024.

from operations

from operations for the three months ended September 30, 2025 and 2024 was $449,848 and $245,066, respectively.

Loss from operations

in our garment manufacturing segments was $2,723 and income from operation of $1,622 for the three months ended September 30, 2025

and 2024, respectively.

The increase in losses was mainly due to the decrease in revenue.

Income (loss) from operations in our

logistics services segment was $63,258 and $229,558 for the three months ended September 30, 2025 and 2024, respectively.

decrease in income was mainly due to decreased sales.

We incurred expenses from operations in corporate office of $510,383 and

$274,381 for the three months ended September 30, 2025 and 2024, respectively.

tax expense for the three months ended September 30, 2025 and 2024 was $70 and $1,062, respectively.

from operations for the three months ended December 31, 2025 and 2024 was $68,793 and $381,054, respectively.

Loss from operations in

our garment manufacturing segments was $10,859 and $31,220 for the three months ended December 31, 2025 and 2024, respectively.

The reduction in operating loss was primarily

attributable to strategic adjustments implemented in the garment manufacturing segment, which resulted in lower marketing and operating

expenses during the current period.

Income from operations in our logistics services segment was $141,921 and $8,707

for the three months ended December 31, 2025 and 2024, respectively.

The increase in income was mainly due to increased sales and gross

tax expense for the three months ended December 31, 2025 and 2024 was $248 and $3,116, respectively.

YX primarily operates in the PRC

and files tax returns in the PRC jurisdictions.

Industrial Chain Group Co., Ltd was incorporated in the Republic of Seychelles and, under the current laws of Seychelles, is not subject

and files tax returns in the PRC.

Industrial Chain Group Co., Ltd is incorporated in the Republic of Seychelles and, under the current laws of Seychelles, is not subject

to income taxes.

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

HK is incorporated in Hong Kong and is subject to Hong Kong income tax at a progressive tax 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 September 30, 2025 and 2024.

and YX were incorporated in the PRC and is subject to the PRC Enterprise Income Tax (EIT) rate of 25%.

in Hong Kong has been made as Yingxi HK had no taxable income for the three months ended December 31, 2025 and 2024.

and YX are incorporated in the PRC and are subject to PRC Enterprise Income Tax (EIT) rate of 25%.

No provision for income taxes

in the PRC has been made as QYTG and YX had no taxable income for the three months ended September 30, 2025 and 2024.

majority of our subsidiaries are governed by the Income Tax L aws of the PRC.

in the PRC has been made as QYTG and YX had no taxable income for the three months ended December 31, 2025 and 2024.

majority of our subsidiaries are governed by the Income Tax Laws of the PRC.

All YX’s operating companies are subject to progressive

EIT rates from 5% to 15% in 2025.

The preferential tax rates will expire at end of year 2025.

The preferential tax rates will expire at end of 2026.

entity and is subject to the United States federal income tax.

1 unchanged sentence

has been made as Addentax Group Corp.

had no United States taxable income for the three months ended September 30, 2025 and 2024.

incurred net loss of approximately $0.1 million and net loss of approximately $0.7million for the three months ended September 30, 2025

had no United States taxable income for the three months ended December 31, 2025 and 2024.

incurred net loss of approximately $4.2 million and net loss of approximately $1.1million for the three months ended December 31,

2025 and 2024, respectively.

Our basic and diluted loss per share were ($0.01) and ($0.13) for the three months ended September 30, 2025 and

The net loss for the three months ended December 31, 2005 was mainly due to $4.1 million loss from

fair value evaluation from derivative liabilities.

The net loss for the three months ended December 31, 2024 was mainly due to $0.2

million loss from operations, $0.7 million fair value loss, $0.1 million financial cost, and $0.2 million loss from discontinued

Our basic and diluted loss per share was $0.45 and $0.19 for the three months ended December 31, 2025 and

2024, respectively.

of Operations for the six months ended September 30, 2025 and 2024

following table summarizes our results of operations for the six months ended September 30, 2025 and 2024.

of Operations for the nine months ended December 31, 2025 and 2024

following table summarizes our results of operations for the nine months ended December 31, 2025 and 2024.

The table and the discussion

below should be read in conjunction with our consolidated financial statements and the notes thereto appearing elsewhere in this report.

