What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-06-29 compared with 2025-06-30 · 795 added, 383 removed, 723 unchanged (62% of the section changed)

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TO CONSOLIDATED FINANCIAL STATEMENTS

to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID:

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on the Financial Statements

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

(the “Company”) as of March 31, 2025, and

2024, and the related consolidated statement of operations and comprehensive income (loss), changes in equity, and cash flow for the

year ended March 31, 2025, and 2024, and the related notes (collectively referred to as the “financial statements”).

opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2025,

and 2024, and the result of its operations and its cash flow for year then ended March 31, 2025, and 2024, in conformity with accounting

principles generally accepted in the United States.

Paragraph – Going Concern

accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

fully described in Note 2(b) to the consolidated financial statements, the Company has incurred operating losses for the past two financial

years, which raises concerns about the Company’s ability to continue as a going concern.

These conditions indicate that a material

uncertainty exists that raise substantial doubt on the Company’s ability to continue as a going concern.

audited the accompanying consolidated balance sheet of Addentax Group Corp.

and its subsidiaries (collectively referred to as the “ Company ” )

as of March 31, 2026, and the related consolidated statement of loss and comprehensive income (loss), changes in equity, and cash

flow for the year ended March 31, 2026, and the related notes (collectively referred to as the “ financial

statements ” ).

our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March

31, 2026, and the result of its operations and its cash flow for year then ended March 31, 2026, in conformity with accounting

principles generally accepted in the United States of America (“U.S.

Substantial Doubt About the Company’s Ability to Continue as a Going Concern

accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

fully described in Note 2(b) to the financial statements, the Company has incurred a net loss of approximately $4.47 million during the period, which raises substantial doubt about the Company’s ability to continue as a going concern.

Management’s plans

in regard to these matters are also described in Note2(b) in the consolidated financial statements.

The consolidated financial statements

regarding these matters are also described in Note 2(b) in the financial statements.

The financial statements

do not include any adjustments that might result from the outcome of this uncertainty.

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

Acquisition of Keemo Fashion Group Limited – Recognition and Impairment Assessment of Goodwill

of the Matter

described in Note 2(b) to consolidated financial statements, the Company has a history of operating losses.

These conditions raise substantial

doubt about the Company’s ability to continue as a going concern.

Historically, the Company has relied principally on both operational

sources of cash and non-operational sources of equity and debt financing to fund its operations and business development.

The Company’s

ability to continue as a going concern depends on management’s ability to successfully execute its business plan which includes

increasing the utilization rate of existing staff and potential financing from public market or private placement.

However, there is

no assurance that the measures above can be achieved as planned.

significant unusual situation is a critical audit matter as it relates to a material disclosure of going concern and involved complex

estimation by management.

described in Note 5 to the consolidated financial statements, the Company completed the acquisition of a controlling interest in Keemo

Fashion Group Limited (“KMFG”) on March 30, 2026 and recognized goodwill of approximately $5.68 million.

The acquisition was

accounted for under ASC 805, Business Combinations.

the acquisition accounting involved especially challenging and subjective auditor judgment due to the complexity of applying ASC 805,

including evaluating the assets acquired, liabilities assumed, purchase consideration transferred, noncontrolling interest and the resulting

goodwill recognized.

The determination of the preliminary acquisition accounting required management to evaluate the net assets acquired

and the allocation of the purchase consideration.

In addition, evaluating management’s goodwill impairment assessment required significant auditor judgment due

to the estimation uncertainty in determining the recoverable amount of the reporting unit.

we Addressed the Matter in Our Audit

principal audit procedures included, among others:

Obtaining an understanding,

and evaluating management’s assessment on whether there are conditions or events that raise substantial doubt about the entity’s

ability to continue as a going concern for a reasonable period of time;

Assessing the management’s

plans and obtaining sufficient appropriate audit evidence to determine whether or not substantial doubt can be alleviated or still

Reviewing the relevant

disclosures to the consolidated financial statements.

Pan-China Singapore PAC ( 6255 )

Chartered Accountants

June 30, 2025

Evaluating the acquisition agreement and other relevant supporting documentation to assess the acquisition date and the accounting treatment under ASC 805;

Assessing management’s determination that the transaction should be accounted for as a business combination under ASC 805;

Testing the completeness and accuracy of the identifiable assets acquired, liabilities assumed and purchase consideration transferred, and evaluating management’s preliminary purchase price allocation and the resulting goodwill recognized;

Assessing the reasonableness of the significant assumptions used by management in determining the recoverable amount of the reporting unit and testing the mathematical accuracy of the valuation model supporting management’s goodwill impairment assessment;

Tested the acquisition-date consolidation entries, including the recognition of non-controlling interest and elimination adjustments;

Evaluating the adequacy of the related disclosures in Note 5 to the consolidated financial statements.

We determined that there were no other critical audit matters

We have served as the Company’s auditor since 2026

Lumpur, Malaysia

AND SUBSIDIARIES

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Debt securities held-to-maturity

Other receivables

Prepayments, Deposits and Other receivables

Advances to suppliers

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Long-term prepayment

Long-term receivables

Total non-current assets

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Lease liabilities, current portion

Deferred Revenue

Total current liabilities

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TOTAL LIABILITIES

Common stock ($ 0.001 par value, 250,000,000 shares authorized, 6,043,769 and 5,383,769 shares issued and outstanding as of March 31, 2025 and 2024, respectively)

Common stock ($ 0.001

par value, 250,000,000 shares authorized,

781,256 and 402,918

shares issued and outstanding as of March 31, 2026 and March 31, 2025, respectively (1)

Additional paid-in capital

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Accumulated other comprehensive income

Total equity attributable to equity holders of ADDENTAX GROUP CORP.

Non-controlling interests

TOTAL LIABILITIES AND EQUITY

(1) Prior period results have been adjusted to reflect the 1 to 15 reverse stock split effected

in the form of a stock combination in March 30, 2026.

See Note 3(o), Reverse Stock Split , for details.

accompanying notes to the consolidated financial statements.

AND SUBSIDIARIES

STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

STATEMENTS OF LOSS

Dollars, except share data or otherwise stated)

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( 3,309,419 )

( 2,339,448 )

Interest income

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( 1,146,843 )

( 3,652,803 )

Other income (expenses), net

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Income tax expense

LOSS FROM CONTINUING OPERATIONS, NET OF INCOME TAXES

( 4,937,020 )

( 5,094,198 )

Foreign currency translation gain

TOTAL COMPREHENSIVE LOSS

Income on discontinued operations

$ ( 4,469,165 )

$ ( 5,094,198 )

EARNING PER SHARE

Basic and diluted

ATTRIBUTABLE TO:

Equity holders of the Company

( 4,469,059 )

( 5,094,198 )

Non-controlling interests

$ ( 4,469,165 )

$ ( 5,094,198 )

LOSS PER SHARE

Loss per share from continuing operations – Basic and

Earning per share from discontinued

operations – basic and diluted (1)

Weighted average number of shares outstanding – Basic and diluted (1)

(1) Prior period results have been adjusted to reflect the 1 to 15 reverse stock split effected

in the form of a stock combination in March 30, 2026.

See Note 3(o), Reverse Stock Split , for details.

accompanying notes to the consolidated financial statements.

AND SUBSIDIARIES

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Dollars, except share data or otherwise stated)

THE YEARS ENDED MARCH 31, 2026 AND 2025

( 4,469,165 )

( 5,094,198 )

OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX

Foreign currency translation (loss) gain

TOTAL COMPREHENSIVE LOSS

$ ( 4,640,742 )

$ ( 5,046,064 )

ATTRIBUTABLE TO:

Equity holders of the Company

( 4,640,636 )

( 5,046,064 )

Non-controlling interests

TOTAL COMPREHENSIVE LOSS

$ ( 4,640,742 )

$ ( 5,046,064 )

accompanying notes to the consolidated financial statements.

AND SUBSIDIARIES

STATEMENTS OF CHANGES IN EQUITY

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( 8,569,190 )

Issuance of common stocks before reversed split

Reverse stock split

( 33,655,878 )

New shares for round up of fragmental shares

Issuance of new shares after reversed split

Issuance of new shares

Additional paid-in capital from conversion of convertible debts

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( 5,094,198 )

BALANCE AT MARCH 31, 2025 (1)

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Issuance of new shares

Reverse stock split

New shares for round up of fragmental shares

Additional paid-in capital from conversion of convertible debts

Appropriation of Statutory reserve

Noncontrolling interest through acquisition of KEEMO

Foreign currency translation

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( 4,469,059 )

( 4,469,165 )

BALANCE AT MARCH 31, 2026

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$ ( 18,132,849 )

(1) Prior period results

have been adjusted to reflect the 1 to 15 reverse stock split effected in the form of a stock combination in March 30, 2026.

3(o), Reverse Stock Split , for details.

accompanying notes to the consolidated financial statements.

