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Item 1. Financial Statements

2025-08-14 compared with 2025-02-14 · 324 added, 350 removed, 347 unchanged (66% of the section changed)

Financial Statements and Supplementary Data

the three and nine months ended December 31, 2024 and 2023

Condensed Consolidated Balance sheets as of December 31, 2024 (unaudited) and March 31, 2024 (audited)

Condensed Consolidated Statements of Income and Comprehensive Income for the three and nine months ended December 31, 2024 and 2023 (unaudited)

Condensed Consolidated Statements of Changes in Equity for the three and nine months ended December 31, 2024 and 2023 (unaudited)

Condensed Consolidated Statements of Cash Flows for the nine months ended December 31, 2024 and 2023 (unaudited)

Notes to Condensed Consolidated Financial Statements for the three and nine months ended December 31, 2024 and 2023 (unaudited)

Financial Statements.

the three months ended June 30, 2025 and 2024

Condensed Consolidated Balance sheets as of June 30, 2025 and March 31, 2025 (unaudited)

Condensed Consolidated Statements of Income and Comprehensive Income for the three months ended June 30, 2025 and 2024 (unaudited)

Condensed Consolidated Statements of Changes in Equity for the three months ended June 30, 2025 and 2024 (unaudited)

Condensed Consolidated Statements of Cash Flows for the three months ended June 30, 2025 and 2024 (unaudited)

Notes to Condensed Consolidated Financial Statements for the three months ended June 30, 2025 and 2024 (unaudited)

AND SUBSIDIARIES

1 unchanged sentence

Dollars, except share data or otherwise stated)

June 30, 2025

March 31, 2025

CURRENT ASSETS

5 unchanged sentences

Advances to suppliers

Amount due from related

Amount due from related party

Total current assets

3 unchanged sentences

Long-term prepayments

Long-term receivables

Total non-current assets

LIABILITIES AND EQUITY

CURRENT LIABILITIES

4 unchanged sentences

Accrued expenses and other payables

Operating lease liability

current portion

Operating lease liability current portion

Total current liabilities

4 unchanged sentences

Total non-current liabilities

Common stock ($ 0.001 par value, 250,000,000

shares authorized, 6,043,769 and 5,383,769 shares issued and outstanding at December 31 and March 31, 2024, respectively)

TOTAL LIABILITIES

Common stock ($ 0.001 par value, 250,000,000 shares authorized, 10,090,963 and 6,043,769 shares issued and outstanding at June 30 and March 31, 2025, respectively)

Additional paid-in capital

3 unchanged sentences

Statutory reserve

Accumulated other comprehensive

LIABILITIES AND EQUITY

Accumulated other comprehensive loss

TOTAL LIABILITIES AND EQUITY

accompanying notes to the unaudited condensed consolidated financial statements.

2 unchanged sentences

Dollars, except share data or otherwise stated)

Three months ended

COST OF REVENUES

( 1,306,169 )

( 2,637,818 )

( 3,054,193 )

OPERATING EXPENSES

Selling and marketing

and administrative

( 1,471,534 )

( 1,685,063 )

operating expenses

( 1,745,191 )

( 1,817,596 )

(LOSS) FROM OPERATIONS

( 1,131,136 )

( 1,015,473 )

General and administrative

Total operating expenses

(LOSS) INCOME FROM OPERATIONS

Fair value gain or loss

( 1,738,593 )

( 1,045,448 )

Interest income

Interest expenses

( 1,030,725 )

( 2,426,064 )

Other income, net

(LOSS) INCOME BEFORE INCOME

( 1,082,605 )

( 2,604,437 )

( 3,023,702 )

Other income (expense), net

(LOSS) INCOME BEFORE INCOME TAX EXPENSE

( 1,220,627 )

2 unchanged sentences

( 1,221,111 )

( 2,607,662 )

( 3,028,364 )

( 3,973,983 )

currency translation gain

COMPREHENSIVE INCOME (LOSS)

$ ( 978,156 )

$ ( 2,648,928 )

Foreign currency translation gain (loss)

TOTAL COMPREHENSIVE (LOSS) INCOME

$ ( 434,474 )

$ ( 1,206,701 )

EARNINGS PER SHARE

Weighted average number

of shares outstanding – Basic and diluted

EARNINGS (LOSS) PER SHARE

Net Loss per share – basic and diluted

Weighted average number of shares outstanding – Basic and diluted

accompanying notes to the unaudited condensed consolidated financial statements.