Months Ended September 30,

Months Ended December 31,

dollars, except for percentages)

Cost of revenues

from operations

3 unchanged sentences

$ (4,691,497 )

revenue for the six months ended September 30, 2025 decreased by $38,962, or 2.3%, as compared with the six months ended September 30,

The decrease was mainly due to the increase of $0.16 million in logistics services revenue and a decrease of $0.20 million in garment

manufacturingrevenue.

generated from our garment manufacturing business contributed $32,831, or 2.0%, of our total revenue for the six months ended September

By comparison, revenue generated from garment manufacturing business contributed approximately $0.2 million or 10.7% of our

total revenue for the six months ended September 30, 2024.

The low level of sales was mainly due to a decrease in order volume and fierce

market competition.

generated from our logistics services business contributed approximately $1.6 million, or 98.0%, of our total revenue for the six months

ended September 30, 2025.

$ (3,028,364 )

$ (1,663,133 )

revenue for the nine months ended December 31, 2025 increased by $71,985, or 2.8%, as compared with the nine months ended December

The increase was mainly due to the increase of $0.30 million in logistics services revenue, offset by a decrease of $0.23

million in garment manufacturing revenue.

generated from our garment manufacturing business contributed $37,595, or 1.4%, of our total revenue for the nine months ended

December 31, 2025.

By comparison, revenue generated from garment manufacturing business contributed approximately $0.3 million or

8.3% of our total revenue for the nine months ended December 31, 2024.

The low level of sales was mainly due to a decrease in order

volume as a result of fierce market competition.

generated from our logistics services business contributed approximately $2.6 million, or 98.6%, of our total revenue for the nine months

ended December 31, 2025.

By comparison, revenue generated from our logistic business contributed approximately $2.3 million or 70.2%

of our total revenue for the six months ended September 30, 2024.

months ended September 30,

of our total revenue for the nine months ended December 31, 2024.

months ended December 31,

(decrease) in

12 unchanged sentences

material costs for our garment manufacturing business were approximately 47.6% of our total garment manufacturing business revenue for

the six months ended September 30, 2025, as compared with 53.2% for the six months ended September 30, 2024.

the nine months ended December 31, 2025, as compared with 50.9% for the nine months ended December 31, 2024.

The decrease in percentage

was mainly due to a reduction in the costs of the raw materials.

costs for our garment manufacturing business was approximately 24.8% of our total garment manufacturing business revenue for the six

months ended September 30, 2025, as compared with 23.2% for the six months ended September 30, 2024.

This decrease was driven by our shift to purchasing finished garments amid

lower order volumes in the nine months ended December 31, 2025.

At smaller scale, direct sourcing is more cost-efficient than in-house

manufacturing.

Additionally, our small-batch, diversified product mix resulted in lower average unit costs, which reduced the overall

costs for our garment manufacturing business were approximately 21.7% of our total garment manufacturing business revenue for the nine

months ended December 31, 2025, as compared with 25.1% for the nine months ended December 31, 2024.

We maintained a sustainable level

The increase in portion of labor cost against revenue was mainly due to the decrease in revenue.

The decrease in portion of labor cost against revenue was mainly due to the decrease in revenue.

and other expenses for our garment manufacturing business accounted for approximately 3.3% of our total garment business revenue for

the six months ended September 30, 2025, as compared with 4.5% of total garment business revenue for the six months ended September 30,

the nine months ended December 31, 2025, as compared with 5.2% of total garment business revenue for the nine months ended December 31,

our logistic services business, we outsourced some of the business to our contractors.

1 unchanged sentence

fees to our largest contractor represented approximately 9.6% ($0.2 million) and nil% of total cost of revenues for our service segment

for the six months ended September 30, 2025 and 2024, respectively.

for the nine months ended December 31, 2025 and 2024, respectively.

The increase was attributed to the use of contractors.

experienced any disputes with our contractors and we believe we maintain good relationships with our contract logistics services providers.

toll and other costs for our logistics services business for the six months ended September 30, 2025 were approximately $1.1 million

as compared with $0.8 million for the six months ended September 30, 2024.

Fuel, toll and other costs for our logistics services business

accounted for approximately 66.6% of our total service revenue for the six months ended September 30, 2025, as compared with 52.4% for

the six months ended September 30, 2024.