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CASH FLOWS FROM OPERATING ACTIVITIES:

Net (loss) income

$ ( 4,469,165 )

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Amortization of debt discount

Stock-Based Compensation Expense

Investment income

Fair value (gain) or loss

( 1,986,886 )

(Gain)/Loss on debts extinguishment

Gain on bargain purchase

Loss from sale of property and equipment

(Gain)/Loss from sale of property and equipment

Loss on disposal of subsidiary

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Advances from customers

Net cash provided by (used in) operating activities

Net cash (used in) provided by operating activities

$ ( 603,603 )

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Cash acquired from subsidiary

Proceeds from sale of property and equipment and intangible assets

Cash decreased in disposal of subsidiaries

Net cash (used in) provided by investing activities

Net cash used in by investing activities

$ ( 296,852 )

$ ( 205,811 )

CASH FLOWS FROM FINANCING ACTIVITIES:

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Repayment of related party borrowings

( 4,689,583 )

Cash advance to related parties

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Repayment of bank borrowings

Restricted cash

Payment of issuance cost of convertible notes

Release of restricted cash

Payment for redemption of convertible debts

Proceeds from issuance of common stocks

Net cash (used in) provided by financing activities

Net cash provided by (used in) financing activities

$ ( 1,102,141 )

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Cash paid during the year for income tax

Supplemental disclosure of non-cash investing and financing activities:

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

accompanying notes to the consolidated financial statements.

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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”).

(the “Company”), through its subsidiaries, is engaged in garment manufacturing, logistics services and consulting

The Company conducts its garment manufacturing and logistics services businesses primarily through its PRC operating subsidiaries

and conducts its consulting service through Yingxi Industrial Chain Investment Co., Ltd., or Yingxi HK, its Hong Kong subsidiary.

the fiscal year ended March 31, 2026, the Company disposed of its property management and subleasing business, and the results of such

business have been classified as discontinued operations.

See Note 4, Disposition of Subsidiaries and Discontinued Operations ,

of March 31, 2026, the Company’s principal subsidiaries consisted of the following entities:

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Name of entity

Place of incorporation

Principal activities

Immediate holding company

% of effective ownership interest held by the Group in 2025

% of effective ownership interest held by the Group in 2024

incorporation

holding company

% of effective ownership

interest held by the

Group in 2026

% of effective ownership

interest held by the

Yingxi Industrial Chain Group Co., Ltd.

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Yingxi Industrial Chain Group Co., Ltd.

Qianhai Yingxi Textile & Garments Co., Ltd.

Yingxi Textile & Garments Co., Ltd.

(“WFOE”) (f/k/a Qianhai Yingxi Textile & Garments Co., Ltd.)

Investment holding

Yingxi Industrial Chain Investment Co., Ltd.

Shenzhen Qianhai Yingxi Industrial Chain Services Co., Ltd.

Investment holding

Qianhai Yingxi Textile & Garments Co., Ltd.

Shenzhen Yingxi Industrial Chain Services Co., Ltd.

(“YX”) (f/k/a Shenzhen Qianhai Yingxi Industrial Chain Services Co., Ltd.)

Investment holding & Garment Manufacturing

Textile & Garments Co., Ltd.

(f/k/a Qianhai Yingxi Textile & Garments Co., Ltd.)

Dongguan Heng Sheng Wei Garments Co., Ltd.

Garment Manufacturing

Shenzhen Qianhai Yingxi Industrial Chain Services Co., Ltd.

Yingxi Industrial Chain Services Co., Ltd.

(f/k/a Shenzhen Qianhai Yingxi Industrial Chain Services Co., Ltd.)

Dongguan Yushang Clothing Co., Ltd.

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Shenzhen Qianhai Yingxi Industrial Chain Services Co., Ltd.

Dongguan Aotesi Garments Co.,Ltd.

Garment Manufacturing

Shenzhen Qianhai Yingxi Industrial Chain Services Co., Ltd.

Shenzhen Xin Kuai Jie Transportation Co., Ltd.

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Shenzhen Qianhai Yingxi Industrial Chain Services Co., Ltd.

Dongguan Hongxiang Commercial Co., Ltd.

Property Management & Subleasing

Shenzhen Qianhai Yingxi Industrial Chain Services Co., Ltd.

Keemo Fashion Group Limited (“KMFG”)

Nevada, the United States

Investment holding & Acquired operations

Addentax Group Corp.

was acquired near the end of the fiscal year ended March 31, 2026.

As of March 31, 2026, KMFG’s revenue contribution was not significant,

and management does not currently present KMFG as a separate business line or reportable segment.

BASIS OF PRESENTATION

(a) Basis of Accounting

Basis of Accounting

accompanying consolidated financial statements of the Company and its subsidiaries are prepared pursuant to the rules and regulations

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All material inter-company accounts and transactions have been eliminated in consolidation.

(b) Going Concern

The Group has a history of operating losses, $ 5,094,198 and $ 3,109,418

and for the years ended March 31, 2025 and 2024.

These conditions raise substantial doubt about the Group’s ability to continue

as a going concern.

Historically, the Group has relied principally on both operational

sources of cash and non-operational sources of equity and debt financing to fund its operations and business development.

ability to continue as a going concern depends on management’s ability to successfully execute its business plan which includes

increasing the utilization rate of existing staff and potential financing from public market or private placement.

However, there is

no assurance that the measures above can be achieved as planned.

Nevertheless, management prepared the consolidated financial statements

assuming the Group will continue as a going concern.

The consolidated financial statements do not include any adjustments that might result

from the outcome of this uncertainty.

Going Concern

Company has a history of net losses.

The Company incurred net losses of $ 4,469,165 and $ 5,094,198 for the years ended March

31, 2026 and 2025, respectively.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern

within one year after the date that these consolidated financial statements are issued.

Company’s ability to continue as a going concern is dependent upon management’s ability to successfully implement its business

plans, improve operating results, manage operating costs, collect accounts receivable, and obtain additional financing when necessary.

Management’s plans include, among other things, continuing to develop the Company’s garment manufacturing, logistics services

and consulting service businesses, improving operating efficiency, controlling general and administrative expenses, and seeking additional

financing through public or private equity or debt financing if required.

can be no assurance that the Company will be successful in achieving these plans or that additional financing will be available on acceptable

terms, or at all.

The accompanying consolidated financial statements have been prepared on a going concern basis and do not include any

adjustments that might result from the outcome of this uncertainty.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

(a) Use of Estimates

preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions

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however, actual results could differ materially from those estimates.

Principles of Consolidation .

(b) Principles of Consolidation

consolidated financial statements include the accounts of the Company and all subsidiaries, as discussed above.

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significant intercompany balances and transactions have been eliminated in consolidation.

Fair Value Measurement

Standards Codification (“ASC”) 820 “ Fair Value Measurements and Disclosures “, which defines fair value, establishes

a framework for measuring fair value and expands disclosures about fair value measurements.

The Company accounts for business combinations

in accordance with ASC 805, Business Combinations, using the acquisition method of accounting.

The Company first evaluates whether an

acquired set of activities and assets constitutes a business, including whether the acquired set includes inputs and substantive processes

that together significantly contribute to the ability to create outputs.

The Company also considers whether substantially all of the fair

value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, as applicable.

For acquisitions that are accounted for

as business combinations, the Company recognizes, separately from goodwill, the identifiable assets acquired, liabilities assumed and

any noncontrolling interest in the acquiree at their estimated acquisition-date fair values.

The purchase consideration transferred is

measured at fair value as of the acquisition date.

The excess of the purchase consideration transferred and the fair value of any noncontrolling

interest in the acquiree over the fair value of the identifiable net assets acquired and liabilities assumed is recorded as goodwill.

If the fair value of the identifiable net assets acquired exceeds the purchase consideration transferred and the fair value of any noncontrolling

interest, the Company recognizes a bargain purchase gain after reassessing whether all assets acquired and liabilities assumed have been

properly identified and measured.

Acquisition-related costs, including legal,

accounting, valuation and other professional fees, are expensed as incurred and included in general and administrative expenses.

the initial accounting for a business combination is incomplete by the end of the reporting period in which the acquisition occurs, the

Company reports provisional amounts for the items for which the accounting is incomplete.

During the measurement period, which shall not

exceed one year from the acquisition date, the Company adjusts the provisional amounts recognized at the acquisition date to reflect new

information obtained about facts and circumstances that existed as of the acquisition date and, if known, would have affected the measurement

of the amounts recognized as of that date.

Goodwill represents the excess of the purchase

consideration transferred and the fair value of any noncontrolling interest over the estimated fair value of identifiable net assets acquired

and liabilities assumed in a business combination.

Goodwill is not amortized, but is tested for impairment at least annually, or more

frequently if events or changes in circumstances indicate that goodwill may be impaired.

The Company evaluates goodwill for impairment

at the reporting unit level.

The Company may first perform a qualitative assessment to determine whether it is more likely than not that

the fair value of a reporting unit is less than its carrying amount.

If the qualitative assessment indicates that it is more likely than

not that the carrying amount exceeds fair value, or if the Company elects to bypass the qualitative assessment, the Company performs a

quantitative impairment test.

An impairment loss is recognized to the extent that the carrying amount of the reporting unit exceeds its

fair value, limited to the carrying amount of goodwill allocated to that reporting unit.

(d) Fair Value Measurement

ASC 820, Fair Value Measurement, defines fair value, establishes a framework for measuring fair value and requires

enhanced disclosures about fair value measurements.

The statement clarifies that the exchange

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to estimate due to the related party nature of the underlying transactions.

Cash and Cash Equivalents

(e) Cash and Cash Equivalents

Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

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banks that are authorized to conduct foreign exchange business.

Accounts Receivable, net

(f) Accounts Receivable, net

receivable, net are stated at the historical carrying amount net of allowance for doubtful accounts.

receivables are classified as financial assets subsequently measured at amortized cost.

Account receivables are recognized when the Company

receivable are classified as financial assets subsequently measured at amortized cost.