5 unchanged sentences

comprehensive

BALANCE AT OCTOBER 1, 2023

$ ( 6,817,530 )

Additional paid-in capital from conversion of convertible debts

Appropriation to Statutory Reserves

Foreign currency translation

Net income for the period

( 2,607,662 )

BALANCE AT DECEMBER 31, 2023

$ ( 9,433,762 )

BALANCE AT OCTOBER 1, 2024

$ ( 10,511,833 )

Appropriation to Statutory Reserves

Foreign currency translation

Net income for the period

( 1,085,721 )

BALANCE AT DECEMBER 31, 2024

$ ( 11,598,216 )

BALANCE AT APRIL 1, 2023

$ ( 5,451,209 )

Issuance of new shares before reversed split

Reverse stock split

BALANCE AT MARCH 31, 2024

$ ( 8,569,190 )

New shares for round up of fragmental shares

Issuance of new shares after reversed split

Additional paid-in capital from conversion of convertible debts

Appropriation to Statutory Reserves

Issuance of new shares

Foreign currency translation

2 unchanged sentences

( 1,221,111 )

BALANCE AT DECEMBER 31, 2023

BALANCE AT JUNE 30, 2024

$ ( 9,790,301 )

BALANCE AT APRIL 1, 2024

BALANCE AT MARCH 31, 2025

$ ( 13,663,790 )

2 unchanged sentences

Additional paid-in capital from conversion of convertible debts

Appropriation to Statutory Reserves

Adjustment of Statutory reserve

Foreign currency translation

Net income for the period

( 3,028,364 )

BALANCE AT DECEMBER 31, 2024

BALANCE AT JUNE 30, 2025

$ ( 14,056,228 )

4 unchanged sentences

Dollars, except share data or otherwise stated)

Months Ended December 31

CASH FLOWS FROM OPERATING

Three Months Ended June 30

CASH FLOWS FROM OPERATING ACTIVITIES:

$ ( 392,438 )

$ ( 1,221,111 )

Adjustments to reconcile net income (loss)

to net cash used in operating activities:

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Non-cash financial cost

1 unchanged sentence

Fair value gain or loss

Loss on debts extinguishment

Gain on bargain purchase

Loss from sale of property

and equipment

Loss on disposal of subsidiary

Loss from sale of property and equipment

Loss on disposal of subsidiaries

Changes in operating assets and liabilities

3 unchanged sentences

Accounts payables

Accrued expenses and other

from customers

Net cash provided by (used in) operating activities

Accrued expenses and other payables

Advances from customers

Net cash used in operating activities

$ ( 306,075 )

CASH FLOWS FROM INVESTING

Purchase of property and equipment and intangible

Cash from acquired investee

Cash decreased in disposal

of subsidiary

Net cash used in investing activities

$ ( 193,185 )

CASH FLOWS FROM FINANCING

Proceeds from bank borrowings

Repayment of bank borrowings

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property and equipment and intangible assets

Cash decreased in disposal of subsidiaries

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from related party borrowings

Repayment of related party borrowings

( 5,341,671 )

Proceeds from bank borrowings

Repayment of bank borrowings

Cash advance to related parties

( 1,194,987 )

( 1,148,824 )

Repayment from related parties

Proceeds from issue of ordinary shares

Release of restricted cash

Redemption of convertible debt

Proceeds from issue of

ordinary shares

Net cash provided by (used in) financing activities

$ ( 986,341 )

NET INCREASE (DECREASE)

IN CASH AND RESTRICTED CASH

Effect of exchange rate changes on cash and

cash equivalents

Cash and restricted cash,

beginning of the period

AND RESTRICTED CASH, END OF THE PERIOD

Supplemental disclosure

of cash flow information:

Net cash provided by financing activities

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

Effect of exchange rate changes on cash and cash equivalents

Cash and cash equivalents, beginning of the period

CASH AND CASH EQUIVALENTS, END OF THE PERIOD

Supplemental disclosure of cash flow information:

Cash paid during the period for interest

Cash paid during the period 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 unaudited condensed consolidated financial statements.