The increase was primarily attributable to an increased use of contractors during the quarter

ended September 30, 2025.

manufacturing business gross profit for the six months ended September 30, 2025 was $10,014, as compared with $44,942 for the six months

ended September 30, 2024.

Gross profit accounted for 30.5% of our total garment manufacturing business revenue for the six months ended

September 30, 2025, as compared to 19.1% for the six months ended September 30, 2024.

The increase of gross profit ratio was mainly due

to the procurement of products from external manufacturers for resale

instead of manufacturing.

profit in our logistics services business for the six months ended September 30, 2025 was $405,547 and gross margin was 25.1%.

profit in our logistics services business for the six months ended September 30, 2024 was $690,617 and gross margin was 47.6%.

The decrease of gross profit ratio was mainly due to a combination of cost and market factors:

toll and other costs for our logistics services business for the nine months ended December 31, 2025 were approximately $1.6 million

as compared with $1.3 million for the nine months ended December 31, 2024.

Fuel, toll and other costs for our logistics services

business accounted for approximately 63.4% of our total service revenue for the nine months ended December 31, 2025, as compared

with 56.5% for the nine months ended December 31, 2024.

The increase was primarily attributable to increased revenue during the

nine months ended December 31, 2025.

manufacturing business gross profit for the nine months ended December 31, 2025 was $10,304, as compared with $50,562 for the nine

months ended December 31, 2024.

Gross profit accounted for 27.4% of our total garment manufacturing business revenue for the nine

months ended December 31, 2025, as compared to 18.8% for the nine months ended December 31, 2024.

The increase in gross profit ratio

was mainly due to the procurement of products from external manufacturers for resale instead of manufacturing for the nine months ended December 31, 2025.

profit in our logistics services business for the nine months ended December 31, 2025 was $700,710 and gross margin was 27.1%.

profit in our logistics services business for the nine months ended December 31, 2024 was $875,162 and gross margin was 38.4%.

in gross profit ratio was mainly due to a combination of cost and market factors:

significantly higher toll expenses;

a competitive “low-margin, high-volume” pricing strategy adopted to maintain market share amid intense economic competition,

despite year-over-year revenue growth in the 2025 period.

months ended September 30,

and a competitive

“low-margin, high-volume” pricing strategy adopted to maintain market share amid intense economic competition, despite year-over-year

revenue growth in the 2025 period.

months ended December 31,

(decrease) in

6 unchanged sentences

General and administrative expenses

selling expenses for our garment manufacturing business for the six months ended September 30, 2025 and 2024 were $11,304

and $96,002, respectively.

Selling expenses consisted primarily of advertisement, local transportation, unloading charges and product

inspection charges.

general and administrative expenses in our garment manufacturing business segment for the six months ended September 30, 2025 and 2024

selling expenses for our garment manufacturing business for the nine months ended December 31, 2025 and 2024 were $19,714 and $124,821,

respectively.

Selling expenses consisted primarily of advertisement, local transportation, unloading charges and product inspection charges.

general and administrative expenses in our garment manufacturing business segment for the nine months ended December 31, 2025 and 2024

were $33,758 and $18,984, respectively.

Our general and administrative expenses in our logistics services segment for the

six months ended September 30, 2025 and 2024 were $355,769 and $439,625, respectively.

Our general and administrative expenses in our

corporate office for the six months ended September 30, 2025 and 2024 were $822,192 and $532,753, respectively.

General and administrative

expenses consisted primarily of administrative salaries, office expense, certain depreciation and amortization charges, repairs and maintenance,

Our general and administrative expenses in our logistics services segment for the nine months

ended December 31, 2025 and 2024 were $507,736 and $615,462, respectively.

Our general and administrative expenses for our corporate office

for the nine months ended December 31, 2025 and 2024 were $1,022,083 and $657,032, respectively.

General and administrative expenses

consisted primarily of administrative salaries, office expense, certain depreciation and amortization charges, repairs and maintenance,

legal and professional fees, warehousing costs and other expenses that are not directly attributable to our revenues.

general and administrative expenses for the six months ended September 30, 2025 increased by approximately 23.4% to $1.2 million from

$1.0 million for the six months ended September 30, 2024.

general and administrative expenses for the nine months ended December 31, 2025 increased by approximately 21.1% to $1.6 million

from $1.3 million for the nine months ended December 31, 2024.

from operations

from operations for the six months ended September 30, 2025 and 2024 was $804,723 and $750,082, respectively.