Accounts receivable are recognized when the Company

becomes a party to the contractual provisions of the receivables.

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a material impact on the opening balance of accumulated deficit.

To determine expected credit losses on account receivables, the Company

To determine expected credit losses on accounts receivable, the Company

will consider the historic credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions,

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Allowance for doubtful accounts was $ 51,629

and Nil for the years ended March 31, 2025 and 2024.

and 49,457 for the years ended March 31, 2026 and 2025.

are written off when there is information indicating that the counterparty is in severe financial difficulty and there is no realistic

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is no change in the accounting policies for the year ended March 31, 2026.

(g) Inventories

Manufacturing

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of inventories are recognized as an expense in the period the impairment or loss occurs.

No write-downs for obsolete finished goods for

the years ended March 31, 2025 and 2024.

Plant and Equipment

No inventory write-downs were recognized during the years ended March 31, 2026 and 2025.

(h) Plant and Equipment

and equipment are carried at cost less accumulated depreciation.

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incurred, whereas significant renewals and betterments are capitalized.

Accounting for the Impairment of Long-Lived Assets

(i) Accounting for the Impairment of Long-Lived Assets

assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying

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was no impairment of long-lived assets as of March 31, 2026 and 2025.

Revenue Recognition

is generated through sale of goods, delivery services, and provision of property management and subleasing.

Revenue is recognized when

a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that the Company

expects to receive in exchange for those goods or services.

In addition, the standard requires disclosure of the nature, amount, timing,

and uncertainty of revenue and cash flows arising from contracts with customers.

The amount of revenue that is recorded reflects the

consideration that the Company expects to receive in exchange for those goods and services.

The Company applies the following five-step

model in order to determine this amount:

identification of the promised goods and services in the contract;

determination of whether the promised goods and services are performance obligations, including whether they are distinct in the context

of the contract;

measurement of the transaction price, including the constraint on variable consideration;

allocation of the transaction price to the performance obligations;

recognition of revenue when (or as) the Company satisfies each performance obligation.

Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled

to in exchange for the goods or services it transfers to the customer.

Once a contract is determined to be within the scope of ASC 606

at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which

of these performance obligations are distinct.

The Company recognizes as revenues the amount of the transaction price that is allocated

to the respective performance obligation when the performance obligation is satisfied or as it is satisfied.

Generally, the Company’s

performance obligations are transferred to customers at a point in time, typically upon delivery of the good or service.

income from operating leases is recognized on a straight-line basis over the term of the relevant lease.

of revenues for garment manufacturing segment includes the direct raw material cost, direct labor cost, manufacturing overheads including

depreciation of production equipment and rent.

Cost of revenue for logistics services segment includes gasoline and diesel fuel, toll

charges and subcontracting fees.

Cost of revenue of property management and subleasing business was mainly the amortization of right-of-used

assets for the subleasing business.

Earnings Per Share

(j) Revenue Recognition

from continuing operations is generated primarily from garment manufacturing, logistics services and consulting services.

recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, when control of the promised goods or services

is transferred to the customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for

those goods or services.

Company applies the following five-step model to recognize revenue from contracts with customers:

(i) identification of the contract

with the customer;

(ii) identification of the performance obligations in the contract;

(iii) determination of the transaction price;

(iv) allocation of the transaction price to the performance obligations in the contract;

and (v) recognition of revenue when, or as,

the Company satisfies the performance obligations.

following table summarizes the Company’s major revenue streams for the years ended March 31, 2026 and 2025:

OF MAJOR REVENUE STREAMS

Type of Revenue

Amount for the year ended

March 31, 2026

Amount for the year ended

March 31, 2025

Principal/Agent Assessment

Timing of Revenue Recognition

Garment Manufacturing Business

Point in time

Logistics Service

Point in time

Consulting Services

Point in time

Property Management Business

$ Nil / Discontinued operation

the garment manufacturing business, revenue is generated primarily from the sale of garments and related products to customers based

on purchase orders or sales contracts.

The Company generally recognizes revenue at a point in time when control of the products is transferred

to the customer, which typically occurs upon delivery of the products to the customer or other delivery point specified in the relevant

customer arrangement.

At that time, the customer has the ability to direct the use of, and obtain substantially all of the remaining

benefits from, the products.

Revenue is measured based on the transaction price specified in the customer contract or purchase order,

net of applicable discounts, returns, allowances or other variable consideration, if any.

The Company did not have any material

discounts, returns, allowances or other variable consideration related to garment manufacturing revenue during the year ended March 31,

the logistics services business, revenue is generated primarily from the provision of delivery, transportation and related logistics

The Company generally recognizes revenue at a point in time when the related logistics service has been completed in

accordance with the customer arrangement.

The Company’s performance obligation is typically satisfied when the goods have been

delivered to the agreed destination or when the relevant delivery or logistics service has otherwise been completed and accepted by

the customer.

Revenue is measured based on the agreed service fee specified in the customer contract, delivery order, settlement

statement or other relevant arrangement.

The Company did not have any material rebates, credits or other variable consideration

related to logistics services revenue during the year ended March 31, 2026.

the consulting services business, revenue is generated through Yingxi HK, the Company’s Hong Kong subsidiary.

The consulting services

primarily includes customer consultation, appointment coordination, referral and liaison with third-party insurance brokers or other

service providers, and related administrative support.

The Company generally recognizes revenue when the agreed consulting, referral,

coordination or administrative support services have been completed and the Company’s right to consideration has been established.

If the consideration is contingent upon the successful completion or effectiveness of a customer arrangement with a third-party service

provider, the Company recognizes revenue only when the contingency is resolved and it is probable that a significant reversal of revenue

will not occur.

The Company did not have any material refunds, clawbacks or other variable consideration related to consulting

services revenue during the year ended March 31, 2026.

Company evaluates whether it acts as a principal or an agent in each consulting services arrangement.

To the extent the Company acts as

an agent and does not control the underlying insurance products or other third-party services before they are provided to customers,

the Company recognizes revenue on a net basis for the consulting, referral or coordination fee to which it expects to be entitled, and

does not recognize the gross amount of insurance premiums or other amounts charged by third-party service providers.

Company’s property management and subleasing business was disposed of during the fiscal year ended March 31, 2026 and has been

classified as discontinued operations.

Accordingly, the revenue recognition policies described above relate to the Company’s continuing

Company’s contracts generally do not include a significant financing component, as the period between the transfer of the promised

goods or services and payment is generally one year or less.

Accounts receivable are recorded when the Company has an unconditional right

to consideration.

Amounts received from customers before the Company satisfies its performance obligations are recorded as contract liabilities

or deferred revenue and are recognized as revenue when the related performance obligations are satisfied.

Balances and Variable Consideration

liabilities primarily consist of deferred revenue related to payments or consideration received before the Company satisfies its performance

Deferred revenue is recognized as revenue when the related performance obligations are satisfied.

of March 31, 2026 and 2025, the Company’s contract liabilities, presented as deferred revenue, were approximately $ 45,255

respectively.

Revenue recognized during the year ended March 31, 2026 from amounts included in contract liabilities at the beginning

of the fiscal year was $ 0 .

deferred revenue balance as of March 31, 2026 was primarily related to the digital publishing business acquired through KMFG near the

end of the fiscal year.

The Company did not have material refund, rebate, discount, credit or other variable consideration arrangements

during the year ended March 31, 2026.

The Company also did not identify any other material contract asset, contract liability or variable

consideration disclosure required under ASC Topic 606.

(k) Earnings Per Share

Company reports earnings (loss) per share in accordance with ASC 260 “Earnings Per Share”, which requires presentation of

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calculation when inclusion of such shares would be anti-dilutive.

(l) Income Taxes

Company accounts for income taxes using the asset and liability method prescribed by ASC 740, Income Taxes.

Under this method,

deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and

liabilities using enacted tax rates that will be in effect in the years in which the differences are expected to reverse.

records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not

that some portion, or all, of the deferred tax assets will not be realized.

The effect on deferred taxes of a change in tax rates is

recognized as income or loss in the period that includes the enactment date.

Company has a history of tax losses and there is no convincing evidence that sufficient taxable income will be available against which

the deferred tax asset can be utilized, therefore, the Company does not recognize any tax benefits for the year ended March 31, 2025

Company’s Chinese subsidiaries are governed by the Income Tax Laws of the PRC.

The PRC federal statutory tax rate is 25 %.

files income tax returns with the relevant government authorities in the PRC.

The Company does not believe there will be any material

changes in its unrecognized tax positions over the next 12 months.

Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense.

The Company does not have any accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense

recognized during the years ended March 31, 2025 and 2024.

The Company’s effective tax rate differs from the PRC federal statutory

rate primarily due to non-deductible expenses, temporary differences and preferential tax treatments.

federal tax legislation, commonly referred to as the Tax Cuts and Jobs Act (the “U.S.

Tax Reform”), was signed into

law on December 22, 2017.

Tax Reform modified the U.S.

Internal Revenue Code by, among other things, reducing the statutory

federal corporate income tax rate from 35% to 21 % for taxable years beginning after December 31, 2017 ;

limiting and/or eliminating

many business deductions;

migrating the U.S.

to a territorial tax system with a one-time transaction tax on a mandatory deemed repatriation

of previously deferred foreign earnings of certain foreign subsidiaries;

subject to certain limitations, generally eliminating U.S.

income tax on dividends from foreign subsidiaries;

and providing for new taxes on certain foreign earnings.