2 unchanged sentences

ORGANIZATION AND BUSINESS ACQUISITIONS

and its subsidiaries (the “Company”) are engaged in the business of garments manufacturing, providing logistic services,

property leasing and management service in the People’s Republic of China (“PRC” or “China”).

and its subsidiaries (“ATXG” or the “Company”) are engaged in the business of garment manufacturing, providing logistic services, property leasing and management services in the People’s Republic of China

(“PRC” or “China”).

BASIS OF PRESENTATION

13 unchanged sentences

in the Company’s Annual Report on Form 10-K for the year ended March 31, 2025 filed with the Securities and Exchange Commission

(“SEC”) on July 15, 2024 (“2023 Form 10-K”).

(“SEC”) on June 30 2025 (“2024 Form 10-K”).

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 unchanged sentences

however actual results could differ materially from those estimates.

is no change in the accounting policies for the nine months ended December 31, 2024.

is no change in the accounting policies for the three months ended June 30, 2025.

issued accounting pronouncements

18 unchanged sentences

DISPOSITION OF SUBSIDIARIES

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

garment manufacturing segment at end of August 2024 to the local management of YBY.

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

other subsidiaries.

The disposition of YBY did not qualify as discontinued operations.

May 2025, the Company disposed of Dongguan Aotesi Garments Co., Ltd., (“AOT”).

The Company will carry on the garment manufacturing

segment business through other subsidiaries.

The disposition of AOT did not qualify as discontinued operations.

position of the entities at disposal date and gain or loss on disposal:

1 unchanged sentence

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

position of YBY

position of AOT

date of disposal

Current assets

Noncurrent assets

Current liabilities

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.

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

RELATED PARTY TRANSACTIONS

OF RELATED PARTIES RELATIONSHIP WITH COMPANY

SCHEDULE OF RELATED PARTIES RELATIONSHIP WITH COMPANY

of Related Parties

3 unchanged sentences

company controlled by CEO, Mr.

legal representative of XKJ

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

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

legal representative of Shenzhen Xin Kuai Jie Transportation (“ XKJ”)

of Dongguan Heng Sheng Wei Garments Co., Ltd (“ HSW”)

Company leases XKJ’s office rent-free from Bihua Yang.

Financial Consulting (Shenzhen) Co., Ltd.

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

Company had the following related party balances as of December 31, 2024 and March 31, 2024:

OF RELATED PARTY BALANCES

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

Company had the following related party balances as of June 30, 2025 and March 31, 2025:

SCHEDULE OF RELATED PARTY BALANCES

from related party

1 unchanged sentence

Bihua Yang ( 2 )

Amount due from related

Amount due from related party

Related party

Hongye Financial Consulting (Shenzhen)

Dewu Huang (3)

Jinlong Huang

Related party borrowings

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

During the quarter ended December 31, 2024, the Company provided a short term loan of approximately $ 0.175 million to Hong

Zhida and received repayment of approximately $ 0.277 million from him.

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

Amount due to related party

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

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

During the quarter ended

December 31, 2024, the Company provided a short term loan of approximately $ 0.4 million to Yang Bihua and received repayment of approximately

June 30, 2025, the Company provided a short term loan of approximately $ 0.23

million to Bihua Yang and received repayment of approximately $ 0.1 3

million from him.

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

The decrease is because YBY was disposed

of in August 2024.

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

DEBT SECURITIES HELD-TO-MATURITY

OF DEBT SECURITIES HELD TO MATURITY

SCHEDULE OF DEBT SECURITIES HELD TO MATURITY

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 % p.a.

On August 23, 2023, the Company entered into an agreement

to transfer the principal and coupon receivable to a third party.

During the quarter ended December 31, 2024, the Company received interest

payment of $ 330,000 .

As of December 31, and March 31, 2024, the coupon receivable was $ Nil and $ 437,500 .

The debt is guaranteed by Hongye

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

consist of the following as of December 31, 2024 and March 31, 2024:

OF INVENTORIES

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

The note was renewable with a one-year term on August 23, 2023 and it was a 2.5 %

On August 23, 2023, 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.

24, 2024, a Supplemental Agreement to the note was signed to extend the maturity date to August 24, 2025.