Loss from operations in

our garment manufacturing segments was $32,310 and $62,023 for the six months ended September 30, 2025 and 2024, respectively.

in losses was mainly due to implementing operational cost-saving measures.

Income (loss) from operations in our logistics services segment

was $49,777 and $250,437 for the six months ended September 30, 2025 and 2024, respectively.

The decrease in income was mainly due to

decreased sales.

We incurred expenses from operations in corporate office of $822,190and $532,198 for the six months ended September

30, 2025 and 2024, respectively.

Addentax incorporated in the US is dormant ( No

income, no expenses except for listing/ administrative expenses).

Addentax has no current US tax.

All the taxable income are generated

by the foreign subsidiaries and the income tax computation is disclosed in Note 12

Income tax expense for the six months ended September 30, 2025 and

2024 was $834 and $1,527, respectively.

YX primarily operates in the PRC and files tax returns in the PRC jurisdictions.

Industrial Chain Group Co., Ltd was incorporated in the Republic of Seychelles and, under the current laws of Seychelles, is not subject

from operations for the nine months ended December 31, 2025 and 2024 was $873,516 and $490,574, respectively.

Loss from operations

in our garment manufacturing segments was $43,169 and $93,243 for the nine months ended December 31, 2025 and 2024, respectively.

The reduction in operating loss was primarily attributable to strategic adjustments implemented in the garment manufacturing

segment, which resulted in lower marketing and operating expenses during the current period.

Income (loss) from operations in our

logistics services segment was $191,698 and $259,144 for the nine months ended December 31, 2025 and 2024, respectively.

decrease in income was mainly due to increase in cost of fuel, toll and other costs.

tax expense for the nine months ended December 30, 2025 and 2024 was $1,082 and $4,643, respectively.

YX primarily operates in the PRC

and files tax returns in the PRC.

Industrial Chain Group Co., Ltd is incorporated in the Republic of Seychelles and, under the current laws of Seychelles, is not subject

to income taxes.

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

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

No provision for income taxes

in Hong Kong has been made as Yingxi HK had no taxable income for the six months ended September 30, 2025 and 2024.

and YX were incorporated in the PRC and is subject to the PRC Enterprise Income Tax (EIT) rate of 25%.

in Hong Kong has been made as Yingxi HK had no taxable income for the nine months ended December 31, 2025 and 2024.

and YX are incorporated in the PRC and are subject to PRC Enterprise Income Tax (EIT) rate of 25%.

No provision for income taxes

in the PRC has been made as QYTG and YX had no taxable income for the six months ended September 30, 2025 and 2024.

in the PRC has been made as QYTG and YX had no taxable income for the nine months ended December 31, 2025 and 2024.

majority of our subsidiaries are governed by the Income Tax Laws of the PRC.

5 unchanged sentences

has been made as Addentax Group Corp.

had no United States taxable income for the six months ended September 30, 2025 and 2024.

incurred net loss of approximately $0.5 million and $1.9 million for the six months ended September 30, 2025 and 2024, respectively.

Our basic and diluted loss per share were ($0.06) and ($0.36) for the six months ended September 30, 2025 and 2024, respectively.

had no United States taxable income for the nine months ended December 31, 2025 and 2024.

incurred net loss of approximately $4.7 million and net loss of $3.0 million for the nine months ended December 31, 2025 and 2024,

respectively.

Our basic and diluted loss per share were $0.50 and $0.53 for the nine months ended December 31, 2025 and 2024, respectively.

of cash flows

cash flows information for the six months ended September 30, 2025 and 2024 is as follow:

months ended September 30,

cash flows information for the nine months ended December 31, 2025 and 2024 is as follow:

months ended December 31,

cash (used in) provided by operating activities

$ (1,082,373 )

cash used in investing activities

cash provided by (used in) financing activities

cash used in operating activities in the six months ended September 30, 2025 was approximately $0.9 million as compared to cash of $0.5

million provided by operating activities in the six months ended September 30, 2024, which was approximately $1.5 million less than that

of the six months ended September 30, 2024.