Taxpayers may elect to pay

the one-time transition tax over eight years, or in a single lump-sum payment.

The Company measured the current and deferred taxes based

on the provisions of the Tax legislation.

After the Company’s measurement, no deferred tax benefit nor expense was recorded relating

to the Tax Act changes for the years ended March 31, 2025 and 2024.

Under this method, deferred

tax assets and liabilities are determined based on the temporary differences between the financial reporting and tax bases of assets

and liabilities using enacted tax rates expected to be in effect in the periods in which the temporary differences are expected to reverse.

The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income or loss in the period that includes

the enactment date.

Company records a valuation allowance to reduce deferred tax assets to the amount that is more likely than not to be realized.

In evaluating

the realizability of deferred tax assets, management considers all available evidence, including historical operating results, expected

future taxable income, tax planning strategies and the nature of temporary differences.

Due to the Company’s history of losses

and the uncertainty of generating sufficient future taxable income, the Company has recorded a valuation allowance against deferred tax

assets to the extent management determined that realization of such deferred tax assets was not more likely than not.

Company and its subsidiaries are subject to income taxes in the jurisdictions in which they are incorporated or conduct business, including

the United States, the PRC and Hong Kong.

The Company’s PRC subsidiaries are generally subject to PRC Enterprise Income Tax at

the statutory rate of 25 %, unless preferential tax rates or other tax incentives are available and applicable.

Yingxi HK is incorporated

in Hong Kong and is subject to Hong Kong profits tax.

The standard Hong Kong profits tax rate for corporations is 16.5 %, subject to the

applicable two-tiered profits tax rates regime where applicable.

The Company’s parent entity, Addentax Group Corp., and KMFG are

entities and are subject to U.S.

federal income tax at the applicable federal corporate income tax rate.

Company evaluates uncertain tax positions in accordance with ASC 740.

Interest and penalties related to uncertain tax positions, if any,

are recognized as a component of income tax expense.

The Company did not have any material unrecognized tax benefits, accrued interest

or penalties related to uncertain tax positions for the years ended March 31, 2026 and 2025.

The Company does not expect that its unrecognized

tax positions will materially change within the next 12 months.

provision for U.S.

federal income taxes has been made for the years ended March 31, 2026 and 2025 because the relevant U.S.

did not generate taxable income during the respective periods.

No provision for Hong Kong profits tax has been made for the years ended March 31, 2026 and 2025 because

Yingxi HK did not generate taxable income during the respective periods.

Income tax expense recognized for the years ended March 31, 2026 and 2025 was primarily attributable

to the Company’s PRC subsidiaries.

Company determines if an arrangement is a lease at inception.

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value of lease payments over the lease term.

As most of the leases do not provide an implicit rate, the Company generally use the incremental

As most of the leases do not provide an implicit rate, the Company generally uses the incremental

borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement

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basis over the lease term.

Related parties

(n) Related parties

are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are

controlled by, or are under common control with the Company.

Related party also include principal owners of the Company, its management,

members of the immediate families of principal owners of the Company and its management and other parties with which he Company may deal

with if one party control or can significantly influence the management or operating policies of the other to an extent that one of the

Related parties also include principal owners of the Company, its management,

members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal

with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the

transacting parties might be prevented from fully pursuing its own separate interests.

1 unchanged sentence

party transactions.

Recently issued and adopted accounting pronouncements

for Convertible Instruments:

In August 2020, FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s

Own Equity (ASU 2020-06), as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards

while maintaining or improving the usefulness of the information provided to users of financial statements.

Among other changes, the

new guidance removes from GAAP separation models for convertible debt that require the convertible debt to be separated into a debt and

equity component, unless the conversion feature is required to be bifurcated and accounted for as a derivative or the debt is issued

at a substantial premium.

As a result, after adopting the guidance, entities will no longer separately present such embedded conversion

features in equity and will instead account for the convertible debt wholly as debt.

The new guidance also requires use of the “if-converted”

method when calculating the dilutive impact of convertible debt on earnings per share, which is consistent with the Company’s current

accounting treatment under the current guidance.

The guidance is effective for financial statements issued for fiscal years beginning

after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted, but only at the beginning of the

Company reviews new accounting standards as issued.

Management has not identified any other new standards that it believes will have

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

DISPOSITION OF SUBSIDIARIES

Reverse Stock Split

March 30, 2026, the Company effected a reverse stock split of its outstanding shares of common stock at a ratio of one-for-fifteen.

a result of the reverse stock split, every fifteen shares of common stock outstanding immediately prior to the effective time were reclassified

and combined into one share of common stock, without any change in the par value of $ 0.001 per share or the total number of authorized

No fractional shares were issued in connection with the reverse stock split, and stockholders who would otherwise have been entitled

to receive a fractional share received one whole share of common stock in lieu of such fractional share.

share counts, weighted-average shares outstanding, basic and diluted net loss per share, share-based awards, warrants and convertible

preferred stock conversion amounts for all periods presented in these consolidated financial statements have been retrospectively adjusted

to reflect the reverse stock split to maintain period-to-period comparability.

Total stockholders’ equity was not affected by the

reverse stock split.

(p) Recently issued and adopted accounting pronouncements

Company reviews new accounting standards as issued by the Financial Accounting Standards Board, or FASB, and evaluates the potential

impact of such standards on the Company’s consolidated financial statements and related disclosures.

November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

requires enhanced disclosures about significant segment expenses and other segment items and applies to all public entities, including

entities with a single reportable segment.

The Company adopted ASU 2023-07 for the fiscal year ended March 31, 2026.

The adoption of

ASU 2023-07 did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows,

but resulted in enhanced segment-related disclosures.

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

ASU 2023-09 requires enhanced

income tax disclosures, including additional disaggregation of information in the rate reconciliation and income taxes paid by jurisdiction.

The Company adopted ASU 2023-09 for the fiscal year ended March 31, 2026.

The adoption of ASU 2023-09 did not have a material impact

on the Company’s consolidated financial position, results of operations or cash flows, but resulted in enhanced income tax-related

November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures

(Subtopic 220-40):

Disaggregation of Income Statement Expenses.

ASU 2024-03 requires public business entities to provide additional disclosures

about certain categories of expenses included in relevant income statement captions.

ASU 2024-03 is effective for annual reporting periods

beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027, with

early adoption permitted.

The Company is currently evaluating the impact of this standard on its consolidated financial statement disclosures.

November 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversions

of Convertible Debt Instruments.

ASU 2024-04 clarifies the requirements for determining whether certain settlements of convertible debt

instruments should be accounted for as induced conversions.

ASU 2024-04 is effective for annual reporting periods beginning after December

15, 2025 and interim reporting periods within those annual reporting periods, with early adoption permitted.

The Company is currently

evaluating the impact of this standard on its consolidated financial statements and related disclosures.

has not identified any other recently issued accounting standards that are expected to have a material impact on the Company’s

consolidated financial statements or related disclosures.

DISPOSITION OF SUBSIDIARIES AND DISCONTINUED OPERATIONS

Company disposed of its subsidiary Dongguan Aotesi Garments Co., Ltd., (“AOT”) a PRC company, a

manufacturing company in the garment manufacturing segment, in May 2025 to the local management of AOT.

After the disposition, AOT

became a third party to the Company.

The Company does not conduct any business with AOT.

The Company carries on the garment

manufacturing segment business through other subsidiaries.

The disposition of AOT did not qualify as discontinued

position of AOT at disposal date and gain or loss on disposal:

Manufacturing Segment

SCHEDULE OF FINANCIAL POSITION OF ENTITIES AND GAIN OR LOSS ON DISPOSAL

Financial position of AOT

date of disposal

Current assets

Noncurrent assets

Current liabilities

consideration was $ 13,829 , resulting in a loss of $ 12,137 recognized on the disposal.

The difference between AOT’s

net assets of $ 26,179 and the consideration received was $ 12,350 , which was reduced by the related foreign currency translation difference

Company disposed of its subsidiary Dongguan Hongxiang Commercial Co., Ltd., (“HX”) a PRC company, a

company engaged in property management and subleasing business, on July 1, 2025 to the local management of HX.

disposition, HX became a third party to the Company.

The Company does not conduct any business with HX.

The Company no longer

carries on the property management and subleasing business through HX or any other subsidiary.

The disposition of HX qualified as

discontinued operations.

position of HX at disposal date and gain on disposal:

management Segment

Financial position of HX

July 1, 2025,

date of disposal

Current assets

Noncurrent assets

Current liabilities

( 1,588,983 )

Net liabilities

consideration was $ 13,829 , resulting in a gain of $ 20,801 recognized on the disposal.

Company disposed of its subsidiary Shantou Yi Bai Yi Garment Co., Ltd, a PRC Company (“YBY”), a manufacturing company in

1 unchanged sentence

After disposition, YBY became third party to the

The Company will not have any businesses with YBY.

The Company will carry on the garment manufacturing segment business through

The Company does not conduct any businesses with YBY.

The Company carries on the garment manufacturing segment business through

other subsidiaries.

2 unchanged sentences

Manufacturing Segment

SCHEDULE OF FINANCIAL POSITION OF ENTITIES AND GAIN OR LOSS ON DISPOSAL

Financial position of YBY

4 unchanged sentences

Current liabilities

consideration was Nil , with the reversal of related foreign currency translation reserve brought forward, resulting in a loss of $ 334,135

consideration was Nil ,

with the reversal of related foreign currency translation reserve brought forward, resulting in a loss of $ 334,135

recognized on the disposal.

The difference between

YBY’s net assets of $ 302,258

and the consideration received was $ 302,258 ,

which was increased by the related foreign currency translation difference of $ 31,877 .

BUSINESS COMBINATION

March 30, 2026, the Company completed the acquisition of 34,200,000 Shares of KMFG, a Nevada-incorporated company headquartered in Shenzhen,

People’s Republic of China.

KMFG operates two core business segments:

(i) an apparel and garment trading business focused on the

wholesale distribution of men’s and women’s apparel to distributors primarily in China, sourcing directly from manufacturers

without maintaining its own production facilities;

and (ii) a digital publishing business conducted through its wholly owned subsidiary,

GW Reader Sdn.

in Malaysia, which operates a mobile-based online fiction platform utilizing a pay-per-chapter microtransaction model

for global readers.

The aggregate purchase price for the acquisition was approximately $ 5.5 million, which was satisfied through the

transfer of a portion of an existing bond held by the Company.

In connection with the consummation of the acquisition, the Company transferred

a portion of such bond at closing, in the principal amount of approximately $ 5.5 million, to the Seller (or its designated counterparty)

as consideration for the Shares.

Following the completion of the acquisition, the Company holds approximately 62.18 % of the voting rights

of the issued and outstanding shares of Keemo Fashion, on a fully diluted basis, and Keemo Fashion has become a controlled subsidiary

of the Company.

Company recognized goodwill of $ 5,694,696 on this acquisition.

The acquisition has been accounted for under the acquisition

method of accounting in accordance with ASC 805, “Business Combinations”.

The results of KMFG’s operations have been

included in the consolidated financial statements since its acquisition date.

following table summarizes the fair values of the assets acquired and liabilities assumed as of the date of acquisition.

This table represents

the initial accounting for the acquisition.

These provisional amounts may be adjusted in the measurement period (that will not exceed

one year from the acquisition):

SCHEDULE OF PURCHASE PRICE ALLOCATION

March 30, 2026

Trade receivable

Other receivables

Accrued liabilities, other payables and deposits received

Deferred Revenue

Amount due to related parties

Noncontrolling interest

Net book value at acquisition date

Goodwill at acquisition

Purchase consideration

Pro Forma Condensed Combined Statement of Operations

The following unaudited pro forma condensed combined statement of operations presents the results of operations

of the Company for the year ended March 31, 2026 as if the acquisition of KMFG had occurred on April 1, 2025, the beginning of the fiscal

The pro forma information is presented for illustrative purposes only and is not necessarily indicative of the actual results of

operations that would have occurred had the acquisition been completed on April 1, 2025, nor are they indicative of future operating results.

unaudited pro forma condensed combined statement of operations for the fiscal year ended March 31, 2026 give effect to the Acquisition

as if it had occurred on April 1, 2025 (the beginning of the fiscal year).

LOSS FROM OPERATIONS

$ ( 1,529,220 )

( 1,596,308 )

$ ( 4,468,885 )

( 4,536,253 )

Net loss attribute to Non-control Interest ( 37.82 %)

Net loss attribute to equity holders of ADDENTAX GROUP CORP.

( 4,468,885 )

( 4,510,774 )

$ ( 4,468,885 )

( 4,536,253 )

FOREIGN CURRENCY TRANSLATION LOSS

TOTAL COMPREHENSIVE LOSS

( 4,635,798 )

( 4,714,427 )

Other comprehensive loss attribute to Non-control Interest ( 37.82 %)

Total comprehensive loss attribute to equity holders of ADDENTAX GROUP CORP.

( 4,635,798 )

( 4,710,167 )

Total comprehensive loss attribute to Non-control Interest ( 37.82 %)

NET LOSS PER SHARE, BASIC AND DILUTED

Weighted average number of common shares outstanding, basic and diluted

( 55,000,000 )

pro forma adjustments are based upon available information and certain assumptions that management believes are reasonable under the

circumstances.

Basis of Presentation

The accompanying unaudited pro forma condensed combined statement of operations gives effect to the Company’s

acquisition of a 62.18 % controlling interest in KMFG (“Target”) (the “Acquisition”).

The Acquisition was signed on

February 17, 2026 and consummated on March 30, 2026.

unaudited pro forma condensed combined statement of comprehensive loss is presented to illustrate the effect of the Acquisition as

if it had been completed on April 1, 2025.

pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the results of operations that would have actually occurred had the Acquisition been completed at the beginning of the periods presented,

nor is it necessarily indicative of future consolidated results of operations.

Principles of Consolidation and Noncontrolling Interest

The Company consolidates Target in the pro forma statement of operations because the Acquisition results in the

Company holding a 62.18 % controlling voting interest in Target.

Accordingly, the Company reflects 100% of Target’s revenues and expenses

in the pro forma combined statement of operations.

Net income and total comprehensive income are allocated between the controlling interest

and noncontrolling interest based on their respective ownership percentages of 62.18 % and 37.82 %, respectively.

Significant Pro Forma Adjustments

The material pro forma adjustments

included in the accompanying unaudited pro forma condensed combined statement of operations are as follows:

To record the total purchase consideration of $ 5,500,000 transferred to acquire the 62.18 % controlling interest in Target, and to record

preliminary fair value adjustments to identifiable assets acquired and liabilities assumed, with the excess recorded as goodwill.

To reflect the allocation of net loss and comprehensive loss between the controlling interest and the 37.82 % noncontrolling interest.

To eliminate intercompany transactions between the Company and Target.

To recognize income tax effects associated with the pro forma adjustments, based on enacted statutory tax rates.

No pro forma adjustments were made for new or refinanced indebtedness, as no new debt was incurred in connection with the Acquisition.

Allocation of Net Income and Comprehensive Income

net income reflects the total results of the combined group.

Net income attributable to the noncontrolling interest ( 37.82 %) is deducted

from consolidated net income to arrive at net income attributable to the Company’s stockholders.

total comprehensive income is presented for the consolidated group, and comprehensive income attributable to noncontrolling interest

( 37.82 %) is separately disclosed to derive total comprehensive income attributable to the Company’s stockholders.

Limitations of Pro Forma Information

pro forma financial information does not reflect:

expected operating synergies, cost savings, or revenue enhancements;

one-time transaction, integration, or restructuring costs;

changes in operations, capital expenditures, or other anticipated events.

Accordingly, the pro forma condensed combined financial information is not intended to represent or be indicative

of the actual results of operations that would have occurred had the Acquisition been completed on April 1, 2025, nor is it indicative

of future operating results.

RELATED PARTY TRANSACTIONS

6 unchanged sentences

legal representative of XKJ

legal representative of YBY, ceased to be related party at August 31, 2024 when YBY was disposed of.

Rui and Riches Affiliated Parties (1)

Wu Rui is the Chief Operating Officer of the Company.

The Riches Affiliated Parties are affiliated with Mr.

Wu Rui and were involved

in the Company’s related-party share exchange transaction.

related parties

shareholders, directors and related parties

(1) For purposes of

this section, “Riches Affiliated Parties” refers to Riches FO Holdings Limited, Riches Family Office Limited and Riches Elite

Technology (Shenzhen) Co., Ltd.

Riches FO Holdings Limited is controlled by Mr.

Wu Rui, the Company’s Chief Operating Officer,

and was the seller in the Company’s related-party share exchange transaction involving Riches Family Office Limited.

Technology (Shenzhen) Co., Ltd.

is the operating subsidiary of Riches Family Office Limited.

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

1 unchanged sentence

provided guarantee to the consideration receivable of transfer of a debt security to a third

May 15, 2026, the Company entered into a Share Exchange Agreement with Yingxi Industrial Chain Investment Co., Ltd., Riches Family Office

Limited, Riches FO Holdings Limited and Mr.

Wu Rui, the Company’s Chief Operating Officer and sole shareholder of Riches FO Holdings

to the agreement, Yingxi HK agreed to acquire 41.67 %

of the issued and outstanding equity interests of Riches Family Office Limited from Riches FO Holdings Limited in exchange for the

issuance by the Company of 33,500

shares of Common Stock to Mr.

The transaction constitutes a related-party transaction and was approved by the Audit

Committee and the Board of Directors on May 15, 2026.

Company had the following related party balances at the end of the years:

3 unchanged sentences

Bihua Yang (2)

Riches affiliated companies

Amount due from related

1 unchanged sentence

Hongye Financial Consulting (Shenzhen) Co., Ltd.

Dewu Huang (3)

Jinlong Huang

Riches’ affiliated companies

Keemo’s related parties

Related party borrowings

increase of related party from Hong Zhida was short term loan to Hong Zhida, which is interest free and would be repaid in one year.

increase of related party debt from Yang Bihua was mainly due to the cash paid in advance to Yang Bihua.

During year ended March

31, 2025, the Company received financial support of approximately $ 0.8 million from Yang Bihua and provided a short term loan of

approximately $ 1.3 million to Yang Bihua.

Company received financial support from Huang Dewu to fund company’s daily operation.

The decrease is because YBY was disposed

of in August 2024.

decrease of related party debt from Yang Bihua was mainly due to repayment from Yang Bihua.

borrowing balances of related parties are unsecured, non-interest bearing and repayable on demand.

9 unchanged sentences

and (iii) any conversion of the convertible

During the year ended March 31, 2026, substantially all of the restricted cash was released following the occurrence

of contractual release events, primarily in connection with the conversion and settlement of the Company’s outstanding convertible notes.

Accordingly, restricted cash decreased from $ 2,750,000 as of March 31, 2025 to $ 10,756 as of March 31, 2026.

The release of approximately

$ 2.7 million of restricted cash is presented as a financing cash inflow in the accompanying consolidated statements of cash flows.

DEBT SECURITIES HELD-TO-MATURITY

3 unchanged sentences

Debt securities held-to-maturity

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

The principal amount of the note is $ 17,500,000 .

The note is renewable with one-year tenor on August 23, 2023 and 2.5 %

As of March 31, 2025 and 2024, the coupon receivable is $ 437,500

and $ 437,500 ,

respectively.

On August 23, 2024, the Company entered into an agreement to transfer the principal and coupon receivable to a third party.

The debt is guaranteed by Hongye Financial Consulting (Shenzhen) Co., Ltd., the company controlled by our CEO, Mr.

Company purchased a note issued by a third-party investment company on August 24, 2022 with a principal amount of $ 17.5 million.

The note bears interest at 2.5 %

per annum and is renewable on an annual basis.

The debt is guaranteed by Hongye Financial Consulting (Shenzhen) Co., Ltd., a company

controlled by the Company’s CEO, Mr.

of March 31, 2026 and 2025, accrued coupon interest receivable amounted to $ 437,500 and $ 437,500 , respectively.

March 30, 2026, the Company completed the acquisition of 62.18 % of the outstanding ordinary shares of Keemo Fashion Group Limited (“Keemo

Fashion”) (Note 5).

As consideration for the acquisition, the Company transferred a portion of the note with a principal amount

of approximately $ 5.5 million to the seller.

Following the transfer, the remaining principal balance of the debt security held by the

Company was $ 12.0 million as of March 31, 2026.

consist of the following as of March 31, 2026 and 2025:

4 unchanged sentences

ADVANCES TO SUPPLIERS

Company has made advances to third-party suppliers in advance of receiving inventory parts.

These advances are generally made to expedite

the delivery of required inventory when needed and to help to ensure priority and preferential pricing on such inventory.

advanced to suppliers are fully refundable on demand.

Company reviews a supplier’s credit history and background information before advancing a payment.

If the financial condition of

its suppliers were to deteriorate, resulting in an impairment of their ability to deliver goods or provide services, the Company would

recognize bad debt expense in the period they are considered unlikely to be collected.

PREPAYMENTS AND OTHER RECEIVABLES

Company makes advances to third-party suppliers and service providers in the ordinary course of business.

advances primarily relate to deposits and prepayments made in connection with logistics and transportation services, as well as advances

for the procurement of inventory used in the garment trading business.

Such advances are made to secure service capacity, facilitate the

timely provision of services or delivery of goods, and in certain cases to obtain favorable commercial terms.

The Company evaluates the creditworthiness and financial condition of its suppliers and service providers before

making advance payments.

If the Company determines that the recoverability of any advance becomes doubtful due to a supplier’s inability

to fulfill its contractual obligations or repay the advance, an allowance for expected credit losses is recognized in accordance with

the Company’s accounting policy.

PREPAYMENTS, DEPOSITS AND OTHER RECEIVABLES

Prepayments, deposits

and other receivables consist of the following as of March 31, 2026 and 2025:

OF PREPAYMENTS AND OTHER RECEIVABLES

OF PREPAYMENTS DEPOSITS AND OTHER RECEIVABLES

Receivable of consideration on disposal of subsidiaries

Coupon receivable of matured debt security (Note)

Coupon receivable of matured debt security (Note a)

Loan to third party (Note b)

Other receivables

and other receivables

The coupon receivable of the debt security held-to-maturity was transferred together with the principal to a third party.

It is guaranteed

The coupon receivable represents accrued interest income arising from the debt security held-to-maturity.

The debt security is guaranteed

by Hongye Financial Consulting (Shenzhen) Co., Ltd., a company controlled by our CEO, Mr.

Hong Zhida (Note 8).

The Company entered into a loan agreement with an independent third party in September 2022.

The principal amount

of the loan to the borrower is $ 2.5

The loan is interest-free and the maturity date has been extended to August 2026 .

PLANT AND EQUIPMENT

8 unchanged sentences

expense for the years ended March 31, 2026 and 2025 was $ 77,728 and $ 119,187 , respectively.

LONG-TERM RECEIVABLES

Company entered into a long-term loan agreement with an independent third party in September 2022.

The principal to the borrower is $ 2.5

The loan is interest free and will be expired in August 2025 .

It was reclassified to Other Receivables at March 31, 2025.

SHORT-TERM BANK LOAN

3 unchanged sentences

As of March 31, 2026, the Company has borrowed $ 136,593 (RMB 944,255 ) (March 31, 2025:

$ 130,779 , or RMB 944,255 ) under this line

$ 130,051 (RMB 944,255 )) under this line

of credit with various annual interest rates from 4.34 % to 4.9 %.

3 unchanged sentences

and interest payable.

February 2023, XKJ entered into a facility agreement with China Construction Bank and obtained a line of revolving credit, which allows

the Company to borrow up to approximately $ 1,239,561 (RMB 9,000,000 ) for daily operations, with Loan Prime Rate of the day prior to the

draw down day.

As of March 31, 2025, the Company has borrowed $ 406,300 (RMB 2,950,000 ) (March 31, 2024:

$ 110,799 ) under this line of credit

with annual interest rate of 3.9 %.

The revolving credit facility will be expired on February 1, 2026.

December 2023, PF entered into a facility agreement with Sichuan Xinwang Bank Co., Ltd.

and obtained a line of credit, which allows the

Company to borrow up to approximately $ 68,864 (RMB 500,000 ) for daily operations.

February 2023, XKJ entered into a facility agreement with China Construction Bank and obtained a line of revolving credit, which

allows the Company to borrow up to approximately $ 1,301,914

(RMB 9,000,000 )

for daily operations, with Loan Prime Rate of the day prior to the draw down day.

As of March 31, 2026, the Company has borrowed

(RMB 187,500 ) (March 31, 2024:

(RMB 3,700,000 )

(March 31, 2025:

(RMB2,950,000)) under this line of credit with annual interest rate of 3.9 %.

The loan facility will be expired

on December 26, 2025 .

The revolving credit facility was renewed in November 2025 and the new expiration date will be November

December 2023, PF entered into a facility agreement with Sichuan Xinwang Bank Co., Ltd.

and obtained a line of credit, which allows the

Company to borrow up to approximately $ 72,329 (RMB 500,000 ) for daily operations with annual interest rate of 6.72 %, to be expired on

December 26, 2025 .

The Company has fully repaid this loan facility in September 2025.

As of March 31, 2026, the outstanding balance of

this loan facility was Nil (March 31, 2025:

$ 25,824 (RMB 187,500 )).

March 2024, PF entered into a new facility agreement with WeBank Co., Ltd.

and obtained a line of credit, which allows the Company to

borrow up to approximately $ 137,729 (RMB 1,000,000 ) for daily operations.

As of March 31, 2025, the Company has borrowed $ 78,702 (RMB 571,429 )

and obtained a line of credit, which allows the Company

to borrow up to approximately $ 144,657

(RMB 1,000,000 )

for daily operations, with annual interest rate of 8.244 %.

The loan facility was expired on March

The Company has fully repaid this loan facility when expired.

As of March 31, 2026, the outstanding balance of this

loan facility was Nil

(March 31, 2025:

$ 138,500 ) under this line of credit with annual interest rate of 8.244 %.

The loan facility will be expired on March

(RMB 571,429 )).

Income Tax (“EIT”)

Company 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 the British Virgin Islands,

is not subject to income taxes.

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

The Company operates in multiple jurisdictions, including the People’s Republic of China (“PRC”), Hong

Kong, Seychelles and the United States, and is subject to the applicable tax laws in those jurisdictions.

Yingxi Seychelles was incorporated in the Republic of Seychelles and, under the current laws of Seychelles, is not subject

to income taxes.

Yingxi HK is subject to Hong Kong Profits Tax.

Under the two-tiered profits tax regime, the first HK$ 2 million

of assessable profits is taxed at 8.25 %, with the remaining assessable profits taxed at 16.5 %.

No provision for income taxes

in Hong Kong has been made as Yingxi HK had no taxable income for the years ended March 31, 2026 and 2025.

were incorporated in the PRC and is subject to an EIT tax rate of 25 %.

was incorporated in the PRC and is subject to an EIT tax rate of 25 %.

No provision for income taxes in the PRC has been made as YX had

no taxable income for the years ended March 31, 2026 and 2025.

Yingxi’s operating companies were governed by the Income Tax Laws of the PRC and subject to progressive EIT rates from 5 % to 15 %

in 2025 and 2024.

The preferential tax rate will be expired at end of year 2025 and the EIT rate will be 25% from year 2025.

of the PRC companies were $ 4,649 and $ 11,605 for the year ended March 31, 2025 and 2024, respectively.

Company’s parent entity, Addentax Group Corp.

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

Company’s PRC operating subsidiaries are subject to the EIT Law of the PRC.

The applicable statutory EIT rate is 25 %.

Income taxes of the PRC subsidiaries were $ 4,106

for the years ended March 31, 2026 and 2025, respectively.

Company’s parent entity, Addentax Group Corp., is a U.S.

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

for income taxes in the United States has been made as Addentax Group Corp.

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31, 2026 and 2025.

reconciliation of income taxes computed at the PRC federal statutory tax rate applicable to the PRC, to income tax expenses are as follows:

SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION

The reconciliation of income taxes computed at the applicable PRC statutory enterprise income tax rate to income

tax expense is as follows:

OF EFFECTIVE INCOME TAX RATE RECONCILIATION

PRC statutory tax rate

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Temporary differences

Permanent difference

Permanent differences

Changes in valuation allowance

Reported income tax expense

of March 31, 2025, the accumulated tax losses in China amounting to $ 2.5 million (2024:

Reported income tax expenses

of March 31, 2026, the accumulated tax losses in China amounting to $ 1.7

million (2025:

million) will expire in five years.

March 31, 2025, the accumulated net operating loss carried forward in the US entity was $ 10.5 million (2024:

As of March 31, 2026, the accumulated net operating loss carried forward in the US entity was

million (2025:

tax assets had not been recognized in respect of any potential tax benefit that may be derived from non-capital loss carry forward and

property and equipment due to past negative evidence of previous cumulative net losses and uncertainty upon restructuring.

tax assets have not been recognized in respect of any potential tax benefit that may be derived from net operating loss carryforwards and temporary differences related to property and equipment due to past negative evidence of previous cumulative net losses and uncertainty upon restructuring.

The management

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Added Tax (“VAT”)

accordance with the relevant taxation laws in the PRC, the normal VAT rate for domestic sales is 13 %, which is levied on the invoiced

value of sales and is payable by the purchaser.

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

Companies are

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

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

the VAT due on sales.

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

VAT rate of 3 % in 2025 and 2024.

accordance with the relevant taxation laws in the PRC, the normal VAT rate for domestic sales is 13 %,

which is levied on the invoiced value of sales and is payable by the purchaser.

Companies are required to remit the VAT they collect

to the tax authority.

A credit is available whereby VAT paid on purchases can be used to offset the VAT due on sales.

services, the applicable VAT rate is 9 % under the applicable VAT category for logistics companies, except for PF Branch, which was entitled to a preferential VAT rate of 3 % during the years ended March 31, 2026 and 2025.

The Company is required to pay the full amount of VAT calculated at the applicable VAT rate of the invoiced

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service income.

Company’s consulting service is conducted through Yingxi HK, the Company’s Hong Kong subsidiary.

Hong Kong does not impose

value-added tax, goods and services tax or sales tax.

Accordingly, the consulting service conducted through Yingxi HK is not subject

to VAT in Hong Kong.

CONSOLIDATED SEGMENT DATA

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Providing logistic services;

management and subleasing.

Providing shops subleasing and property management services for garment wholesalers and retailers

in garment market.

Providing consulting and advisory services, including insurance consulting and related

customer service support.

property management and subleasing business was disposed of during the year and was not included as a continuing operating segment in

the current year segment assessment.

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

1 unchanged sentence

OF SEGMENT REPORTING FOR REVENUE

Revenues from external customers

Year ended March 31,

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Total of reportable segments

$ ( 806,003 )

Corporate and other

( 1,449,880 )

( 1,010,967 )

Total consolidated loss from operations

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( 1,816,970 )

and amortization by segment for year ended March 31, 2025 and 2024 are as follows:

by segment for year ended March 31, 2026 and 2025 are as follows:

OF SEGMENT REPORTING FOR DEPRECIATION AND AMORTIZATION

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Year ended March 31,

Mainland China

March 31, 2026

1 unchanged sentence

Long-Lived Assets

Mainland China

Long-Lived Assets

ACCRUED EXPENSES AND OTHER PAYABLES

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As of March 31, 2026, the balance of the Warrant was approximately $ 4.1 million.

(March 31, 2025:

$ 1.0 million)

Convertible Note is classified as a liability and is subsequently stated at amortized cost with any difference between the initial carrying

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feature was $ 1.2 million.

As of March 31, 2025, the fair value of the conversion option was $ 1.4 million.

As of March 31, 2026, the fair value of the conversion option was $ Nil (March 31, 2025:

$ 1.4 million).

Company determined that the other embedded features do not require bifurcation as they either are clearly and closely related to the

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( 3,054,240 )

( 5,687,055 )

Amortization of debt discount

Deferred debt discount and cost of issuance

( 2,231,363 )

Interest charge

Carrying value – ending balance

the year ended March 31 2025 and 2024, approximately $ 82,642 and 5.2 of the convertible notes was converted into approximately 132,994

and 3.7 Common Stock, with average effective conversion price of $ 0.6214 and $ 1.4044 per share, respectively.

July 13, 2023, the Company entered into a Waiver and Ratification Agreement with one of the holders of the Convertible Note.

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No other provision of the Note was amended and the Note continues in full force and effect.

the year ended March 31 2026 and 2025, approximately $ 3.1 million and $ 82,642 of the convertible notes was converted into

approximately 5.7 million and 132,994 Common Stock, with average effective conversion price of $ 0.5327 and $ 0.6214 per share, respectively.

As at March 31, 2026, the Convertible Note was fully redeemed or converted.

Company’s derivative liabilities were as the following for the year ended March 31, 2026 and 2025:

OF DERIVATIVE LIABILITIES

SCHEDULE OF DERIVATIVE LIABILITIES

Year ended March 31,

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Marked to the market

( 1,761,604 )

Ending fair value

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Converted to Common Stock

Remeasurement on change of convertible price

( 1,589,352 )

Remeasurement on change of convertible price

Marked to the market

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asset and lease liabilities

Company implemented a new accounting policy according to the ASC 842, Leases, on April 1, 2019 on a modified retrospective basis and

did not restate comparative periods.

Under the new policy, the Company recognized approximately $ 0.06 million lease liability as well

as right-of-use asset for all leases (with the exception of short-term leases) at the commencement date.

Lease liabilities are measured

at present value of the sum of remaining rental payments as of March 31, 2025, with discounted rate of 4.9 %.

A single lease cost is recognized

over the lease term on a generally straight-line basis.

All cash payments of operating lease cost are classified within operating activities

in the statement of cash flows.

Company leases its head office.

The lease period is 5 years with an option to extend the lease.

The Company leases its plant and dormitory

for 4.5 years with an option to extend the lease.

The Company leased several floors in a commercial building for its sublease and property

management services business for 16 years with an option to extend the lease.

Company implemented ASC 842, Leases, on April 1, 2019 using the modified retrospective approach and did not restate comparative periods.

Under ASC 842, lease liabilities are recognized at the present value of future lease payments, with a corresponding right-of-use asset

recognized for leases other than short-term leases.

A single lease cost is recognized over the lease term on a generally straight-line

Cash payments for operating leases are classified as operating activities in the consolidated statements of cash flows.

to the disposal of HX on July 1, 2025, the Company leased its head office, plant, and dormitory under operating lease arrangements.

Company also leased several floors in a commercial building for its subleasing and property management services business.

Certain leases

included options to extend the lease term.

following table summarizes the components of lease expense:

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Weighted average discount rate - Operating leases

following table summarizes the maturity of operating lease liabilities:

SCHEDULE OF MATURITY OF OPERATING LEASE

Years ending March 31

2030 and there after

Total lease payments

( 9,706,848 )

Company subleased its leased commercial building by entering into operating leases to third party garment wholesalers and retailers.

These leases are negotiated for terms ranging from one to five years.

All leases include the term to enable upward revision of the rental

charge on an annual basis according to prevailing market conditions.

income form from subleasing is disclosed in Note 16 segment data.

future minimum rental receivable under non-cancellable operating leases contracted for the reporting period are as follows:

OF FUTURE MINIMUM RENT RECEIVABLE

Years ending March 31

2030 and there after

a result of the disposal of HX on July 1, 2025, the Company had no operating lease liabilities as of March 31, 2026.

to the disposal of HX on July 1, 2025, the Company subleased its leased commercial building to third-party garment wholesalers and retailers

under operating lease arrangements.

These leases were negotiated for terms ranging from one to five years and generally included provisions

for annual rental adjustments based on prevailing market conditions.

income from subleasing is disclosed in Note 15, Segment Data.

the disposal of HX on July 1, 2025, the Company no longer generates rental income from subleasing activities.

SHARE CAPITAL AND RESERVE

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February 3, 2023, 3,370,000 shares were issued as pre-delivery shares to the placement agents.

January 2023, the Company increased its authorized share capital and the authorized share capital is US$ 250,000 divided into 250,000,000

Common Stock with par value of US$ 0.001 per share.

Company effected the amendment and combination to the outstanding shares of its common stock into a lesser number of outstanding shares

(the “Reverse Stock Split Amendment”) on a ratio of one-for-ten, with effected date on June 26, 2023.

Through the reversed

split, the number of shares was reduced by 33,655,839 shares.

the reversed split, the Company issued 1,644,188 Common Stock with par value of US$ 0.001 per share.

January 2023, the Company increased its authorized share capital to 250,000,000 shares

of common stock with a par value of $ 0.001 per

On June 26, 2023, the Company effected a 1-for-10 reverse stock split of its outstanding common stock.

the number of issued and outstanding shares was reduced by 33,655,839 shares.

the reverse stock split, the Company issued 1,644,188

shares of common stock with a par value of $ 0.001

April 29, 2024, the Company entered into two Private Placement Agreements (the “Agreement”) with certain individual investors

(the “Investors”) who are independent third parties, pursuant to which the Company issued to each of the investor 330,000

(the “Investors”) who are independent third parties, pursuant to which the Company issued to each of the investors 330,000

shares of its common stock, par value $ 0.001 per share, at a price of $ 0.98 per share (the “Common Stock”), resulting in

2 unchanged sentences

of 660,000 unregistered shares of common stock to the Investors.

were 6,043,769 and 5,383,769 Common Stock issued and outstanding at March 31, 2025 and 2024, respectively.

August 11, 2025, the Company issued and granted 161,665 shares of Common Stock to directors and executive officers pursuant to the Company’s

2024 Equity Incentive Plan.

These incentive shares vested immediately.

The stock-based compensation expense recognized in connection

with these shares was $ 70,001 .

March 30, 2026, the Company effected a reverse stock split of its outstanding shares of common stock at a ratio of one-for-fifteen.

a result of the reverse stock split, every fifteen shares of common stock outstanding immediately prior to the effective time were reclassified

and combined into one share of common stock, without any change in the par value of $ 0.001 per share or the total number of authorized

No fractional shares were issued in connection with the reverse stock split, and stockholders who would otherwise have been entitled

to receive a fractional share received one whole share of common stock in lieu of such fractional share.

In accordance with ASC 260-10-55-12, all share and per share amounts for all periods presented in the accompanying

consolidated financial statements, including the consolidated statements of changes in stockholders’ equity, have been retroactively

adjusted to reflect the reverse stock split for comparative purposes.

Specifically, the number of shares of common stock outstanding at

the beginning and end of each period, as well as all share issuances and repurchases occurring during the periods presented in the prior

year’s statement of changes in stockholders’ equity, have been restated to reflect the reduced number of shares outstanding as if the

reverse stock split had occurred at the beginning of the earliest period presented.

All share counts, weighted-average shares outstanding, basic and diluted net loss per share, share-based awards,

warrants, convertible preferred stock conversion amounts and other share-related information for all periods presented in these consolidated

financial statements have been retrospectively adjusted to reflect the reverse stock split and to maintain period-to-period comparability.

The reverse stock split did not affect the Company’s total stockholders’ equity.

were 781,256 and 402,918 shares of common stock issued and outstanding as of March 31, 2026 and 2025, respectively, after giving retrospective

effect to the reverse stock split.

accordance with the relevant laws and regulations of the PRC, the subsidiary of the Company established in the PRC is required to transfer

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to the shareholders .

The amount appropriated to statutory reserve for the years ended March 31, 2025 and 2024 were $ 402 and $ 8,563 , respectively.

The balance of paid-up statutory reserve was $ 37,422 and $ 37,020 as of March 31, 2025 and 2024, respectively.

The amount appropriated to statutory reserve for the years ended March 31, 2026 and 2025 were $ Nil and

$ 402 , respectively.

The balance of paid-up statutory reserve was $ 37,422 as of both March 31, 2026 and 2025.

OTHER INCOME (EXPENSES), NET

4 unchanged sentences

Loss on disposal of subsidiary

Gain on bargain purchase

Penalty income from customers’ defaults

Subsidy from government

$ ( 307,577 )

RISKS AND UNCERTAINTIES

18 unchanged sentences

at March 31, 2026 and March 31, 2025, respectively.

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

are 7.22 and 7.15 for the two years ended March 31, 2025 and 2024, respectively.

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

7.10 and 7.22 for the two years ended March 31, 2026 and 2025, respectively.

The equity is translated at historical exchange rates.

Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustments to

other comprehensive loss, a component of equity.

translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustments to other

comprehensive loss, a component of equity.

Concentration

9 unchanged sentences

March 31, 2025

Consulting services segment

March 31, 2026

March 31, 2025

The Company did not generate consulting

service revenue during the year ended March 31, 2025 and had no accounts receivable for the consulting service segment as of March 31,

management and subleasing

is no account receivable for Property management and subleasing segment as for March 31, 2025.

the year ended March 31, 2025, two customers from logistics services segment provided more than 10 % of total consolidated revenue of

the Company, representing 31.0 % of total revenue of the Company.

was no account receivable for Property management and subleasing segment as of March 31, 2026 and 2025.

Concentration

For the year ended March 31, 2026, four customers accounted for more than 10% of total consolidated revenue of

the Company, representing approximately 21.0 %, 13.7 %, 12.4 % and 10.6 % of total consolidated revenue, respectively.

These customers were

from the consulting service segment and logistics services segment.

For the year ended March 31, 2025, two customers accounted for more

than 10% of total consolidated revenue of the Company, representing approximately 15.9 % and 15.5 % of total consolidated revenue, respectively.

Concentration

following tables summarized the percentages of purchases from five largest suppliers of each of the reportable segment purchase for the

5 unchanged sentences

Property management and subleasing

supplier provided more than 10% of our raw materials purchases for the years ended March 31, 2025 and 2024.

Consulting service segment

and Nil suppliers provided more than 10% of our raw materials purchases for the years ended March 31, 2026 and 2025, respectively.

suppliers provided more than 10% of purchases of our logistics services segment for the years ended March 31, 2026 and 2025.

Two suppliers

provided more than 10% of services purchases of our Consulting service segment for the year ended March 31, 2026.

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

5 unchanged sentences

SUBSEQUENT EVENTS

Company received a letter dated April 9, 2025 from the Listings Qualifications Department (the “Staff”) of The Nasdaq Stock

Market LLC (“Nasdaq”) notifying the Company that the minimum bid price per share of its common stock was below $ 1.00 for

a period of 30 consecutive business days and that the Company did not meet the minimum bid price requirement set forth in Nasdaq Listing

Rule 5550(a)(2) (the “Minimum Bid Price Rule”).

The Nasdaq letter does not result in the immediate delisting of the Company’s

shares of common stock, and the shares will continue to trade uninterrupted under the symbol “ATXG.”

to Nasdaq Listing Rule 5810(c)(3)(A), the Company has a compliance period of one hundred eighty (180) calendar days, or until October

6, 2025 (the “Compliance Period”), to regain compliance with the Minimum Bid Price Rule.

If at any time during the Compliance

Period, the closing bid price per share of the Company’s common stock is at least $ 1.00 for a minimum of ten (10) consecutive business

days, Nasdaq will provide the Company a written confirmation of compliance and the matter will be closed.

the event the Company does not regain compliance by the end of the Compliance Period, the Company may be eligible for an additional 180

calendar day grace period.

To qualify, the Company will be required to meet the continued listing requirement for market value of publicly

held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the bid price requirement, and

will need to provide written notice of its intention to cure the deficiency during the second compliance period, including by effecting

a reverse stock split, if necessary.

If the Company chooses to implement a reverse stock split, it must complete the split no later than

ten (10) business days prior to the end of the Compliance Period, or the end of the second compliance period if granted.

May 2025, the Company disposed of the subsidiary ATO to a related party with a loss of approximately $ 8,604 .

are no other subsequent events have occurred that would require recognition or disclosure in the financial statements.

Company evaluated subsequent events through June 29, 2026 , the date on which the consolidated financial statements were available

to be issued.

Incentive Awards

March 24, 2026, the Compensation Committee approved fully vested share awards under the Company’s 2024 Equity Incentive Plan to

certain executive officers.

The grant date for the awards was April 8, 2026, and the awards were fully vested and non-forfeitable as

of such date.

After giving effect to the Company’s one-for-fifteen reverse stock split that became effective on March 30, 2026,

the awards consisted of 66,667 shares of Common Stock to Wu Rui, the Company’s Chief Operating Officer, and 12,222 shares of Common

Stock to Hong Zhida, the Company’s President, Chief Executive Officer, Secretary and Director.

of Time Is Loan Limited

On April 22, 2026, Yingxi Industrial Chain Investment Co., Ltd.

(“Yingxi HK”), the Company’s wholly

owned Hong Kong subsidiary, entered into a Share Exchange Agreement with the sole shareholder of Time Is Loan Limited (“Time Is Loan”),

a Hong Kong company, to acquire 100 % of the equity interests in Time Is Loan.

As consideration, the Company agreed to issue 137,790 shares of its common stock to the seller.

On May 15, 2026, the acquisition was completed.

As of the date these consolidated financial statements were available

to be issued, the Company is evaluating the accounting impact of the acquisition, and accordingly, the financial effects of the acquisition

have not yet been determined.

Party Share Exchange Agreement

May 15, 2026, the Company entered into a Share Exchange Agreement with Yingxi Industrial Chain Investment Co., Ltd., Riches Family Office

Limited, Riches FO Holdings Limited and Wu Rui, the Company’s Chief Operating Officer and the sole shareholder of Riches FO Holdings

Pursuant to the agreement, Yingxi Industrial Chain Investment Co., Ltd.

agreed to acquire 41.67 % of the issued and outstanding

equity interests of Riches Family Office Limited from Riches FO Holdings Limited in exchange for the issuance of 33,500 shares of the

Company’s common stock to Wu Rui.

The transaction is a related party transaction and was completed on June 15, 2026.

Subsequent Events

as disclosed above, management is not aware of any other subsequent events that would require recognition or disclosure in the consolidated

financial statements.

Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

March 25, 2026, the Company dismissed its former independent registered public accounting firm and engaged HML PLT as its new independent

registered public accounting firm.

The change in accountants was previously reported in the Company’s Current Report on Form 8-K

filed with the SEC on March 25, 2026.

As disclosed in such Form 8-K, there were no disagreements with the former independent registered

public accounting firm on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure,

nor were there any reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.

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 8. Financial Statements and Supplementary Data