As of June 30, and March 31,

2025, the coupon receivable was approximately $ 255,000 and $ 365,000 .

consist of the following as of June 30, and March 31, 2025:

SCHEDULE OF INVENTORIES

Raw materials

Work in progress

Finished goods

10 unchanged sentences

PREPAYMENTS AND OTHER RECEIVABLES

and other receivables consist of the following as of December 31 and March 31, 2024:

OF PREPAYMENTS AND OTHER RECEIVABLES

and other receivables consist of the following as of June 30 and March 31, 2025:

SCHEDULE OF PREPAYMENTS AND OTHER RECEIVABLES

Receivable of consideration on disposal

of subsidiaries

Receivable of interest income from debt

Coupon receivable of debt security held-to-maturity

Loan to third party

Other receivables

and other receivables

Prepayments and other receivables

PROPERTY, PLANT AND EQUIPMENT

plant and equipment consists of the following as of December 30 and March 31, 2024:

OF PROPERTY PLANT AND EQUIPMENT

plant and equipment consists of the following as of June 30 and March 31, 2025:

SCHEDULE OF PROPERTY PLANT AND EQUIPMENT

Production plant

4 unchanged sentences

Plant and equipment,

expense for the three and nine months ended December 31, 2024 and 2023 was $ 23,262 and $ 29,004 , $ 99,181 and $ 86,005 , 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 expire in August 2025 .

expense for the three months ended June 30, 2025 and 2024 was $ 20,304 and $ 48,977 , respectively.

SHORT-TERM BANK LOAN

2 unchanged sentences

The loans are guaranteed at no cost by the legal representative

As of December 31, 2024, the Company has borrowed $ 129,360 (RMB 944,255 ) (March 31, 2024:

$ 130,779 ) under this line of credit

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

As of June 30, 2025, the Company has borrowed $ 131,656 (RMB 944,255 ) (March 31, 2025:

$ 130,051 ) under this line of credit with

various annual interest rates from 4.34 % to 4.9 %.

The outstanding loan balance was due on September 30, 2021.

The Company was not

able to renew the loan facility with the bank.

The Company is negotiating with the bank on repayment schedule of the loan balance and

interest payable.

The Company was not able

to renew the loan facility with the bank.

The Company is negotiating with the bank on repayment schedule of the loan balance and interest

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

2 unchanged sentences

The loans are guaranteed by the legal representative of XKJ at no cost.

The first drawdown was in October 2023.

December 31, 2024, the Company has borrowed $ 356,192 (RMB 2,600,000 ) (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 $ 68,800 (RMB 500,000 ) for daily operations.

As of December 31, 2024, the outstanding balance of

the loan was $ 34,249 (RMB 250,000 ) (March 31, 2024:

As of June 30, 2025, the Company has borrowed

$ 536,800 (RMB 3,850,000 ) (March 31, 2025:

$ 406,300 ) 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 will expire on February 1, 2026.

December 2023, Shenzhen Yingxi Peng Fa Logistic Co., Ltd (“ 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 $ 69,714

(RMB 500,000 )

for daily operations.

The annual interest rate of this line of credit is 16.2 %.

The loan facility will expire on December 26, 2025.

As of June 30, 2025, the Company has fully repaid this loan facility (March

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

1 unchanged sentence

borrow up to approximately $ 139,429 (RMB 1,000,000 ) for daily operations.

As of December 31, 2024, the outstanding balance of the loan

was $ 97,855 (RMB 714,286 ) (March 31, 2024:

As of June 30, 2025, the Company has borrowed $ 59,755 (RMB 428,571 )

(March 31, 2025:

$ 78,702 ) under this line of credit with annual interest rate of 8.244 %.

The loan facility

will expire on March 22, 2026 .

The loan facility will expire on March 22, 2026.

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,

Company operates in the PRC and files tax returns in the PRC.

Industrial Chain Group Co., Ltd was incorporated in the Republic of Seychelles and, under the current laws of Seychelles,

is not subject to income taxes.

3 unchanged sentences

No provision for income taxes in Hong Kong has been made as Yingxi

HK had no taxable income for the three and nine months ended December 31, 2024 and 2023.

HK had no taxable income for the three months ended June 30, 2025 and 2024.

Shenzhen Qianhai Yingxi Industrial Chain Services Co., Ltd (“ YX”),

our wholly-owned subsidiary, was incorporated in the PRC and is subject to the EIT tax rate of 25 %.

No provision for income taxes in

the PRC has been made as YX had no taxable income for the three and nine months ended December 31, 2024 and 2023.

Company is governed by the Income Tax Laws of the PRC.

All Yingxi’s operating companies were subject to progressive EIT rates from

5 % to 15 % in 2024 and 2023.