The decrease was mainly due to (i) net income adjusted to operating cash flow for the six

months ended September 30, 2025 was $0.4 million more than that of the six months ended September 30, 2024;

(ii) the movement of operating

assets and liabilities in the six months ended September 30, 2025 resulted in cash outflow of approximately $1.2 million, which was $1.1

million more than that of the corresponding period in 2024;.

cash used in investing activities for the six months ended September 30, 2025 was approximately $0.27 million, which was $0.15 million

more than the six months ended September 30, 2024.

cash used in operating activities in the nine months ended December 31, 2025 was approximately $1.1 million as compared to cash of

$0.8 million provided by operating activities in the nine months ended December 31, 2024, which was approximately $1.9 million less

than that of the nine months ended December 31, 2024.

The difference in cash flow between the two periods was mainly because of the

movement of operating assets and liabilities in the nine months ended December 31, 2025, resulted in cash outflow of approximately

$1.3 million, while the movement of operating assets and liabilities in the nine months ended December 31, 2024 resulted in cash inflow of approximately

$0.6 million.

cash used in investing activities for the nine months ended December 31, 2025 was approximately $0.28 million, which was $0.13 million

more than the nine months ended December 31, 2024.

The cash outflow was mainly due to purchase of property, plant and equipment of $0.15

million and cash decrease of $0.15 million in disposal of subsidiaries.

cash provided by financing activities for the six months ended September 30, 2025 was approximately $1.4 million as compared to cash

used in financing activities of $0.4 million in the six months ended September 30, 2024, which was approximately $1.8 million less than

the six months ended September 30, 2025.

The increase was mainly because in the six months ended September 30, 2025, the Company had

release of restricted cash of $2.7 million, paid net cash advance of $1.0 million to related parties, and payment of $0.39 million for

redemption of convertible notes.

While in the six months ended September 30, 2024, the Company released restricted cash of $1.3 million,

paid $0.9 million net cash advance to related parties, and received net proceeds from bank loans of $0.1 million.

cash provided by financing activities for the nine months ended December 31, 2025 was approximately $1.3 million as compared to cash

used in financing activities of $1.0 million in the nine months ended December 31, 2024, which was approximately $0.34 million less

than the nine months ended December 31, 2025.

The difference in cash flow between the two periods was mainly because in the nine

months ended December 31, 2025, the Company released of $2.7 million of restricted cash from the issuance and conversion of certain convertible notes, paid net cash advance

of $2.6 million to related parties, and paid $0.39 million for the redemption of convertible notes not converted.

By comparison, in

the nine months ended December 31, 2024, the Company did not have released restricted cash, paid $1.1 million net cash advance to

related parties, and received net proceeds from bank loans of $0.2 million.

Condition, Liquidity and Capital Resources

of September 30, 2025, we had cash on hand of approximately $0.4 million, total current assets of approximately $27.8 million and current

of December 31, 2025, we had cash on hand of approximately $0.2 million, total current assets of approximately $27.9 million and current

liabilities of approximately $1.3 million.

We currently finance our operations from revenue, fund raising from our initial public offering

and private placement proceeds and capital contributions from our chief executive officer, Mr.

We expect to fund our operations through revenue generated by our business, proceeds from prior fundraising activities,

and capital contributions from our chief executive officer, Mr.

the event that the Company requires additional funding to finance the growth of the Company’s current and expected future operations

7 unchanged sentences

years, RMB continued to appreciate against the U.S.

As of September 30, 2025, the market foreign exchange rate was RMB 7.12 to

As of December 31, 2025, the market foreign exchange rate was RMB 7.02 to

Our financial statements are translated into U.S.

7 unchanged sentences

All translation adjustments are included in accumulated other comprehensive income in the statement of

The foreign currency translation gain (loss) for the six months ended September 30, 2025 and 2024 was approximately $(0.08) million

The foreign currency translation gain (loss) for the nine months ended December 31, 2025 and 2024 was approximately $(0.12) million

and $0.06 million, respectively.

Sheet Arrangements

have no off-balance sheet arrangements (as that term is defined in Item 303(a)(4)(ii) of Regulation S-K) as of September 30, 2025 that

have no off-balance sheet arrangements (as that term is defined in Item 303(a)(4)(ii) of Regulation S-K) as of December 31, 2025 that

have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues

3 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 2. Management’s Discussion and Analysis