The preferential tax rate will be expired at end of year 2024 and the EIT rate will be 25% from year 2025 .

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.

had no United States taxable income for the three and nine

months ended December 31, 2024 and 2023.

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

is governed by the Income Tax Laws of the PRC.

All YX’s operating companies were subject to progressive EIT rates from 5 %

in 2025 and 2024.

preferential tax rate will expire at end of year 2025 and the EIT rate will be 25% from year 2026.

parent entity, Addentax Group Corp.

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

No provision for income

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

taxable income for the three months ended June

30, 2025 and 2024.

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

1 unchanged sentence

Three months ended

Nine months ended

PRC statutory tax rate

Computed expected benefits

Computed expected benefits (expense)

Temporary differences

7 unchanged sentences

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 %.

The 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 YXPF enjoyed the preferential

VAT rate of 3 % in 2024 and 2023.

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

value of sales as required.

A credit is available whereby VAT paid on gasoline and toll charges can be used to offset the VAT due on

service income.

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 %.

The 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 a logistics company, except that PF enjoys the preferential VAT rate of 3 %

in 2025 and 2024.

XKJ and PF are required to pay the full amount of VAT calculated at the applicable VAT

rate of the invoiced value of sales as required.

A credit is available whereby VAT paid on gasoline and toll charges can be used to

offset the VAT due on service income.

CONSOLIDATED SEGMENT DATA

3 unchanged sentences

The Company reports financial and operating

information in the following four segments:

information in the following three segments:

manufacturing .

2 unchanged sentences

management and subleasing.

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

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

in garment market.

1 unchanged sentence

information in the segment structure is presented in the following tables:

by segment for the three and nine months ended December 31, 2024 and 2023 are as follows:

OF SEGMENT REPORTING FOR REVENUE

Revenues from

external customers

Three months ended

Nine months ended

Revenues from

external customers

by segment for the three months ended June 30, 2025 and 2024 are as follows:

SCHEDULE OF SEGMENT REPORTING FOR REVENUE

from external customers

Garments manufacturing segment

Logistics services segment

Property management and

Property management

and subleasing

Total of reportable segments

Corporate and other

Total of reportable

2 unchanged sentences

Garments manufacturing

from operations by segment for the three and nine ended December 30, 2024 and 2023 are as follows:

SCHEDULE OF SEGMENT REPORTING FOR LOSS FROM OPERATION

from operations by segment for the three ended June 30, 2025 and 2024 are as follows:

SCHEDULE OF SEGMENT REPORTING FOR INCOME FROM OPERATION

Three months ended

Nine months ended

Garments manufacturing segment

Garment manufacturing segment

Logistics services segment

1 unchanged sentence

Total of reportable segments

$ ( 256,777 )

$ ( 240,109 )

$ ( 474,661 )

$ ( 120,383 )

Corporate and other

consolidated income (loss) from operations

consolidated income from operations

$ ( 627,207 )

$ ( 505,016 )

assets by segment as of December 30 and March 31, 2024 are as follows:

assets by segment as of June 30 and March 31, 2025 are as follows:

SCHEDULE OF SEGMENT REPORTING FOR ASSETS

14 unchanged sentences

a net proceed of $ 15,000,000 in consideration of the issuance of:

secured convertible notes in the aggregate original principal amount of approximately $ 16.7 million with interest rate of 5 % per

annum (the “Convertible Notes”);

The Convertible Notes shall be matured on July 4, 2024 .

secured convertible notes in the aggregate original principal amount of approximately $ 16.7

million with an interest rate of 5 %

per annum (the “Convertible Notes”);

The Convertible Notes matured on July

The conversion price is $ 1.25 ,

subject to adjustment under several conditions.

to purchase up to approximately 16.1 million shares of common stock of the Company (the “Common Stock”) until on or prior

to 11:59 p.m.

(New York time) on the five-year anniversary of the closing date at an exercise price of $ 1.25 per share, also subject

to adjustment under several conditions.

Warrant is considered a freestanding instrument issued together with the Convertible Note and measured at its issuance date fair value.

Proceeds received were first allocated to the Warrant based on its initial fair value.

The initial fair value of the Warrant was $ 3.9

The Warrant were marked to the market with the changes in the fair value of warrant recorded in the consolidated statements

(“Warrants”) to purchase up to approximately 16.1

million shares of common stock of the Company (the “Common Stock”) until on or prior to 11:59 p.m.

(New York time) on

the five-year anniversary of the closing date at an exercise price of $ 1.25

per share, also subject to adjustment under several conditions.

Warrants are considered a freestanding instrument issued together with the Convertible Notes and measured at their issuance date fair

Proceeds received were first allocated to the Warrants based on their initial fair value.

The initial fair value of the

Warrants was $ 3.9

The Warrants were marked to the market with the changes in the fair value of warrant recorded in the consolidated statements

of operations and comprehensive loss.

As of December 31, 2024, the balance of the Warrant was approximately $ 0.7 million (March 31, 2024:

$ 0.25 million).

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

As of June 30, 2025, the balance of the Warrants was approximately $ 0.8

million (March 31, 2025:

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

value and the repayment amount as interest expenses using the effective interest method over the period from the issuance date to the

6 unchanged sentences

feature was $ 1.2 million.

As of December 31, 2024, the fair value of the conversion option was $ 0.8 million (March 31, 2024:

As of June 30, 2025, the fair value of the conversion option was $ 0.03 million (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

Convertible Note or do not meet the definition of a derivative.

total proceeds of the Convertible Note and the Warrants, net of issuance cost, of $ 15.0 million was received by the Company in January

Convertible Notes or do not meet the definition of a derivative.

total proceeds of the Convertible Notes and the Warrants, net of issuance cost, of $ 15.0 million were received by the Company in January

2023, and allocated to each of the financial instruments as following:

OF FINANCIAL INSTRUMENTS

SCHEDULE OF FINANCIAL INSTRUMENTS

January 4, 2023

Derivative liabilities –

1 unchanged sentence

Derivative liabilities – Embedded conversion

Convertible Note

January 2023, the Company also granted to the placement agent a warrant as partial of agent fee to purchase 0.7 million shares of common

stock of the Company.

The warrant is matured in five years with exercise price of $ 1.25 subject to adjustments under different conditions.

The warrant was recognized as derivative liability and the initial fair value was $ 0.168 million.

July 2024, the Company entered into agreement with the holder of the convertible notes to extend the maturity date to July 4, 2025 .

than the extension of the maturity date, there is no other amendment to the original note.

The original note continued in full force

Company’s convertible notes obligations were as the following for the three and nine months ended December 31, 2024 and 2023:

OF CONVERTIBLE NOTES OBLIGATION

Convertible Note s

January 2023, the Company also granted to the placement agent a warrant as partial payment of an agency fee to purchase 0.7

million shares of Common Stock of the Company.

The warrant matures in five years with an exercise price of $ 1.25

subject to adjustments under different conditions.

The warrant was recognized as a derivative liability with an initial fair value

Company’s Convertible Notes’ obligations were as the following for the three months ended June 30, 2025 and 2024:

SCHEDULE OF CONVERTIBLE NOTES OBLIGATION

Three months ended

Nine months ended

Carrying value – beginning

1 unchanged sentence

( 2,290,408 )

( 5,687,056 )

Amortization of debt discount

Deferred debt discount and cost of issuance

( 1,815,995 )

Interest charge

Carrying value – ending balance

the three and nine months ended December 31, 2024, approximately $ Nil and $ 82,642 of the convertible note was converted into approximately

Nil and 132,994 ordinary shares, with average effective conversion price of $ 0.6214 per share.

During the three and nine months ended

December 31, 2023, approximately $ 47,128 and $ 3.7 million of the convertible notes was converted into approximately 0.05 and 3.1 million

ordinary shares, with average effective conversion price of $ 1.0245 and $ 1.4896 per share.

Company’s derivative liabilities were as the following for the three and nine months ended December 30, 2024 and 2023:

OF DERIVATIVE LIABILITIES

Three months ended

Nine months ended

Derivative liabilities

the three months ended June 30, 2025, $ 2.3

million of Convertible Notes was converted into approximately 4.3

million shares of Common Stock, with an average effective conversion price of $ 0.5363

During the three months ended June 30, 2024, no

Convertible Notes was converted into shares of Common Stock.

Company’s derivative liabilities were as the following for the three months ended March 31, 2025 and 2024:

SCHEDULE OF DERIVATIVE LIABILITIES

Three months ended June 30,

Derivative liabilities –Warrants

Beginning balance

Marked to the market

( 3,053,446 )

Ending fair value

Derivative liabilities

– Embedded conversion feature

Derivative liabilities – Embedded conversion feature

Beginning balance

Converted to ordinary shares

Remeasurement on change of convertible price

( 1,572,238 )

Remeasurement on change of convertible price

Marked to the market

Ending fair value

Total Derivative fair

value at end of period

Total Derivative fair value at end of period

asset and lease liabilities

Company recognized right-of-use asset as well as lease liability according to the ASC 842, Leases (with the exception of short-term leases).

Lease liabilities are measured at present value of the sum of remaining rental payments as of December 31, 2024, with discounted rate

Company recognized right-of-use asset as well as lease liability according to the ASC 842, Leases (with the exception of short-term

Lease liabilities are measured at present value of the sum of remaining rental payments as of June 30, 2025, with a

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 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.

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 subleasing and property management services business for 16

years with an option to extend the lease.

Following table summarizes the components of lease expense:

SCHEDULE OF LEASE EXPENSES

Three months ended

Operating lease cost

2 unchanged sentences

SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASES

Three months ended

Cash paid for amounts included in the measurement of lease liabilities

Operating cash flow from operating

Right-of-use assets obtained in exchange for

new operating leases liabilities

Weighted average remaining lease term - Operating

leases (years)

Weighted average discount rate - Operating

following table summarizes the maturity of operating lease liabilities:

SCHEDULE OF MATURITY OF OPERATING LEASE

Years ending December 31

2029 and there after

Total lease payments

( 9,051,133 )

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

Operating cash flow used in operating leases

Weighted average remaining lease term - Operating leases (years)

Weighted average discount rate - Operating leases

are no operating lease liabilities for the following five years and the years after due to disposal of the subsidiary, HX, on July 1, 2025.

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

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

2 unchanged sentences

income from subleasing is disclosed in Note 13 segment data.

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

OF FUTURE MINIMUM RENT RECEIVABLE

2029 and there after

SHARE CAPITAL

Company effected the amendment and combination to the outstanding shares of our 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 .

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

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

will be no future rental income as HX, the subsidiary conducting the subleasing and property management services business was

disposed of on July 1, 2025.

SHARE CAPITAL AND RESERVE

August 2022, the Company completed its IPO and 5,000,000 Common Stock were issued and sold to the public, with proceeds of approximately

$ 20.2 million, net of underwriter commissions and relevant offering expenses.

September, 2022, 391,666 shares were issued upon cashless exercise of Underwriter Warrants.

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 $ 250,000

divided into 250,000,000

shares of Common Stock with par value of US$ 0.001

Company effected the amendment and combination to the outstanding shares of its Common Stock into fewer number of outstanding shares

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

As a result, the number

of shares was reduced by 33,655,839

the Reverse Stock Split Amendment, the Company issued 1,644,188

shares of Common Stock with par value of US$ 0.001

April 29, 2024, the Company entered into two private placement agreements (the “Agreements”) with certain individual investors

(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, resulting in

aggregate gross proceeds to the Company of $ 646,800 , which closed on the same day.

Pursuant to the Agreement, the Company issued an aggregate

Pursuant to the Agreements, the Company issued an aggregate

of 660,000 unregistered shares of Common Stock to the Investors.

are 6,043,769 and 5,383,769 ordinary shares issued and outstanding at December 31, 2024 and March 31, 2024, respectively.

are 10,090,963

and 6,043,769

shares of Common Stock issued and outstanding at June 30, 2025 and March 31, 2025, respectively.

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

10% of its profit after taxation prepared in accordance with the accounting regulations of the PRC to the statutory reserve until the

reserve balance reaches 50% of the subsidiary’s paid-up capital.

Such reserve may be used to offset accumulated losses or increase

the registered capital of the subsidiary, subject to the approval from the PRC authorities, and are not available for dividend distribution

to the shareholders.

The amount appropriated to statutory reserve for the years ended March 31, 2025 and 2024 was $ 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.

RISKS AND UNCERTAINTIES

17 unchanged sentences

currencies are the RMB, all assets and liabilities are translated at exchange rates at the balance sheet date, which was 7.17 and 7.26

as of December 31, 2024 and March 31, 2024, respectively.

as of June 30, 2025 and March 31, 2025, respectively.

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

was 7.19 and 7.15 , 7.20 and 7.15 for the three and nine months ended December 31, 2024 and 2023, respectively.

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.

was 7.231 and 7.004 for the three months ended June 30, 2025 and 2024, respectively.

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.

Concentration

followings are the percentages of accounts receivable balance of the top customers over accounts receivable for each segment as of December

followings are the percentages of accounts receivable balance of the top customers over accounts receivable for each segment as of June

30, 2025 and March 31, 2025.

manufacturing segment

OF CONCENTRATION RISKS

high concentration as of December 31, 2024 was mainly due to business development of a large distributor of garments.

SCHEDULE OF CONCENTRATION RISKS

June 30, 2025

March 31, 2025

high concentration as of June 30, 2025 was mainly due to business development of a large distributor of garments.

services segment

June 30, 2025

March 31, 2025

management and subleasing segment

is no account receivable for Property management and subleasing segment as for December 31, and March 31, 2024.

was no account receivable for the property management and subleasing segment as of June 30, 2025 and March 31, 2025.

Concentration

the three months ended December 31, 2024, two customers from Logistics services segment provided more than 10 % of total revenue of the

Company, representing 37.6 % of total revenue of the Company for the three months.

For the nine months ended December 31, 2024, two customers

from Logistics services segment provided more than 10 % of total revenue of the Company, representing 40.7 % of total revenue of the Company

for the nine months.

the three months ended December 31, 2023, two customer from Logistics services segment provided more than 10 % of total revenue of the

Company, representing 31.8 % of total revenue of the Company for the three months.

For the nine months ended December 31, 2023, one customer

from Logistics services segment provided more than 10 % of total revenue of the Company, representing 16.5 % of total revenue of the Company

for the nine months.

the three months ended June 30, 2025, three customer from the logistics services segment provided more than 10% of total revenue of

the Company, representing 45.4 %

of total revenue of the Company for the three months.

the three months ended June 30, 2024, one customer from the logistics services segment provided more than 10% of total revenue of

the Company, representing 16.1 %

of total revenue of the Company for the three months.

Concentration

following tables summarized the purchases from five largest suppliers of each of the reportable segments for the three and nine

months ended December 31, 2024 and 2023.

OF PURCHASES FROM SUPPLIERS

following tables summarized the purchases from five largest suppliers of each of the reportable segments for the three months ended June

30, 2025 and 2024.

SCHEDULE OF PURCHASES FROM SUPPLIERS

Three months ended

Nine months ended

Garment manufacturing segment

3 unchanged sentences

interest income generated by cash invested in cash deposits and liquid investments.

As of December 31, 2024, the total outstanding borrowings

As of June 30, 2025, the total outstanding borrowings

amounted to $ 728,212 (RMB 5,222,826 ) with various interest rate from 4.34 % to 16.2 % p.a.

SUBSEQUENT EVENTS

On August 11, 2025, the board of directors

of the Company, after a performance evaluation and upon recommendation of the compensation committee, approved an increase of Company’s Chief Executive Officer, Zhida Hong’s annual

salary from $ 17,229 to $ 200,000 , effective immediately.

On August 11, 2025, the Company filed

a registration statement on Form S-8 (the “Registration

Statement”) to register 161,665

shares of Common Stock issued pursuant to its 2024 Equity Incentive Plan

(the “Plan”) to six of its executive officers and directors (the

“Selling Stockholders”) at a price of $ 0.433 per share (which was the last reported sale price of the shares of Common Stock as reported

on Nasdaq on August 8, 2025).

On July 1, 2025, the Company disposed of HX to its management.

of disposal, the net assets of HX was approximately $ 6,972 .

The consideration was $ 13,829 , resulting in an income of $ 6,857 from disposal.

July 2025, approximately $ 0.8

million of convertible notes including principal and related accrued interest were converted into approximately 1.46

million shares of Common Stock.

The effective average conversion price was $ 0.5222

The remaining balance of principal and interest, approximately amounted to $ 0.4

million, were redeemed by cash before the expiration of the convertible note.

July, 2025, the Company entered into a non-binding term sheet with a substantial and independent Bitcoin holder to acquire up to 12,000

Based on prevailing market prices, the proposed acquisition represents an aggregate market value of approximately US$ 1.3 billion.

If completed, the transaction would be settled through the issuance of newly issued shares of the Company’s Common Stock.

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.

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

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements