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What changed in ADDENTAX GROUP CORP.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of ADDENTAX GROUP CORP.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+191 added−201 removedSource: 10-K (2025-06-30) vs 10-K (2024-07-15)

Top changes in ADDENTAX GROUP CORP.'s 2025 10-K

191 paragraphs added · 201 removed · 185 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

53 edited+2 added−7 removed69 unchanged
Biggest change“ PRC Subsidiaries ” refer to, collectively, (i) Qianhai Yingxi Textile & Garments Co., Ltd.; (ii) Shenzhen Qianhai Yingxi Industrial Chain Services Co., Ltd (“YX”), (iii) Dongguan Heng Sheng Wei Garments Co., Ltd (“HSW”), (iv) Dongguan Yushang Clothing Co., Ltd (“YS”); (v) Shantou Yi Bai Yi Garment Co., Ltd (“YBY”); (vi) Shenzhen Yingxi Peng Fa Logistic Co., Ltd., a PRC company (“PF”); (vii) Shenzhen Xin Kuai Jie Transportation Co., Ltd, a PRC company (“XKJ”), (viii) Shenzhen Yingxi Tongda Logistic Co., Ltd, a PRC company (“TD”), (ix) Zhuang Hao Jia (Dongguan) Decoration Engineering Co.,Ltd, a PRC company (“ZHJ”), and (x) Dongguan Aotesi Garments Co., Ltd.,, a PRC company (“AOT”), (xi) Dongguan Hongxiang Commercial Co., Ltd., a PRC company (“HX”).
Biggest change“PRC Subsidiaries” refer to, collectively, (i) Qianhai Yingxi Textile & Garments Co., Ltd.; (ii) YX, (iii) HSW, (iv) YS; (v) PF; (vi) Shenzhen Xin Kuai Jie Transportation Co., Ltd, a PRC company (“XKJ”), (vii) AOT, and (viii) Dongguan Hongxiang Commercial Co., Ltd., a PRC company (“HX”).
Seasonality We generally receive more delivery orders in our third and fourth quarters and are more vulnerable to shipping delays in the PRC during Chinese New Year due to traffic and port congestion, border crossing delays and customs clearance issues.
Seasonality We generally receive more delivery orders in our third and fourth quarters and are more vulnerable to shipping delays in the PRC during the Chinese New Year due to traffic and port congestion, border crossing delays and customs clearance issues.
Our customers are as follows: (i) in the garment manufacturing business are mainly garment wholesalers and retailers, (ii)our customers in logistics business are mainly trading companies and logistic companies, and (iii) our customers in property management and subleasing business are manufacturing companies and e-commerce companies.
Our customers are as follows: (i) our customers in the garment manufacturing business are mainly garment wholesalers and retailers, (ii) our customers in the logistics business are mainly trading companies and logistic companies, and (iii) our customers in the property management and subleasing business are manufacturing companies and e-commerce companies.
For our new customers, we generally require advances or deposits to be made when placing orders. Our logistics business We pack products and provide logistics service to our customers through our wholly-owned subsidiaries, XKJ, PF and TD which are located in Guangdong province, the PRC. Our in-house logistics teams deliver to approximately 10 provinces and 2 municipalities in the PRC.
For our new customers, we generally require advances or deposits to be made when placing orders. Our logistics business We pack products and provide logistics service to our customers through our wholly-owned subsidiaries, XKJ and PF which are located in Guangdong province, the PRC. Our in-house logistics teams deliver to approximately 10 provinces and 2 municipalities in the PRC.
Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC project.
Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC enterprise.
Moreover, if trading in our securities is prohibited under the HFCAA in the future because the PCAOB determines that it cannot inspect or fully investigate our auditor at such future time, an exchange may determine to delist our securities.
Moreover, if trading in our securities is prohibited under the HFCAA in the future because the PCAOB determines that it cannot inspect or fully investigate our auditor at such future time, an exchange may determine to delist our securities. 16
It is possible when the PCAOB may reassess its determinations in the future, and it could determine that it is still unable to inspect or investigate completely registered public accounting firms in mainland China and Hong Kong.
It is possible that the PCAOB may reassess its determinations in the future, and it could determine that it is still unable to inspect or investigate completely registered public accounting firms in mainland China and Hong Kong.
Directly liable persons-in-charge and other directly liable persons shall be warned and each imposed a fine of between RMB 500,000 yuan and RMB 5,000,000 yuan. 14 According to the Overseas Listing Filing Rules, the company, as an enterprise that has been listed on the Nasdaq Capital Market before the new regulations come into effect, does not need to apply to the CSRC for filing immediately.
Directly liable persons-in-charge and other directly liable persons shall be warned and each imposed a fine of between RMB 500,000 yuan and RMB 5,000,000 yuan. 13 According to the Overseas Listing Filing Rules, the company, as an enterprise that has been listed on the Nasdaq Capital Market before the new regulations come into effect, does not need to apply to the CSRC for filing immediately.
Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation. 15 The PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC.
Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation. 14 The PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC.
However, the 5% withholding tax rate does not automatically apply and certain requirements must be satisfied, including without limitation that (a) the Hong Kong project must be the beneficial owner of the relevant dividends; and (b) the Hong Kong project must directly hold no less than 25% share ownership in the PRC project during the 12 consecutive months preceding its receipt of the dividends.
However, the 5% withholding tax rate does not automatically apply and certain requirements must be satisfied, including without limitation that (a) the Hong Kong enterprise must be the beneficial owner of the relevant dividends; and (b) the Hong Kong enterprise must directly hold no less than 25% share ownership in the PRC enterprise during the 12 consecutive months preceding its receipt of the dividends.
We believe outsourcing allows us to maximize our delivery capacity and improve inventory flexibility while minimizing capital expenditures, such as shipping costs and the costs of additional drivers during low seasons. 11 Our logistics services We provide comprehensive logistics services to our customers, which include storage, transportation, warehousing, handling, packaging and order processing.
We believe outsourcing allows us to maximize our delivery capacity and improve inventory flexibility while minimizing capital expenditures, such as shipping costs and the costs of additional drivers during low seasons. 10 Our logistics services We provide comprehensive logistics services to our customers, which include storage, transportation, warehousing, handling, packaging and order processing.
We expect to develop 20 additional logistics routes in existing serving cities and improve the Company’s profits in the year 2024. Develop international logistics services and warehousing services. We intend to develop international logistics services for customers located all over the world and international warehousing services. Develop E-commerce business.
We expect to develop 20 additional logistics routes in existing serving cities and improve the Company’s profits in the year 2025. Develop international logistics services and warehousing services. We intend to develop international logistics services for customers located all over the world and international warehousing services. Develop E-commerce business.
Our internal management Our management in the logistics business is responsible for setting out business strategies and managing the daily operation. Specifically, they have regular meetings with different departments, conduct inspection and supervise the finance department, operation department and administration department.
Our internal management Our management in the logistics business is responsible for setting out business strategies and managing the daily operation. Specifically, they have regular meetings with different departments, conduct inspections and supervise the finance department, operation department and administration department.
Pan-China Singapore is headquartered in Singapore and there are no limitations in Singapore on PCAOB inspections.
Pan-China Singapore PAC is headquartered in Singapore and there are no limitations in Singapore on PCAOB inspections.
Our logistics business has nine routes and covers 44 cities in 10 provinces and 2 municipalities in the PRC. Strategic location and infrastructure. Our property management and subleasing business operates through Dongguan Hongxiang Commercial Co., Ltd. (HX), located in Guangdong province, China, is a key area for the garment market.
Our logistics business has nine routes and covers 45 cities in 10 provinces and 2 municipalities in the PRC. Strategic location and infrastructure. Our property management and subleasing business operates through Dongguan Hongxiang Commercial Co., Ltd. (HX), located in Guangdong province, China, which is a key area for the garment market.
We integrated resources in shopping mall, intend to develop e-commerce bases and the internet celebrity economy together to drive to increase the value of the stores in the area. Enhance tenant experience through value-added services. We aim to offer a range of value-added services to our tenants, including property maintenance, marketing support, and business consulting.
We integrated resources in shopping malls and we intend to develop e-commerce bases and the internet celebrity economy together to increase the value of the stores in the area. Enhance tenant experience through value-added services. We aim to offer a range of value-added services to our tenants, including property maintenance, marketing support, and business consulting.
Exceptional customer service will help build strong relationships with tenants and improve overall satisfaction. 10 Our garment manufacturing business We manufacture garments for various high-end fashion brands through our wholly-owned subsidiaries, HSW, YS, YBY, ZHJ, AOT, which are located in Guangdong province, the PRC. Operations Our customer relationship team is responsible for cultivating and maintaining our relationship with customers.
Exceptional customer service will help build strong relationships with tenants and improve overall satisfaction. 9 Our garment manufacturing business We manufacture garments for various high-end fashion brands through our wholly-owned subsidiaries, HSW, YS, AOT, which are located in Guangdong province, the PRC. Operations Our customer relationship team is responsible for cultivating and maintaining our relationship with customers.
PRC Limitation on Overseas Listing and Share Issuances Based on the opinion of our PRC counsel, currently, each of our PRC Subsidiaries holds and maintains a business license issued by the local market supervision and administration bureau, and has received all requisite permissions and approvals in order to conduct and operate our business.
PRC Limitation on Overseas Listing and Share Issuances Currently, each of our PRC Subsidiaries holds and maintains a business license issued by the local market supervision and administration bureau, and has received all requisite permissions and approvals in order to conduct and operate our business.
We are not a Chinese operating company. We are a holding company and do not directly own any substantive business operations in China. Our holding company structure involves unique risks to investors.
We are a holding company and do not directly own any substantive business operations in China. Our holding company structure involves unique risks to investors.
In current practice, a Hong Kong project must obtain a tax resident certificate from the Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate.
In current practice, a Hong Kong enterprise must obtain a tax resident certificate from the Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate.
The delisting or the cessation of trading of our Ordinary Shares, or the threat of their being delisted or prohibited from being traded, may materially and adversely affect the value of your investment. The PCAOB continues to demand complete access in mainland China and Hong Kong moving forward and has resumed regular inspections since March 2023.
The delisting or the cessation of trading of our Common Stock, or the threat of their being delisted or prohibited from being traded, may materially and adversely affect the value of your investment. The PCAOB continues to demand complete access in mainland China and Hong Kong moving forward and has resumed regular inspections since March 2023.
Such uncertainty could cause the market price of our Ordinary Shares to be materially and adversely affected. On August 26, 2022, the PCAOB announced that it had signed the “Protocol” with the CSRC and the MOF, which governs inspections and investigations of audit firms based in mainland China and Hong Kong.
Such uncertainty could cause the market price of our Common Stock to be materially and adversely affected. On August 26, 2022, the PCAOB announced that it had signed the “Protocol” with the CSRC and the MOF, which governs inspections and investigations of audit firms based in mainland China and Hong Kong.
As of March 31, 2024, we had 10 employees in the production department that are responsible for conducting our quality control process. We implement a stringent quality control process which monitors various stages of our garment manufacturing business, including sampling checks of semi-finished products and finished products.
Stringent quality control process. As of March 31, 2025, we had 20 employees in the production department that are responsible for conducting our quality control process. We implement a stringent quality control process which monitors various stages of our garment manufacturing business, including sampling checks of semi-finished products and finished products.
If it is issued and listed in other overseas markets, it shall be filed in accordance with relevant regulations. The Company entered into two private placement agreements with certain individual investors for 330,000 common Shares each at a unit price of $0.98 per share and for a total of $646,800.
If it is issued and listed in other overseas markets, it shall be filed in accordance with relevant regulations. On April 29, 2024, the Company entered into two private placement agreements with certain individual investors for 330,000 shares of Common Stock each at a unit price of $0.98 per share and for a total of $646,800.
Therefore, we believe that, as of the date of this Annual Report, our auditor is not subject to the determinations announced by the PCAOB on December 16, 2021 relating to the PCAOB’s inability to inspect or investigate completely registered public accounting firms headquartered in the PRC or Hong Kong because of a position taken by one or more authorities in the PRC or Hong Kong.
Therefore, we believe that, as of the date of this Form 10-K, our auditor is not subject to the determinations announced by the PCAOB on December 16, 2021 relating to the PCAOB’s inability to inspect or investigate completely registered public accounting firms headquartered in the PRC or Hong Kong because of a position taken by one or more authorities in the PRC or Hong Kong.
Employees As of March 31, 2024, we had approximately 112 employees and there was no labor union established by our employees.
Employees As of March 31, 2025, we had approximately 112 employees and there was no labor union established by our employees.
We plan to distribute our products in different channels, including our own retailers, co-operative retailers and franchisees. Expand our delivery network. As of March 31, 2024, we provided logistics services to over 44 cities in 10 provinces and 2 municipalities in the PRC.
We plan to distribute our products in different channels, including our own retailers, co-operative retailers and franchisees. Expand our delivery network. As of March 31, 2025, we provided logistics services to over 45 cities in 10 provinces and 2 municipalities in the PRC.
Any audit reports not issued by auditors that are completely inspected by the PCAOB, or a lack of PCAOB inspections of audit work undertaken in China that prevents the PCAOB from regularly evaluating our auditors’ audits and their quality control procedures, could result in a lack of assurance that our financial statements and disclosures are adequate and accurate. 16 Our auditor, Pan-China Singapore, the independent registered public accounting firm that issued the audit report included in this Annual Report, is subject to PCAOB inspections.
Any audit reports not issued by auditors that are completely inspected by the PCAOB, or a lack of PCAOB inspections of audit work undertaken in China that prevents the PCAOB from regularly evaluating our auditors’ audits and their quality control procedures, could result in a lack of assurance that our financial statements and disclosures are adequate and accurate. 15 Our auditor, Pan-China Singapore PAC, the independent registered public accounting firm that issued the audit report included in this Form 10-K, is subject to PCAOB inspections.
Following the completion of the SPA, YICG’s business became our business. We have a fiscal year-end of March 31. The business office is located at Kingkey 100, Block A, Room 4805, Luohu District, Shenzhen City, China 518000. Our telephone number is +(86) 755 8233 0336.
The completion of the SPA took place on September 25, 2017. Following the completion of the SPA, YICG’s business became our business. We have a fiscal year-end of March 31. The business office is located at Kingkey 100, Block A, Room 4805, Luohu District, Shenzhen City, China 518000. Our telephone number is +(86) 755 8233 0336.
As of the date of this annual report, we have not applied for the tax resident certificate from the relevant Hong Kong tax authority. Yingxi HK intends to apply for the tax resident certificate when WFOE plans to declare and pay dividends to Yingxi HK.
As of the date of this Form 10-K, we have not applied for the tax resident certificate from the relevant Hong Kong tax authority. Yingxi HK intends to apply for the tax resident certificate when WFOE plans to declare and pay dividends to Yingxi HK.
The following table sets out a breakdown of the number of employees by function as of March 31, 2024: Function Number of employees Administration 35 Finance 12 Logistics 21 Marketing 6 Operation 28 Productive 10 Total 112 13 According to PRC regulations, we must participate in various employee social security plans organized by local governments, including pension, unemployment insurance, childbirth insurance, work-related injury insurance, medical insurance and housing insurance.
The following table sets out a breakdown of the number of employees by function as of March 31, 2025: Function Number of employees Administration 20 Finance 10 Logistics 7 Marketing 6 Operation 30 Productive 20 Total 112 12 According to PRC regulations, we must participate in various employee social security plans organized by local governments, including pension, unemployment insurance, childbirth insurance, work-related injury insurance, medical insurance and housing insurance.
Our design team works closely with our customers to understand their needs and make recommendations to them. Our design team also conducts market research and attends industry exhibitions to understand the latest market trends. As of March 31, 2024, our design team consisted of 4 members. 9 Extensive delivery network.
Our design team works closely with our customers to understand their needs and make recommendations to them. Our design team also conducts market research and attends industry exhibitions to understand the latest market trends. As of March 31, 2025, our design team consisted of 3 members. 8 Extensive delivery network.
We maintain our raw materials in our storage facilities. We review our inventory levels in order to identify slow-moving materials and broken assortments. Logistics business . Since we deliver products as soon as we receive orders from customers, we do not operate distribution centers and hence do not need to carry a significant amount of inventory.
We review our inventory levels in order to identify slow-moving materials and broken assortments. Logistics business . Since we deliver products as soon as we receive orders from customers, we do not operate distribution centers and hence do not need to carry a significant amount of inventory. Our property management and subleasing business.
We also provide customs declaration and tax clearance service to our customers who export goods to overseas. Our network We have 121 logistics points and they are located in 10 provinces and 2 municipalities which cover 44 cities in the PRC.
We also provide customs declaration and tax clearance services to our customers who export goods overseas. Our network We have 114 logistics points and they are located in 10 provinces and 2 municipalities which cover 45 cities in the PRC.
There were two and one customers accounted for more than 10% of our net sales for the years ended March 31, 2024 and 2023, respectively . Suppliers We procured our garments through various textile companies in our garment manufacturing business. For our logistics business, we procured from packing companies and transportation companies.
There were two customers that accounted for more than 10% of our net sales for the years ended March 31, 2025 and 2024. Suppliers We procure our garments through various textile companies in our garment manufacturing business. For our logistics business, we procure from packing companies and transportation companies.
“ WFOE ” refers to Qianhai Yingxi Textile & Garments Co., Ltd, a wholly foreign owned enterprise in China, which is indirectly wholly owned by Addentax Group Corp. 8 Our garment manufacturing business consists of sales made principally to wholesaler located in the PRC.
“WFOE” refers to Qianhai Yingxi Textile & Garments Co., Ltd, a wholly foreign owned enterprise in China, which is indirectly wholly owned by Addentax Group Corp. 7 Our garment manufacturing business consists of sales made principally to wholesalers located in the PRC.
We conduct our garment manufacturing operations through five wholly owned subsidiaries, namely Dongguan Heng Sheng Wei Garments Co., Ltd (“HSW”), Dongguan Yushang Clothing Co., Ltd (“YS”), Shantou Yi Bai Yi Garment Co., Ltd (“YBY”), Zhuang Hao Jia (Dongguan) Decoration Engineering Co.,Ltd (“ZHJ”), and Dongguan Aotesi Garments Co., Ltd., (“AOT”) , which are located in the Guangdong province, China.
We conduct our garment manufacturing operations through five wholly owned subsidiaries, namely Dongguan Heng Sheng Wei Garments Co., Ltd (“HSW”), Dongguan Yushang Clothing Co., Ltd (“YS”) and Dongguan Aotesi Garments Co., Ltd., (“AOT”), which are located in the Guangdong province, China.
Holding Foreign Company Accountable Act Trading in our securities may be prohibited under the Holding Foreign Companies Accountable Act, or the HFCAA, if the Public Company Accounting Oversight Board (United States) (the “PCAOB”) determines that it cannot inspect or investigate completely our auditor.
Holding Foreign Company Accountable Act Trading in our securities may be prohibited under the Holding Foreign Companies Accountable Act, or the HFCAA, if the PCAOB determines that it cannot inspect or investigate completely our auditor.
Our property management and subleasing business. We do not need to carry a significant amount of inventory due to the nature of the business.
We do not need to carry a significant amount of inventory due to the nature of the business.
Intellectual Property The Company, through its subsidiary Shenzhen Qianhai Industrial Chain Co.Ltd., herein referred to as “YX,” received the approval of the trademarks below in relation to its business from PRC government. 12 Competition While the PRC is still the world’s largest clothing manufacturer with enormous production capacity, oversupply, increasing labor costs and rising local protectionism have eroded its competitiveness.
Intellectual Property The Company, through its subsidiary YX, received the approval of the trademarks below in relation to its business from PRC government. 11 Competition While the PRC is still the world’s largest clothing manufacturer with enormous production capacity, oversupply, increasing labor costs and rising local protectionism have eroded its competitiveness.
We produce garments in our own production facilities and employ our in-house transport teams to deliver garments to our customers. This one-stop service optimizes production efficiency and saves costs by lowering the cost per unit, thereby achieving economies of scale. Stringent quality control process.
Competitive Strengths We believe we have the following competitive strengths: Cost-effective production. We have adopted a vertical integration production process. We produce garments in our own production facilities and employ our in-house transport teams to deliver garments to our customers. This one-stop service optimizes production efficiency and saves costs by lowering the cost per unit, thereby achieving economies of scale.
After the transactions, we shall be filed with the CSRC within three working days after the issuance of shares is completed. According to the Legal Opinion provided by the Allbright Law Offices, the Company has submitted the filing application to the China Securities Regulatory Commission . As of July 4, 2024, the application is still pending.
After the transactions, we shall be filed with the CSRC within three working days after the issuance of shares is completed. The Company has submitted the filing application to the China Securities Regulatory Commission. As of June 29, 2025, the application is still pending.
Current Business We (Addentax Group Corp.) are a Nevada holding company with no material operations of our own. We conduct substantially all of our operations through our operating companies established in the People’s Republic of China, or the PRC, primarily Shenzhen Qianhai Yingxi Industrial Chain Service Co., Ltd. (“YX”), our wholly owned subsidiary and its subsidiaries.
Current Business We (Addentax Group Corp.) are a Nevada holding company with no material operations of our own. We conduct substantially all of our operations through our operating companies established in the PRC, primarily YX, our wholly owned subsidiary and its subsidiaries. We are not a Chinese operating company.
We classify our businesses into three main segments : garment manufacturing, logistics services, and property management and subleasing. The Company previously engaged in the provision of epidemic prevention supplies, which included manufacturing, distribution and trading of epidemic prevention supplies.
We classify our businesses into three main segments: garment manufacturing, logistics services, and property management and subleasing. The Company previously engaged in the provision of epidemic prevention supplies, which included manufacturing, distribution and trading of epidemic prevention supplies. As the COVID-19 pandemic became an endemic, only the Company ceased to operate in this business in the first quarter of 2023.
We conduct our logistic operations through three wholly owned subsidiaries, namely Shenzhen Xin Kuai Jie Transportation Co., Ltd (“XKJ”), Shenzhen Yingxi Peng Fa Logistic Co., Ltd (“PF”) and Shenzhen Yingxi Tongda Logistic Co., Ltd (“TD”), which are located in the Guangdong province, China.
We conduct our logistics operations through two wholly owned subsidiaries, namely Shenzhen Xin Kuai Jie Transportation Co., Ltd (“XKJ”) and Shenzhen Yingxi Peng Fa Logistic Co., Ltd (“PF”), which are located in the Guangdong province, China. Our property management and subleasing business provides shop subleasing and property management services for garment wholesalers and retailers in the garment market.
For our property management and subleasing business, our suppliers are property owners. There was one supplier accounted for more than 10% of our total cost for the year ended March 31, 2024, and no single supplier accounted for more than 10% of our total costs for the years ended March 31, 2023. Inventory Garment manufacturing business .
For our property management and subleasing business, our suppliers are property owners. There was one supplier that accounted for more than 10% of our total cost for both years ended March 31, 2025 and 2024. Inventory Garment manufacturing business . We maintain our raw materials in our storage facilities.
As the COVID-19 pandemic is near an endemic, the Company ceased to operate in this business in the first quarter of 2023. The remaining assets of this business segment were reclassified into the “Corporate and others” segment. The corresponding items of segment information for the earlier periods were restated to reflect the change of the new segment structure.
The remaining assets of this business segment were reclassified into the “Corporate and others” segment. The corresponding items of segment information for the earlier periods were restated to reflect the change of the new segment structure.
Our subsidiaries include (i) Yingxi Industrial Chain Group Co., Ltd., a Republic of Seychelles company; (ii) Yingxi Industrial Chain Investment Co., Ltd., a Hong Kong company (“Yingxi HK”); (iii) Qianhai Yingxi Textile & Garments Co., Ltd., a PRC company; (iv) Shenzhen Qianhai Yingxi Industrial Chain Services Co., Ltd, a PRC company (“YX”), (v) Dongguan Heng Sheng Wei Garments Co., Ltd, a PRC company (“HSW”), (vi) Dongguan Yushang Clothing Co., Ltd, a PRC company (“YS”), (vii) Shantou Yi Bai Yi Garment Co., Ltd, a PRC company (“YBY”), (viii) Shenzhen Yingxi Peng Fa Logistic Co., Ltd., a PRC company (“PF”); (ix) Shenzhen Xin Kuai Jie Transportation Co., Ltd, a PRC company (“XKJ”), (x) Shenzhen Yingxi Tongda Logistic Co., Ltd, a PRC company (“TD”), (xi) Zhuang Hao Jia (Dongguan) Decoration Engineering Co.,Ltd, a PRC company (“ZHJ”), and (xii) Dongguan Au Te Si Garments Co., Ltd., a PRC company (“AOT” ), (xiii) Dongguan Hongxiang Commercial Co., Ltd., a PRC company (“HX”).
Our subsidiaries include (i) Yingxi Industrial Chain Group Co., Ltd., a Republic of Seychelles company; (ii) Yingxi HK; (iii) Qianhai Yingxi Textile & Garments Co., Ltd., a PRC company; (iv) YX, (v) Dongguan Heng Sheng Wei Garments Co., Ltd, a PRC company (“HSW”), (vi) Dongguan Yushang Clothing Co., Ltd, a PRC company (“YS”), (vii) Shenzhen Yingxi Peng Fa Logistic Co., Ltd., a PRC company (“PF”); (viii) XKJ, (ix) Dongguan Au Te Si Garments Co., Ltd., a PRC company (“AOT”), and (x) Dongguan Hongxiang Commercial Co., Ltd., a PRC company (“HX”).
(“YICG”), which was incorporated under the laws of the Republic of Seychelles and principally engaged in garment manufacture, where we agreed to acquire 100% of the equity interest in YICG and to issue five hundred million (500,000,000) restricted common shares of the Company to YICG. The completion of the SPA took place on September 25, 2017.
(“YICG”), which was incorporated under the laws of the Republic of Seychelles and principally engaged in garment manufacture, where we agreed to acquire 100% of the equity interest in YICG and to issue two million five hundred thousand (2,500,000) restricted common shares of the Company to former owners of YICG (after giving effect to all subsequent share splits, combinations or similar transactions).
We conduct our property management and subleasing operation through a wholly owned subsidiary acquired in September 2023, namely Dongguan Hongxiang Commercial Co., Ltd., a PRC company (“HX”), which is located in the Guangdong province, China. Competitive Strengths We believe we have the following competitive strengths: Cost-effective production. We have adopted a vertical integration production process.
We currently have an aggregate of 56,238 square meters of floor space and provide approximately 1,300 shop spaces to clients. We conduct our property management and subleasing operation through a wholly owned subsidiary acquired in September 2023, namely Dongguan Hongxiang Commercial Co., Ltd., a PRC company (“HX”), which is located in the Guangdong province, China.
Unless the context otherwise requires, all references in this annual report to “ Addentax ” refer to Addentax Group Corp., a holding company, and references to “ we, ” “ us, ” “ our, ” the “ Registrant ”, the “ Company, ” or “ our company ” refer to Addentax and/or its consolidated subsidiaries.
Unless the context otherwise requires, all references in this Form 10-K to “Addentax” refer to Addentax Group Corp., a holding company, and references to “we,” “us,” “our,” the “Registrant”, the “Company,” or “our company” refer to Addentax and/or its consolidated subsidiaries. Addentax Group Corp., our Nevada holding company, is the entity in which investors are investing.
We believe that we maintain a good working relationship with our employees, and to date we have not experienced any significant labor disputes. Recent Developments AI Logistics System Development On March 20, 2024, we signed a memorandum of understanding (MOU) with Dezhong Xinghui Information Technology Co., Ltd. to develop an AI logistics system.
We believe that we maintain a good working relationship with our employees, and to date we have not experienced any significant labor disputes.
This collaboration enhances our capabilities and diversifies its business lines within the AI technology realm. Government Regulations The PRC government has corresponding industrial regulatory measures and policies for garment manufacturing business, logistics business and property management and subleasing business.
(“Yingbin Brand”), to establish the foundation for a nationwide strategic collaboration between the two companies which aims to enhance company’s brand supply chain, product supply chain, and marketing supply chain services in China. Government Regulations The PRC government has corresponding industrial regulatory measures and policies for garment manufacturing business, logistics business and property management and subleasing business.
Removed
Addentax Group Corp., our Nevada holding company, is the entity in which investors are investing.
Added
Recent Developments Company investment On January 8, 2025, we entered into that certain securities purchase agreement (the “Agreement”) to purchase 3,750,000 shares of common stock, $0.001 par value per share (“Well Common Stock”), of Well Information Technology Corporation (“Well InfoTech”), a company incorporated in the State of Nevada, for a total cash consideration of USD $750,000 (the “Shares”).
Removed
Our property management and subleasing business provides shops subleasing and property management services for garment wholesalers and retailers in the garment market. We currently have an aggregate of 56,238 square meters floor space and provide approximately 1,300 shop space to clients. In February 2023, the Company disposed of DY to an independent third party at fair value in February, 2023.
Added
The Shares would constitute approximately 2.5% of the number of shares of Well Common Stock of Well InfoTech immediately prior to the issuance of such Shares. Supply Chian Development On November 21, 2024, we signed a memorandum of understanding (the “MOU”) with Shenzhen Yingbin Brand Development Co., Ltd.
Removed
This system aims to optimize vehicle dispatching, monitor real-time inventory, enable intelligent sorting and delivery, and operate seamlessly, significantly reducing labor costs and errors while enhancing efficiency and quality in logistics operations. Activewear Production Collaboration On March 5, 2024, we entered into a collaboration agreement with Regina Miracle International (Holdings) Limited to produce high-quality, functional, and fashionable activewear.
Removed
This partnership leverages our manufacturing capabilities and comprehensive industry chain services with Regina’s advanced R&D technology in sportswear, aiming to elevate product quality, streamline delivery timelines, and fortify market competitiveness in the sportswear industry.
Removed
Tourism-As-A-Service Platform On February 6, 2024, we signed an MOU with Shenzhen Tamir Cultural Tourism Development Co., Ltd. to launch a “Tourism-As-A-Service” platform utilizing AI and blockchain tools. This initiative aims to incubate local and overseas pan-entertainment and tourism services, enhancing efficiency and effectiveness in full-chain tourism services.
Removed
Comprehensive Supply Chain Services On December 22, 2023, we signed an MOU with Zhongjiu Yihe (Shenzhen) Brand Development Co., Ltd. to establish comprehensive brand, product, and marketing supply chain services in China. This collaboration aims to enhance our market reach and commitment to innovative partnerships.
Removed
AI Content Creation Research and Development On October 18, 2023, we entered into an R&D agreement with Xi’an University of Electronic Science and Technology. This partnership aims to advance AI content creation for the pan-entertainment industry, focusing on developing AI technology for translation, content extraction, and creation management systems.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

66 edited+1 added−5 removed287 unchanged
Biggest changeThese events may necessitate property closures, temporary halts in rental income, or challenges in attracting and retaining tenants, amplifying the adverse impact on our financial performance and overall business stability. Our business depends on the continued contributions made by Mr. Hong Zhida, as our key executive officer, the loss of whom may result in a severe impediment to our business.
Biggest changeSuch tenant-related risks could impact our cash flow and financial performance. 21 Our business depends on the continued contributions made by Mr. Hong Zhida, as our key executive officer, the loss of whom may result in a severe impediment to our business. Our success is dependent upon the continued contributions made by our CEO and President, Mr. Hong Zhida.
The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions.
The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions.
If any such new laws, regulations, rules, or implementation and interpretation comes into effect, we will take all reasonable measures and actions to comply and to minimize the adverse effect of such laws on us.
If any such new laws, regulations, rules, or implementation and interpretation comes into effect, we will take all reasonable measures and actions to comply and to minimize the adverse effect of such laws on us.
In the event that we are subject to any mandatory cybersecurity review and other specific actions required by the CAC, we face uncertainty as to whether any clearance or other required actions can be timely completed, or at all.
In the event that we are subject to any mandatory cybersecurity review and other specific actions required by the CAC, we face uncertainty as to whether any clearance or other required actions can be timely completed, or at all.
The market price of our common stocks on the Nasdaq Capital Market may fluctuate as a result of a number of factors, some of which are beyond our control, including, but not limited to: ● variations in our actual and perceived operating results; ● news regarding gains or losses of customers or partners by us or our competitors; ● news regarding gains or losses of key personnel by us or our competitors; ● announcements of competitive developments, acquisitions or strategic alliances in our industry by us or our competitors; ● changes in earnings estimates or buy/sell recommendations by financial analysts; ● potential litigation; ● the imposition of fines or penalties related to our activities in the PRC and failure to comply with applicable rules and regulations; ● general market conditions or other developments affecting us or our industry; and ● the operating and stock price performance of other companies, other industries and other events or factors beyond our control.
The market price of our Common Stock on the Nasdaq Capital Market may fluctuate as a result of a number of factors, some of which are beyond our control, including, but not limited to: ● variations in our actual and perceived operating results; ● news regarding gains or losses of customers or partners by us or our competitors; ● news regarding gains or losses of key personnel by us or our competitors; ● announcements of competitive developments, acquisitions or strategic alliances in our industry by us or our competitors; ● changes in earnings estimates or buy/sell recommendations by financial analysts; ● potential litigation; ● the imposition of fines or penalties related to our activities in the PRC and failure to comply with applicable rules and regulations; ● general market conditions or other developments affecting us or our industry; and ● the operating and stock price performance of other companies, other industries and other events or factors beyond our control.
Since 2016, PRC governmental authorities have imposed more stringent restrictions on outbound capital flows, including heightened scrutiny over “irrational” overseas investments for certain industries, as well as over four kinds of “abnormal” offshore investments, which are: ● investments through enterprises established for only a few months without substantive operation; ● investments with amounts far exceeding the registered capital of onshore parent and not supported by its business performance shown on financial statements; ● investments in targets which are unrelated to onshore parent’s main business; and ● investments with abnormal sources of Renminbi funding suspected to be involved in illegal transfer of assets or illegal operation of underground banking. 37 On January 26, 2017, SAFE promulgated the Circular on Further Improving Reform of Foreign Exchange Administration and Optimizing Genuineness and Compliance Verification, which tightened the authenticity and compliance verification of cross-border transactions and cross-border capital flow, including requiring banks to verify board resolutions, tax filing forms and audited financial statements before wiring foreign invested enterprises’ foreign exchange dividend distribution of over US$50,000.
Since 2016, PRC governmental authorities have imposed more stringent restrictions on outbound capital flows, including heightened scrutiny over “irrational” overseas investments for certain industries, as well as over four kinds of “abnormal” offshore investments, which are: ● investments through enterprises established for only a few months without substantive operation; ● investments with amounts far exceeding the registered capital of onshore parent and not supported by its business performance shown on financial statements; ● investments in targets which are unrelated to onshore parent’s main business; and ● investments with abnormal sources of Renminbi funding suspected to be involved in illegal transfer of assets or illegal operation of underground banking. 36 On January 26, 2017, SAFE promulgated the Circular on Further Improving Reform of Foreign Exchange Administration and Optimizing Genuineness and Compliance Verification, which tightened the authenticity and compliance verification of cross-border transactions and cross-border capital flow, including requiring banks to verify board resolutions, tax filing forms and audited financial statements before wiring foreign invested enterprises’ foreign exchange dividend distribution of over US$50,000.
If we do not obtain any such additional financing, it may be difficult to effectively realize our long-term strategic goals and objectives. 42 Any additional capital raised through the sale of equity or equity-backed securities may dilute our stockholders’ ownership percentages and could also result in a decrease in the market value of our equity securities.
If we do not obtain any such additional financing, it may be difficult to effectively realize our long-term strategic goals and objectives. Any additional capital raised through the sale of equity or equity-backed securities may dilute our stockholders’ ownership percentages and could also result in a decrease in the market value of our equity securities.
In addition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC-resident enterprises are incorporated. 39 PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds of our offerings to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.
In addition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC-resident enterprises are incorporated. 38 PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds of our offerings to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.
In addition, there is uncertainty as to whether the courts of China would recognize or enforce judgments of U.S. courts. Foreign exchange fluctuations may affect our business. We accept the payment for services in Chinese Yuan (CNY), Hong Kong Dollars (HKD), and U.S. Dollars (USD).
In addition, there is uncertainty as to whether the courts of China would recognize or enforce judgments of U.S. courts. Foreign exchange fluctuations may affect our business. We accept the payment for services in Chinese Yuan (CNY or RMB), Hong Kong Dollars (HKD), and U.S. Dollars (USD).
In addition, he must receive the purchaser’s written consent to the transaction prior to the purchase. He must also provide certain written disclosures to the purchaser. Consequently, the “penny stock” rules may restrict the ability of broker/dealers to sell our securities, and may negatively affect the ability of holders of shares of our common stock to resell them.
In addition, the broker/dealer must receive the purchaser’s written consent to the transaction prior to the purchase. He must also provide certain written disclosures to the purchaser. Consequently, the “penny stock” rules may restrict the ability of broker/dealers to sell our securities, and may negatively affect the ability of holders of shares of our common stock to resell them.
Our heavy reliance on our largest suppliers for the supply of our products will have significant impact on our business and results of operation in the event of any shortage of, or delay in the supply. 19 Any labor shortages, increased labor costs or other factors affecting labor supply for our production materials may materially and adversely affect our business operations.
Our heavy reliance on our largest suppliers for the supply of our products will have significant impact on our business and results of operation in the event of any shortage of, or delay in the supply. Any labor shortages, increased labor costs or other factors affecting labor supply for our production materials may materially and adversely affect our business operations.
If we are subject to late fees or fines in relation to the underpaid employee benefits, our financial condition and results of operations may be adversely affected. 24 A recent joint statement by the SEC and the Public Company Accounting Oversight Board (United States), or the “PCAOB,” proposed rule changes submitted by Nasdaq, and the newly enacted “Holding Foreign Companies Accountable Act” all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB.
If we are subject to late fees or fines in relation to the underpaid employee benefits, our financial condition and results of operations may be adversely affected. 23 A recent joint statement by the SEC and the Public Company Accounting Oversight Board (United States), or the “PCAOB,” proposed rule changes submitted by Nasdaq, and the newly enacted “Holding Foreign Companies Accountable Act” all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB.
Meanwhile, the Implementation Regulation of the Foreign Investment Law and the Measures for Reporting of Information on Foreign Investment came into effect as of January 1, 2020, which clarified and elaborated the relevant provisions of the Foreign Investment Law . 38 The Foreign Investment Law sets out the basic regulatory framework for foreign investments and proposes to implement a system of pre-entry national treatment with a negative list for foreign investments, pursuant to which (i) foreign entities and individuals are prohibited from investing in the areas that are not open to foreign investments, (ii) foreign investments in the restricted industries must satisfy certain requirements under the law, and (iii) foreign investments in business sectors outside of the negative list will be treated equally with domestic investments.
Meanwhile, the Implementation Regulation of the Foreign Investment Law and the Measures for Reporting of Information on Foreign Investment came into effect as of January 1, 2020, which clarified and elaborated the relevant provisions of the Foreign Investment Law . 37 The Foreign Investment Law sets out the basic regulatory framework for foreign investments and proposes to implement a system of pre-entry national treatment with a negative list for foreign investments, pursuant to which (i) foreign entities and individuals are prohibited from investing in the areas that are not open to foreign investments, (ii) foreign investments in the restricted industries must satisfy certain requirements under the law, and (iii) foreign investments in business sectors outside of the negative list will be treated equally with domestic investments.
On December 29, 2022, the Consolidated Appropriations Act was signed into law by President Biden, which contained, among other things, an identical provision to AHFCAA and amended the HFCAA by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three. 31 The PCAOB continues to demand complete access in mainland China and Hong Kong moving forward and has resumed regular inspections since March 2023.
On December 29, 2022, the Consolidated Appropriations Act was signed into law by President Biden, which contained, among other things, an identical provision to AHFCAA and amended the HFCAA by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three. 30 The PCAOB continues to demand complete access in mainland China and Hong Kong moving forward and has resumed regular inspections since March 2023.
We are exposed to concentration risk of heavy reliance on our major supplier for the supply of our products, and any shortage of, or delay in, the supply may significantly impact on our business and results of operation.
We are exposed to concentration risk due to heavy reliance on our major supplier for the supply of our products, and any shortage of, or delay in, the supply may significantly impact our business and results of operation.
If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. 28 General Risks Associated with Business Operations in China The PRC government may intervene or influence our business operations at any time or may exert more control over offerings conducted overseas and foreign investment in China based issuers, which could result in a material change in our business operations and/or the value of our securities.
If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. 27 General Risks Associated with Business Operations in China The PRC government may intervene or influence our business operations at any time or may exert more control over offerings conducted overseas and foreign investment in China based issuers, which could result in a material change in our business operations and/or the value of our securities.
Given such uncertainty, we may be further required to suspend our relevant business, shut down our website, or face other penalties, which could materially and adversely affect our business, financial condition, and results of operations. 35 PRC regulations relating to investments in offshore companies by PRC residents may subject our PRC-resident beneficial owners or our PRC Subsidiaries to liability or penalties, limit our ability to inject capital into our PRC Subsidiaries or limit our PRC Subsidiaries’ ability to increase their registered capital or distribute profits.
Given such uncertainty, we may be further required to suspend our relevant business, shut down our website, or face other penalties, which could materially and adversely affect our business, financial condition, and results of operations. 34 PRC regulations relating to investments in offshore companies by PRC residents may subject our PRC-resident beneficial owners or our PRC Subsidiaries to liability or penalties, limit our ability to inject capital into our PRC Subsidiaries or limit our PRC Subsidiaries’ ability to increase their registered capital or distribute profits.
These types of actions and attacks could disrupt our delivery of products and services or make them unavailable, which could damage our reputation, force us to incur significant expenses in remediating the resulting impacts, expose us to uninsured liabilities, subject us to lawsuits, fines or sanctions, distract our management or increase our costs of doing business. 23 Our encryption of data and other protective measures may not prevent unauthorized access or use of sensitive data.
These types of actions and attacks could disrupt our delivery of products and services or make them unavailable, which could damage our reputation, force us to incur significant expenses in remediating the resulting impacts, expose us to uninsured liabilities, subject us to lawsuits, fines or sanctions, distract our management or increase our costs of doing business. 22 Our encryption of data and other protective measures may not prevent unauthorized access or use of sensitive data.
We may be exposed to concentration risk of heavy reliance on third-party contractors for our logistic business, and any shortage of third-party contractors may significantly impact on our business and results of operation.
We may be exposed to concentration risk due to heavy reliance on third-party contractors for our logistic business, and any shortage of third-party contractors may significantly impact our business and results of operation.
Consequently, the price of the stock is often volatile and you may not be able to buy or sell the stock when you want to. 41 The issuances of our Common Stock to the Selling Stockholders or the Placement Agent upon conversion of Warrants or exercise of the Notes, as the case may be, will cause dilution to our existing stockholders, and the sale of the shares of Common Stock acquired by the Selling Stockholders or the Placement Agent, or the perception that such sales may occur, could cause the price of our Common Stock to fall.
Consequently, the price of the stock is often volatile and you may not be able to buy or sell the stock when you want to. 40 The issuances of our Common Stock to the Selling Stockholders or the Placement Agent upon conversion of Warrants or exercise of the Notes, as the case may be, will cause dilution to our existing stockholders, and the sale of the shares of Common Stock acquired by the Selling Stockholders or the Placement Agent, or the perception that such sales may occur, could cause the price of our Common Stock to fall.
The violation of labor, environmental or other laws by third-party vendors used by us, or the divergence of a third-party vendor’s or partner’s labor or environmental practices from those generally accepted as ethical or appropriate, could interrupt or otherwise disrupt the shipment of finished products to us or damage our reputation. 20 Large and similar sized competitors could steal our market share by offering lower prices.
The violation of labor, environmental or other laws by third-party vendors used by us, or the divergence of a third-party vendor’s or partner’s labor or environmental practices from those generally accepted as ethical or appropriate, could interrupt or otherwise disrupt the shipment of finished products to us or damage our reputation. 19 Large and similar sized competitors could steal our market share by offering lower prices.
If Mr. Hong Zhida cannot serve the Company or is no longer willing to do so, the Company may not be able to find alternatives in a timely manner or at all. This would likely result in severe damage to our business operations and would have an adverse material impact on our financial position and operational results.
Hong Zhida cannot serve the Company or is no longer willing to do so, the Company may not be able to find alternatives in a timely manner or at all. This would likely result in severe damage to our business operations and would have an adverse material impact on our financial position and operational results.
Pursuant to each annual determination by the PCAOB, the SEC will, on an annual basis, identify issuers that have used non-inspected audit firms and thus are at risk of such suspensions in the future. 25 The PCAOB is currently unable to conduct inspections in China without the approval of Chinese government authorities.
Pursuant to each annual determination by the PCAOB, the SEC will, on an annual basis, identify issuers that have used non-inspected audit firms and thus are at risk of such suspensions in the future. 24 The PCAOB is currently unable to conduct inspections in China without the approval of Chinese government authorities.
The PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions may be cited for reference but have limited precedential value. 33 In 1979, the PRC government began to promulgate a comprehensive system of laws, rules and regulations governing economic matters in general.
The PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions may be cited for reference but have limited precedential value. 32 In 1979, the PRC government began to promulgate a comprehensive system of laws, rules and regulations governing economic matters in general.
The requirement of employee benefit plans has not been implemented consistently by the local governments in China given the different levels of economic development in different locations. As of March 31, 2024, we have made adequate employee benefit payments in strict compliance with the relevant PRC regulations for and on behalf of our employees.
The requirement of employee benefit plans has not been implemented consistently by the local governments in China given the different levels of economic development in different locations. As of March 31, 2025, we have made adequate employee benefit payments in strict compliance with the relevant PRC regulations for and on behalf of our employees.
Any non-compliance could result in penalties or other significant legal liabilities. 29 We cannot assure you that PRC regulatory agencies, including the CAC, would take the same view as we do, and there is no assurance that we can fully or timely comply with such laws.
Any non-compliance could result in penalties or other significant legal liabilities. 28 We cannot assure you that PRC regulatory agencies, including the CAC, would take the same view as we do, and there is no assurance that we can fully or timely comply with such laws.
In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of the shares. 40 We may never be able to pay dividends and are unlikely to do so.
In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of the shares. 39 We may never be able to pay dividends and are unlikely to do so.
These factors and any corresponding price fluctuations may materially and adversely affect the market price of our common stocks and result in substantial losses being incurred by our investors. In the past, following periods of market volatility, public company stockholders have often instituted securities class action litigation.
These factors and any corresponding price fluctuations may materially and adversely affect the market price of our Common Stock and result in substantial losses being incurred by our investors. In the past, following periods of market volatility, public company stockholders have often instituted securities class action litigation.
If we are unable to control the reliance of subcontractors efficiently and effectively, our business prospects and results of operations may be materially and adversely affected. 21 Our insurance may not be sufficient. We carry insurance that we consider adequate in regard to the nature of the covered risks and the costs of coverage.
If we are unable to control the reliance of subcontractors efficiently and effectively, our business prospects and results of operations may be materially and adversely affected. 20 Our insurance may not be sufficient. We carry insurance that we consider adequate in regard to the nature of the covered risks and the costs of coverage.
The Cybersecurity Review Measures that took effect from February 15, 2022 stipulates that an internet platform operator who possesses more than 1 million users’ personal information must report to the Office of Cybersecurity Review for a cybersecurity review when seeking listings in other nations.
The Cybersecurity Review Measures that took effect from February 15, 2022 stipulate that an internet platform operator who possesses more than 1 million users’ personal information must report to the Office of Cybersecurity Review for a cybersecurity review when seeking listings in other nations.
The lack of sufficient revenue will have a negative effect on the ability of our company to continue operations and could force us to cease operations. We may be adversely affected by the performance of third-party contractors. We engaged third-party contractors to carry out logistics services.
The lack of sufficient revenue will have a negative effect on the ability of our company to continue operations and could force us to cease operations. We may be adversely affected by the performance of third-party contractors. We engage third-party contractors to carry out logistics services.
Therefore, foreign exchange fluctuations may influence our business in unpredictable ways. 32 The value of the Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economic conditions and the foreign exchange policy adopted by the PRC government.
Therefore, foreign exchange fluctuations may influence our business in unpredictable ways. 31 The value of the Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economic conditions and the foreign exchange policy adopted by the PRC government.
These risks may have a material adverse effect on our business, financial condition and results of operations. 36 We may be treated as a resident enterprise for PRC tax purposes under the PRC Enterprise Income Tax Law, and we may therefore be subject to PRC income tax on our global income.
These risks may have a material adverse effect on our business, financial condition and results of operations. 35 We may be treated as a resident enterprise for PRC tax purposes under the PRC Enterprise Income Tax Law, and we may therefore be subject to PRC income tax on our global income.
This could cause our results of operations to be materially adversely affected, reduce our revenues and cause the value of our securities to decline in value. 27 We may require additional financing in the future and our operations could be curtailed if we are unable to obtain required additional financing when needed.
This could cause our results of operations to be materially adversely affected, reduce our revenues and cause the value of our securities to decline in value. 26 We may require additional financing in the future and our operations could be curtailed if we are unable to obtain required additional financing when needed.
Applicable PRC laws, rules and regulations also require certain merger and acquisition transactions to be subject to security review. 34 Our business may be subject to a variety of PRC laws and other obligations regarding cybersecurity and data protection.
Applicable PRC laws, rules and regulations also require certain merger and acquisition transactions to be subject to security review. 33 Our business may be subject to a variety of PRC laws and other obligations regarding cybersecurity and data protection.
Our independent registered public accounting firm issued an audit opinion on the financial statements included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2022.
Our independent registered public accounting firm issued an audit opinion on the financial statements included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025.
However, we could not assure you that the production facilities and logistic points will always operate normally in the future. We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.
However, we cannnot assure you that the production facilities and logistic points will always operate normally in the future. We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.
However, our top customers are not obligated in any way to continue to provide us with new businesses in the future at a level similar to that in the past or at all.
However, our top customers are not obligated in any way to continue to provide us with new business in the future at a level similar to that in the past or at all.
The SEC is assessing how to implement other requirements of the HFCAA, including the listing and trading prohibition requirements described above. 30 Furthermore, on June 22, 2021, the U.S.
The SEC is assessing how to implement other requirements of the HFCAA, including the listing and trading prohibition requirements described above. 29 Furthermore, on June 22, 2021, the U.S.
Future price increases in raw materials or changes in the supply of raw materials may materially and adversely affect our business, financial condition and results of operations. Our top customers accounted for a major portion of our total revenue for the years ended March 31, 2024 and 2023 and may materially adversely affect our financial condition and results of operations.
Future price increases in raw materials or changes in the supply of raw materials may materially and adversely affect our business, financial condition and results of operations. 18 Our top customers accounted for a major portion of our total revenue for the years ended March 31, 2025 and 2024 and may materially adversely affect our financial condition and results of operations.
As of the date of this prospectus, these new laws and guidelines have not impacted the Company’s ability to conduct its business, accept foreign investments, or list and trade on a U.S. or other foreign exchange.
As of the date of this Form 10K, these new laws and guidelines have not impacted the Company’s ability to conduct its business, accept foreign investments, or list and trade on a U.S. or other foreign exchange.
The market price of our common stocks may be subject to fluctuation and you could lose all or part of your investment.
The market price of our Common Stock may be subject to fluctuation and you could lose all or part of your investment.
The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB is unable to inspect or investigate completely because of a position taken by an authority in a foreign jurisdiction.
The rules apply to registrants that the SEC identifies as having filed an Form 10-K with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB is unable to inspect or investigate completely because of a position taken by an authority in a foreign jurisdiction.
During the years ended March 31, 2024 and 2023, approximately 100.0% and 100.0% of total inventory purchases were from the Company’s five largest suppliers, respectively. Our business, financial condition and operating results depend on the continuous supply of products from our largest suppliers and our continuous supplier-customer relationship with them.
During the years ended March 31, 2025 and 2024, approximately 41.39% and 100.0% of total inventory purchases were from the Company’s five largest suppliers, respectively. Our business, financial condition and operating results depend on the continuous supply of products from our largest suppliers and our continuous supplier-customer relationship with them.
The Company relied on a few subcontractors for our logistic business, in which the subcontracting fees to our largest contractor represented approximately 42.0% and 25.2% of total cost of revenues for our logistics service segment for the years ended March 31, 2024 and 2023, respectively.
The Company relied on a few subcontractors for our logistic business, in which the subcontracting fees to our largest contractor represented approximately 5.2% and 42.0% of total cost of revenues for our logistics service segment for the years ended March 31, 2025 and 2024, respectively.
Such uncertainty could cause the market price of our Ordinary Shares to be materially and adversely affected. There are uncertainties under the PRC Securities Law relating to the procedures and requisite timing for the U.S. securities regulatory agencies to conduct investigations and collect evidence within the territory of the PRC.
Such uncertainty could cause the market price of our Common Stock to be materially and adversely affected. There are uncertainties under the PRC Securities Law relating to the procedures and requisite timing for the U.S. securities regulatory agencies to conduct investigations and collect evidence within the territory of the PRC.
As of the date of this annual report, we are not aware of any implementing rules or regulations which have been published regarding application of Article 177. As advised by our PRC counsel, Article 177 is only applicable where the activities of overseas authorities constitute a direct investigation or evidence collection by such authorities within the territory of the PRC.
As of the date of this Form 10-K, we are not aware of any implementing rules or regulations which have been published regarding application of Article 177. As advised by our PRC counsel, Article 177 is only applicable where the activities of overseas authorities constitute a direct investigation or evidence collection by such authorities within the territory of the PRC.
However, there is no assurance that the U.S. securities regulatory agencies will succeed in establishing such cross-border cooperation in this particular case and/or establish such cooperation in a timely manner. 26 Furthermore, as Article 177 is a recently promulgated provision and, as the date of this annual report, there have not been implementing rules or regulations regarding the application of Article 177, it remains unclear as to how it will be interpreted, implemented or applied by the Chinese Securities Regulatory Commission or other relevant government authorities.
However, there is no assurance that the U.S. securities regulatory agencies will succeed in establishing such cross-border cooperation in this particular case and/or establish such cooperation in a timely manner. 25 Furthermore, as Article 177 is a recently promulgated provision and, as the date of this Form 10-K, there have not been implementing rules or regulations regarding the application of Article 177, so it remains unclear as to how it will be interpreted, implemented or applied by the Chinese Securities Regulatory Commission or other relevant government authorities.
As confirmed by our PRC counsel at the date of September 2, 2022, we are not be subject to the cybersecurity review by the CAC for overseas public offerings of our securities to foreign investors, given that: (i) our products and services are offered not directly to individual users but through our institutional customers; (ii) we do not possess a large amount of personal information in our business operations; and (iii) data processed in our business does not have a bearing on national security and thus may not be classified as core or important data by the authorities.
We are not be subject to the cybersecurity review by the CAC for overseas public offerings of our securities to foreign investors, given that: (i) our products and services are offered not directly to individual users but through our institutional customers; (ii) we do not possess a large amount of personal information in our business operations; and (iii) data processed in our business does not have a bearing on national security and thus may not be classified as core or important data by the authorities.
The Renminbi is currently convertible under the “current account,” which includes dividends, trade and service-related foreign exchange transactions, but requires approval from or registration with appropriate government authorities or designated banks under the “capital account,” which includes foreign direct investment and loans, including loans we may secure from our onshore subsidiaries.
Substantially all of our revenue is denominated in Renminbi. The Renminbi is currently convertible under the “current account,” which includes dividends, trade and service-related foreign exchange transactions, but requires approval from or registration with appropriate government authorities or designated banks under the “capital account,” which includes foreign direct investment and loans, including loans we may secure from our onshore subsidiaries.
In 2016 and 2017, the value of the Renminbi depreciated approximately 7.2% and appreciated 6.3% against the U.S. dollar, respectively. From April 2023 through the end of March 2024, the value of the Renminbi depreciated by approximately 4.6% against the U.S. dollar.
In 2016 and 2017, the value of the Renminbi depreciated approximately 7.2% and appreciated 6.3% against the U.S. dollar, respectively. From April 2024 through the end of March 2025, the value of the Renminbi depreciated by approximately 1.2% against the U.S. dollar.
Our auditor, Pan-China Singapore, the independent registered public accounting firm that issued the audit report included in this Annual Report, is subject to PCAOB inspections. Pan-China Singapore is headquartered in Singapore and there are no limitations in Singapore on PCAOB inspections.
Our auditor, Pan-China Singapore PAC, the independent registered public accounting firm that issued the audit report included in this Form 10-K, is subject to PCAOB inspections. Pan-China Singapore PAC is headquartered in Singapore and there are no limitations in Singapore on PCAOB inspections.
As confirmed by our PRC counsel at the date of September 2, 2022, the business of our subsidiaries until our registration are not subject to cybersecurity review with the Cyberspace Administration of China, or CAC, given that: (i) our products and services are offered not directly to individual users but through our institutional customers; (ii) we do not possess a large amount of personal information in our business operations; and (iii) data processed in our business does not have a bearing on national security and thus may not be classified as core or important data by the authorities.
The business of our subsidiaries until this Form 10K are not subject to cybersecurity review with the Cyberspace Administration of China, or CAC, given that: (i) our products and services are offered not directly to individual users but through our institutional customers; (ii) we do not possess a large amount of personal information in our business operations; and (iii) data processed in our business does not have a bearing on national security and thus may not be classified as core or important data by the authorities.
Our independent registered public accounting firm’s audit documentation related to their audit reports included in this prospectus include audit documentation located in the PRC.
Our independent registered public accounting firm’s audit documentation related to their audit reports included in this Form 10-K include audit documentation located in the PRC.
The purchase of raw materials accounted for a substantial amount of our total purchases. The price of finished fabric and yarns can be volatile and affected by factors such as weather, industry demand and supply. We cannot assure you that we can fully pass on the increased cost in raw materials to our customers.
The price of finished fabric and yarns can be volatile and affected by factors such as weather, industry demand and supply. We cannot assure you that we can fully pass on the increased cost in raw materials to our customers.
The increase in subcontracting fee to the largest contractor was mainly to optimize resources and cost efficiencies. We have not experienced any disputes with our subcontractors, and we believe we maintain good relationships with our contract logistic service provider.
The decrease in subcontracting fee to the largest contractor was mainly due to decrease use of subcontractors. We have not experienced any disputes with our subcontractors, and we believe we maintain good relationships with our contract logistic service provider.
Our success is dependent upon the continued contributions made by our CEO and President, Mr. Hong Zhida. We rely on his expertise in business operations when we are developing new products and services. The Company has no “Key Man” insurance to cover the resulting losses in the event that any of our officer or directors should die or resign.
We rely on his expertise in business operations when we are developing new products and services. The Company has no “Key Man” insurance to cover the resulting losses in the event that any of our officer or directors should die or resign. If Mr.
Subcontracting fees for our logistics business for the year ended March 31, 2024 increased to approximately $1.5 million from $1.1 million for the year ended March 31, 2023, representing an increase of approximately 33.0%. Subcontracting fees accounted for 34.9% and 23.24% of our total logistics business revenue in the years ended March 31, 2024 and 2023, respectively.
Subcontracting fees for our logistics business for the year ended March 31, 2025 decreased to approximately $0.2 million from $1.5 million for the year ended March 31, 2024, representing an decrease of approximately 89.0%. Subcontracting fees accounted for 5.5% and 34.9% of our total logistics business revenue in the years ended March 31, 2025 and 2024, respectively.
The auditor of the Company, Marcum Asia CPAs LLP, is not among the auditor firms listed on the determination list issued by the PCAOB, which notes all of the auditor firms that the PCAOB is not able to inspect.
The auditor of the Company, Pan-China Singapore PAC, is not among the auditor firms listed on the determination list issued by the PCAOB, which notes all of the auditor firms that the PCAOB is not able to inspect.
Our common stocks were first offered publicly in our IPO in August 2022 at a price of $5.00 per share, and our common stocks have subsequently traded as high as $656.54 per share and as low as $0.78 per share as of the date of this Annual Report.
Our Common Stock was first offered publicly in our IPO in August 2022 at a price of $5.00 per share, and our Common Stock has subsequently traded as high as $656.54 per share and as low as $0.78 per share as of the date of this Form 10-K.
Our utilization of these delivery services for shipments is subject to risks, including increases in labor costs and fuel prices, which would increase our shipping costs, and associate strikes and inclement weather, which may impact our transportation providers’ ability to provide delivery services that adequately meet our shipping needs. 18 Future price increases in raw materials or changes in the supply of raw materials may materially and adversely affect our business, financial condition and results of operations.
Our utilization of these delivery services for shipments is subject to risks, including increases in labor costs and fuel prices, which would increase our shipping costs, and associate strikes and inclement weather, which may impact our transportation providers’ ability to provide delivery services that adequately meet our shipping needs.
We (Addentax Group Corp.) are a Nevada holding company with no material operations of our own. We conduct substantially all of our operations through the operating companies established in the PRC, primarily Shenzhen Qianhai Yingxi Industrial Chain Service Co., Ltd. (“YX”), our wholly owned subsidiary and its subsidiaries.
We (Addentax Group Corp.) are a Nevada holding company with no material operations of our own. We conduct substantially all of our operations through the operating companies established in the PRC, primarily YX, our wholly owned subsidiary and its subsidiaries. We are a holding company and do not directly own any substantive business operations in China.
For the year ended March 31, 2024, two customers accounted for approximately 73.88% and 22.13% of the Company’s total garment manufacturing revenues. For the year ended March 31, 2023, two customers accounted for approximately 41.23% and 17.23%, respectively, of the Company’s total garment manufacturing revenues.
For the year ended March 31, 2025, one customer accounted for approximately 54.1% of the Company’s total garment manufacturing revenues. For the year ended March 31, 2024, two customers accounted for approximately 73.9% and 22.1%, respectively, of the Company’s total garment manufacturing revenues.
For the year ended March 31, 2024, one customer accounted for approximately 19.95% of the Company’s total logistic services revenues. For the year ended March 31, 2023, one customer accounted for approximately 20.39% of the Company’s total logistic services revenues.
For the year ended March 31, 2025, two customers accounted for approximately 16.7% and 14.3% of the Company’s total logistic services revenues. For the year ended March 31, 2024, one customer accounted for approximately 20.0% of the Company’s total logistic services revenues.
In addition, we may incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we issue, such as convertible notes and warrants, which may adversely impact our financial condition.
In addition, we may incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs.
Future sales of substantial amounts of the shares of common stock by existing stockholders could adversely affect the price of our common stock.
We may also be required to recognize non-cash expenses in connection with certain securities we issue, such as convertible notes and warrants, which may adversely impact our financial condition. 41 Future sales of substantial amounts of the shares of common stock by existing stockholders could adversely affect the price of our common stock.
Removed
Such tenant-related risks could impact our cash flow and financial performance. Natural disasters, public health crises or other catastrophic events may significantly limit our ability to conduct business as normal, disrupt our business operation and materially affect our financial condition.
Added
Future price increases in raw materials or changes in the supply of raw materials may materially and adversely affect our business, financial condition and results of operations. The purchase of raw materials accounted for a substantial amount of our total purchases.
Removed
Our operations, and the operations of our new business segment of property management and subleasing, are vulnerable to interruptions by natural disasters, public health crises and catastrophic events. For example, the outbreak of COVID-19 pandemic caused the Chinese government to take unprecedented measures to contain the virus, such as lock-down of cities, nationwide travel restriction and compulsory quarantine requirements.
Removed
During the outbreak, we had to temporarily close our office facilities, restrict employee travel, switch to online virtual meetings or even cancel meetings with partners. By the end of 2022, the control measures for the COVID-19 epidemic prevention gradually liberalized in the PRC.
Removed
Any significant disruption resulting from this or similar epidemics on a large scale or over a prolonged period of time could cause significant disruption to our business until we would be able to resume normal business operations, negatively affecting our business, results of operations and financial condition. 22 In our property management and subleasing segment, disruptions from natural disasters or health crises could lead to tenant defaults, lease terminations, or reduced occupancy rates.
Removed
We are a holding company and do not directly own any substantive business operations in China. Substantially all of our revenue is denominated in Renminbi.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe are not aware of any risks from cybersecurity threats, including as a result of any cybersecurity incidents, which have materially affected or are reasonably likely to materially affect our Group, including our business strategy, results of operations, or financial condition. Refer to “Item 1A.
Biggest changeWe are no t aware of any risks from cybersecurity threats, including as a result of any cybersecurity incidents, which have materially affected or are reasonably likely to materially affect our Group, including our business strategy, results of operations, or financial condition. Refer to “Item 1A.
Risk Factors— Risks Associated with Our Company — Unauthorized disclosure, destruction or modification of data, through cybersecurity breaches, computer viruses or otherwise or disruption of our services could expose us to liability, protracted and costly litigation and damage our reputation”. 43 Cybersecurity Governance Our Board of Directors holds oversight responsibility over our Group’s risk management and strategy, including material risks related to cybersecurity threats.
Risk Factors— Risks Associated with Our Company — Unauthorized disclosure, destruction or modification of data, through cybersecurity breaches, computer viruses or otherwise or disruption of our services could expose us to liability, protracted and costly litigation and damage our reputation”. 42 Cybersecurity Governance Our Board of Directors holds oversight responsibility over our Group’s risk management and strategy, including material risks related to cybersecurity threats.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following table sets forth a summary of certain information regarding our leased properties: Property Type Address Monthly Rental (RMB) Size (Square Meter) Expiration date Manufacturing factory Room 501, No. 5 Luotang Road, Dongcheng District, Dongguan, Guangdong, PRC 4,400 600 December 31, 2024 Principal Office Kingkey 100, Block A, Room 4805, Luohu District, Shenzhen, Guangdong, China 82,000 303 July 31, 2025 Additional office Kingkey 100, Block D, Room 1628, Luohu District, Shenzhen, Guangdong, China 12,760 116 July 18, 2024 Additional office No. 41-46, Building D, Block B, Jinpeng Distribution Center, No. 536, Sha Ping North Rd, Danping Committee, Nanwan St, Longgang, Shenzhen, Guangdong, PRC 45,000 720 January 31, 2025 Warehouse and additional office No. 3 Ping’an Avenue, Pinghu Street, Longgang District, Shenzhen, Guangdong, PRC 30,000 605 May 31, 2024 (1) (1) The Company has been negotiating on the renewal of the lease agreement for the property, and is currently continuing to use this property after expiry of the previous lease agreement.
Biggest changeThe following table sets forth a summary of certain information regarding our leased properties: Property Type Address Monthly Rental (RMB) Size (Square Meter) Expiration date Manufacturing factory Room 501, No. 5 Luotang Road, Dongcheng District, Dongguan, Guangdong, PRC 4,400 600 December 31, 2027 Principal Office Kingkey 100, Block A, Room 4805, Luohu District, Shenzhen, Guangdong, China 82,000 303 July 31, 2025 Additional office No. 41-46, Building D, Block B, Jinpeng Distribution Center, No. 536, Sha Ping North Rd, Danping Committee, Nanwan St, Longgang, Shenzhen, Guangdong, PRC 45,600 720 August 10, 2025 Warehouse and additional office No. 3 Ping’an Avenue, Pinghu Street, Longgang District, Shenzhen, Guangdong, PRC 30,250 605 May 31, 2026 (1) (1) The Company has been negotiating on the renewal of the lease agreement for the property, and is currently continuing to use this property after expiry of the previous lease agreement.
We also have 121 logistics points and they are located in 10 provinces and 2 municipalities in the PRC.
We also have 114 logistics points and they are located in 10 provinces and 2 municipalities in the PRC.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are not presently a party to any legal proceedings that in the opinion of our management, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition, or cash flows. Item 4. Mine Safety Disclosures Not applicable. 44 PART II
Biggest changeWe are not presently a party to any legal proceedings that in the opinion of our management, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition, or cash flows. Item 4. Mine Safety Disclosures Not applicable. 43 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHolders of Our Common Stock 6,043,769 shares of common stock were issued and outstanding as of July 15, 2024. They were held by a total of 488 shareholders of record. The holders of common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders.
Biggest changeHolders of Our Common Stock 10,090,963 shares of Common Stock were issued and outstanding as of June 29, 2025. They were held by a total of 453 shareholders of record. The holders of Common Stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders.
Holders of the common stock have no preemptive rights and no right to convert their common stock into any other securities. There is no redemption or sinking fund provisions applicable to the common stock. Transfer Agent The transfer agent for the common stock is Transfer Online, Inc.
Holders of Common Stock have no preemptive rights and no right to convert their Common Stock into any other securities. There is no redemption or sinking fund provisions applicable to the Common Stock. Transfer Agent The transfer agent for the Common Stock is Transfer Online, Inc.
We have not paid any cash dividends since October 28, 2014 (inception) and do not foresee declaring any cash dividends on our common stock in the foreseeable future. 45 Securities Authorized for Issuance under Equity Compensation Plans On May 28, 2024 , our Board adopted our 2024 Equity Incentive Plan (the “2024 Equity Incentive Plan”), which was approved by our shareholders at our annual shareholders meeting on June 28, 2024.
We have not paid any cash dividends since October 28, 2014 (inception) and do not foresee declaring any cash dividends on our common stock in the foreseeable future. 44 Securities Authorized for Issuance under Equity Compensation Plans On May 28, 2024, our Board adopted our 2024 Equity Incentive Plan (the “2024 Equity Incentive Plan”), which was approved by our shareholders at our annual shareholders meeting on June 28, 2024.
The transfer agent’s address is 512 SE Salmon St., Portland, OR 97214, and its telephone number is +1 (503) 227-2950. Dividends No cash dividends were paid on our shares of common stock during the fiscal year ended March 31, 2024 and March 31, 2023.
The transfer agent’s address is 512 SE Salmon St., Portland, OR 97214, and its telephone number is +1 (503) 227-2950. Dividends No cash dividends were paid on our shares of Common Stock during the fiscal year ended March 31, 2025 and March 31, 2024.
The shares covered by the 2024 Equity Incentive Plan are 1,345,000 shares. As of June 30, 2024, there were no outstanding options to purchase any shares of common stock granted under the Plans. Options granted in the future under the Plans are within the discretion of our Board or our compensation committee.
The shares covered by the 2024 Equity Incentive Plan are 1,345,000 shares. As of June 29, 2025, there were no outstanding options to purchase any shares of common stock granted under the Plans. Options granted in the future under the Plans are within the discretion of our Board or our compensation committee.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe decrease of approximately $2.5 million was mainly due to the disposal of DY. 51 Cost of revenue 2024 2023 Increase (decrease) in 2024 compared to 2023 % Change (In U.S. dollars, except for percentages) Net revenue for garment manufacturing $ 229,539 100.0 % $ 177,549 100.0 % $ 51,990 29.3 % Raw materials 33,466 14.6 % 28,333 16.0 % 5,133 18.1 % Labor 130,231 56.7 % 97,065 54.7 % 33,166 34.2 % Other and Overhead 2,298 1.0 % 6,942 3.9 % (4,644 ) (66.9 )% Total cost of revenue for garment manufacturing 165,995 72.3 % 132,340 74.5 % 33,655 25.4 % Gross profit for garment manufacturing 63,544 27.7 % 45,209 25.5 % 18,335 40.6 % Net revenue for logistics services 4,342,326 100.0 % 4,621,125 100.0 % (278,799 ) (6.0 )% Fuel, toll and other cost of logistics services 1,881,755 43.3 % 2,428,462 52.6 % (546,707 ) (22.5 )% Subcontracting fees 1,513,533 34.9 % 1,074,846 23.2 % 438,687 40.8 % Total cost of revenue for logistics services 3,395,288 78.2 % 3,503,308 75.8 % (108,020 ) (3.1 )% Gross Profit for logistics services 947,038 21.8 % 1,117,817 24.2 % (170,779 ) (15.3 )% Net revenue for property management and subleasing 581,888 100.0 % 3,096,914 100.0 % (2,515,026 ) (81.2 )% Total cost of revenue for property management and subleasing 473,500 81.4 % 2,444,962 78.9 % (1,971,462 ) (80.6 )% Gross Profit for property management and subleasing 108,388 18.6 % 651,952 21.1 % (543,564 ) (83.4 )% Net revenue for corporate and others - 48,583 100.0 % (48,583 ) (100.0 )% Other and Overhead 3,885 22,500 46.3 % (18,615 ) (82.7 )% Total cost of revenue for corporate and others 3,885 22,500 46.3 % (18,615 ) (82.7 )% Gross profit for corporate and others (3,885 ) 26,083 53.7 % (29,968 ) (114.9 )% Total cost of revenue $ 4,038,668 78.4 % $ 6,103,110 76.8 % $ 2,064,442 33.8 % Gross profit $ 1,115,085 21.6 % $ 1,841,061 23.2 % $ (725,976 ) (39.4 )% 52 For our garment manufacturing business, we purchased the majority of our raw materials directly from numerous local fabric and accessories suppliers.
Biggest changeThe increase of approximately $0.3 million was mainly due to improved rental rate. 50 Cost of revenue 2025 2024 Increase (decrease) in 2025 compared to 2024 % Change (In U.S. dollars, except for percentages) Net revenue for garment manufacturing $ 283,042 100.0 % $ 229,539 100.0 % $ 53,503 23.3 % Raw materials 140,507 49.6 % 33,466 14.6 % 107,041 319.9 % Labor 72,134 25.5 % 130,231 56.7 % (58,097 ) (44.6 )% Other and Overhead 16,522 5.8 % 2,298 1.0 % 14,224 619.0 % Total cost of revenue for garment manufacturing 229,163 81.0 % 165,995 72.3 % 63,168 38.1 % Gross profit for garment manufacturing 53,879 19.0 % 63,544 27.7 % (9,665 ) (15.2 )% Net revenue for logistics services 3,018,325 100.0 % 4,342,326 100.0 % (1,324,001 ) (30.5 )% Fuel, toll and other cost of logistics services 1,801,302 59.7 % 1,881,755 43.3 % (80,453 ) (4.3 )% Subcontracting fees 166,488 5.5 % 1,513,533 34.9 % (1,347,045 ) (89.0 )% Total cost of revenue for logistics services 1,967,790 65.2 % 3,395,288 78.2 % (1,427,498 ) (42.0 )% Gross Profit for logistics services 1,050,535 34.8 % 947,038 21.8 % 103,497 10.9 % Net revenue for property management and subleasing 879,547 100.0 % 581,888 100.0 % 297,659 51.2 % Total cost of revenue for property management and subleasing 1,349,704 153.5 % 473,500 81.4 % 876,204 185.0 % Gross (loss) Profit for property management and subleasing (470,157 ) (53.5 )% 108,388 18.6 % (578,545 ) (533.8 )% Net revenue for corporate and others - - - (100.0 )% Other and Overhead - 3,885 (3,885 ) (82.7 )% Total cost of revenue for corporate and others - 3,885 3,885 (100.0 )% Gross profit for corporate and others - ) (3,885 ) (3,885 ) (100.0 )% Total cost of revenue $ 3,546,657 84.8 % $ 4,038,668 78.4 % $ 4,038,668 (12.2 )% Gross profit $ 634,257 15.2 % $ 1,115,085 21.6 % $ 1,115,085 (43.1 )% 51 For our garment manufacturing business, we purchased the majority of our raw materials directly from numerous local fabric and accessories suppliers.
The primary business objective for our garment manufacturing segment is to expand our customer base and improve our profit. Logistics Services Business The business objective and future plan for our logistics services segment is to establish an efficient logistic system and to build a nationwide delivery and courier network in China.
The primary business objective for our garment manufacturing segment is to expand our customer base and improve our profit. Logistics Services Business The business objective and future plan for our logistics services segment is to establish an efficient logistics system and to build a nationwide delivery and courier network in China.
The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods and services in the contract; (ii) determination of whether the promised goods and services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. 49 The 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.
The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods and services in the contract; (ii) determination of whether the promised goods and services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. 48 The 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.
We conduct our property management and subleasing operation through a wholly owned subsidiary acquired in September 2023, namely Dongguan Hongxiang Commercial Co., Ltd., a PRC company (“HX”), which is located in the Guangdong province, China. 47 Business Objectives Garment Manufacturing Business We believe the strength of our garment manufacturing business is mainly due to our consistent emphasis on exceptional quality and timely delivery.
We conduct our property management and subleasing operation through a wholly owned subsidiary acquired in September 2023, namely Dongguan Hongxiang Commercial Co., Ltd., a PRC company (“HX”), which is located in the Guangdong province, China. 46 Business Objectives Garment Manufacturing Business We believe the strength of our garment manufacturing business is mainly due to our consistent emphasis on exceptional quality and timely delivery.
Off-Balance Sheet Arrangements We have no off-balance sheet arrangements (as that term is defined in Item 303(a)(4)(ii) of Regulation S-K) as of March 31, 2024 that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Off-Balance Sheet Arrangements We have no off-balance sheet arrangements (as that term is defined in Item 303(a)(4)(ii) of Regulation S-K) as of March 31, 2025 that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
No provision for income taxes in the PRC has been made as WFOE and YX had no taxable income for the years ended March 31, 2024 and 2023. Yingxi’s operating companies are governed by the Income Tax Laws of the PRC and subject to progressive EIT rate from 5% to 15% in year ended March 31, 2024.
No provision for income taxes in the PRC has been made as WFOE and YX had no taxable income for the years ended March 31, 2025 and 2024. Yingxi’s operating companies are governed by the Income Tax Laws of the PRC and subject to progressive EIT rate from 5% to 15% in year ended March 31, 2025.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations for the years ended March 31, 2024 and 2023 should be read in conjunction with the Financial Statements and corresponding notes included in this Annual Report on Form 10-K.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations for the years ended March 31, 2025 and 2024 should be read in conjunction with the Financial Statements and corresponding notes included in this Annual Report on Form 10-K.
No provision for income taxes in Hong Kong has been made as Yingxi HK had no taxable income for the years ended March 31, 2024 and 2023. WFOE and YX were incorporated in the PRC and are subject to the PRC Enterprise Income Tax (EIT) rate is 25%.
No provision for income taxes in Hong Kong has been made as Yingxi HK had no taxable income for the years ended March 31, 2025 and 2024. WFOE and YX were incorporated in the PRC and are subject to the PRC Enterprise Income Tax (EIT) rate is 25%.
Management has not identified any other new standards that it believes will have a significant impact on the Company’s consolidated financial statements. Results of Operations for the years ended March 31, 2024 and 2023 The following tables summarize our results of operations for the years ended March 31, 2024 and 2023.
Management has not identified any other new standards that it believes will have a significant impact on the Company’s consolidated financial statements. Results of Operations for the years ended March 31, 2025 and 2024 The following tables summarize our results of operations for the years ended March 31, 2025 and 2024.
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 fiscal year. 50 The Company reviews new accounting standards as issued.
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 fiscal year. 49 The Company reviews new accounting standards as issued.
Logistics Services business For logistics services, we generally receive payments from the customers between 30 to 90 days following the date of the registration of our receipt of packages. 48 Property management and subleasing business For property management and subleasing business, we generally collect rental and management fees of the following month each month in advance.
Logistics Services business For logistics services, we generally receive payments from the customers between 30 to 90 days following the date of the registration of our receipt of packages. 47 Property management and subleasing business For property management and subleasing business, we generally collect rental and management fees of the following month each month in advance.
We conduct our logistic operations through three wholly owned subsidiaries, namely Shenzhen Xin Kuai Jie Transportation Co., Ltd (“XKJ”), Shenzhen Yingxi Peng Fa Logistic Co., Ltd (“PF”) and Shenzhen Yingxi Tongda Logistic Co., Ltd (“TD”), which are located in the Guangdong province, China.
We conduct our logistic operations through three wholly owned subsidiaries, namely Shenzhen Xin Kuai Jie Transportation Co., Ltd (“XKJ”) and Shenzhen Yingxi Peng Fa Logistic Co., Ltd (“PF”) which are located in the Guangdong province, China.
No provision for income taxes in the United States has been made as Addentax Group Corp. had no United States taxable income for the years ended March 31, 2024 and 2023. Net Profit We incurred a net loss of approximately $3.1 million and a net profit of approximately $1.3 million for the years ended March 31, 2024 and 2023, respectively.
No provision for income taxes in the United States has been made as Addentax Group Corp. had no United States taxable income for the years ended March 31, 2025 and 2024. Net Profit We incurred a net loss of approximately $5.1 million and a net loss of approximately $3.1 million for the years ended March 31, 2025 and 2024, respectively.
Revenue generated from the segment contributed approximately $0.2 million, or approximately 2.2%, of our total revenue for the year ended March 31, 2023. The low amount of sales was mainly due to insufficient customer volume, we cannot receive as large order quantity from remaining customers as before while new developed customer still at the start stage.
Revenue generated from the segment contributed approximately $0.2 million, or approximately 4.5%, of our total revenue for the year ended March 31, 2024. The low amount of sales was mainly due to insufficient customer volume, we cannot receive as large order quantity from remaining customers as before while new developed customer still at the start stage.
As of March 31, 2024, the market foreign exchange rate had decreased to RMB7.22 to one U.S. dollar. Our financial statements are translated into U.S. dollars using the closing rate method. The balance sheet items are translated into U.S. dollars using the exchange rates at the respective balance sheet dates.
As of March 31, 2025, the market foreign exchange rate had decreased to RMB7.26 to one U.S. dollar. Our financial statements are translated into U.S. dollars using the closing rate method. The balance sheet items are translated into U.S. dollars using the exchange rates at the respective balance sheet dates.
The preferential tax rates will be expired at the end of year 2025. Income taxes of the PRC companies were $11,605 and $22,143 for the year ended March 31, 2024 and 2023, respectively. The Company’s parent entity, Addentax Group Corp. is a U.S. entity and is subject to the United States federal income tax.
The preferential tax rates will be expired at the end of year 2025. Income taxes of the PRC companies were $4,649 and $11,605 for the year ended March 31, 2025 and 2024, respectively. The Company’s parent entity, Addentax Group Corp. is a U.S. entity and is subject to the United States federal income tax.
We have not experienced any disputes with our subcontractors and we believe we maintain good relationships with our contract logistic service provider. Fuel, toll and other costs for our logistics business for the year ended March 31, 2024 was approximately $1.9 million, as compared with $2.4 million for the year ended March 31, 2023.
We have not experienced any disputes with our subcontractors and we believe we maintain good relationships with our contract logistic service provider. Fuel, toll and other costs for our logistics business for the year ended March 31, 2025 was approximately $1.8 million, as compared with $1.9 million for the year ended March 31, 2024.
“ WFOE ” refers to Qianhai Yingxi Textile & Garments Co., Ltd, a wholly foreign owned enterprise in China, which is indirectly wholly owned by Addentax Group Corp. Our garment manufacturing business consists of sales made principally to wholesaler located in the PRC.
“WFOE” refers to Qianhai Yingxi Textile & Garments Co., Ltd, a wholly foreign owned enterprise in China, which is indirectly wholly owned by Addentax Group Corp. Our garment manufacturing business consists of sales made principally to wholesalers located in the PRC.
Financial Condition, Liquidity and Capital Resources As of March 31, 2024, we had cash on hand of approximately $0.8 million and restricted cash of approximately $2.8 million, total current assets of approximately $29.2 million and current liabilities of approximately $4.6 million.
Financial Condition, Liquidity and Capital Resources As of March 31, 2025, we had cash on hand of approximately $0.3 million and restricted cash of approximately $2.8 million, total current assets of approximately $29.8 million and current liabilities of approximately $4.0 million.
Our general and administrative expenses in our corporate office for the years ended March 31, 2024 and 2023 were approximately $961,771 and $973,237, respectively. General and administrative expenses consist primarily of administrative salaries, office expense, certain depreciation and amortization charges, repairs and maintenance, legal and professional fees, warehousing costs and other expenses that are not directly attributable to our revenues.
Our general and administrative expenses in our corporate office for the years ended March 31, 2025 and 2024 were approximately $1,011,522 and $961,771, respectively. General and administrative expenses consist primarily of administrative salaries, office expense, certain depreciation and amortization charges, repairs and maintenance, legal and professional fees, warehousing costs and other expenses that are not directly attributable to our revenues.
As of March 31, 2024, we provide logistic service to over 44 cities in approximately 10 provinces and 2 municipalities. We expect to develop 20 additional logistics routes in existing serving cities and improve the Company’s profit in the year 2024.
As of March 31, 2025, we provide logistics services to over 44 cities in approximately 10 provinces and 2 municipalities. We expect to develop 20 additional logistics routes in existing serving cities and improve the Company’s profit in the year 2025.
Gross profit of our property management and subleasing business for the year ended March 31, 2024 was approximately $0.1 million, representing approximately 18.6% of our total property management and subleasing business revenue.
Gross profit in our property management and subleasing business for the year ended March 31, 2024 was $0.1 million, or 18.6% of our total property management and subleasing business revenue.
Overhead and other expenses for our garment manufacturing business accounted for approximately 1.0% and 3.9% of our total garment manufacturing business revenue for the years ended March 31, 2024 and 2023, respectively. For our logistic services business, we outsource some of the business to our subcontractors. Our subcontractors are contract logistic service providers.
Overhead and other expenses for our garment manufacturing business accounted for approximately 5.8% and 1.0% of our total garment manufacturing business revenue for the years ended March 31, 2025 and 2024, respectively. For our logistic services business, we outsource some of the business to our subcontractors. Our subcontractors are contract logistic service providers.
Revenue generated from our logistics services business contributed approximately $4.3 million, or approximately 84.3%, of our total revenue for the year ended March 31, 2024. Revenue generated from the segment contributed approximately $4.6 million, or approximately 58.2%, of our total revenue for the year ended March 31, 2023. The decrease of approximately $0.3 million was mainly due to market volatility.
Revenue generated from our logistics services business contributed approximately $3.0 million, or approximately 72.2%, of our total revenue for the year ended March 31, 2025. Revenue generated from the segment contributed approximately $4.3 million, or approximately 84.3%, of our total revenue for the year ended March 31, 2024. The decrease of approximately $1.3 million was mainly due to market volatility.
It was mainly because the net loss adjusted to cash provided (used in) operating activities of fiscal year ended March 31, 2024 was approximately $0.8 million less than the amount of the fiscal year ended March 31, 2023.
It was mainly because the net loss adjusted to cash used in operating activities of fiscal year ended March 31, 2025 was approximately $0.6 million less than the amount of the fiscal year ended March 31, 2024.
Labor costs for our garment manufacturing business were approximately 56.7% of our total garment manufacturing business revenue in the year ended March 31, 2024, as compared with 54.7% in the year ended March 31, 2023. The increase in labor costs for our garment manufacturing business was mainly due to the increase of sub-contracting business in AOT.
Labor costs for our garment manufacturing business were approximately 25.5% of our total garment manufacturing business revenue in the year ended March 31, 2025, as compared with 56.7% in the year ended March 31, 2024. The decrease in labor costs for our garment manufacturing business was mainly due to the decrease of sub-contracting business in AOT.
Revenue generated from our property management and subleasing business contributed approximately $0.6 million, or approximately 11.3%, of our total revenue for the year ended March 31, 2024. Revenue generated from our property management and subleasing business contributed approximately $3.1 million, or approximately 39.0%, of our total revenue for the year ended March 31, 2023.
Revenue generated from our property management and subleasing business contributed approximately $0.9 million, or approximately 21.0%, of our total revenue for the year ended March 31, 2025. Revenue generated from our property management and subleasing business contributed approximately $0.6 million, or approximately 11.3%, of our total revenue for the year ended March 31, 2024.
Fuel, toll and other costs for our logistics business accounted for approximately 43.3% of our total service revenue for the year ended March 31, 2024, as compared with approximately 52.6% for the year ended March 31, 2023.
Fuel, toll and other costs for our logistics business accounted for approximately 59.7% of our total service revenue for the year ended March 31, 2025, as compared with approximately 43.3% for the year ended March 31, 2024.
Selling expenses consist primarily of local transportation, unloading charges and product inspection charges. 54 Our general and administrative expenses in our garment manufacturing segment for the years ended March 31, 2024 and 2023 were approximately $160,800 and $113,208, respectively.
Selling expenses consist primarily of local transportation, unloading charges and product inspection charges. 53 Our general and administrative expenses in our garment manufacturing segment for the years ended March 31, 2025 and 2024 were approximately $25,638 and $160,800, respectively.
Income Tax Expenses Income tax expense for the years ended March 31, 2024 and 2023 was $11,605 and $22,143, respectively. The Company operates in the PRC and files tax returns in the PRC jurisdictions.
Income Tax Expenses Income tax expense for the years ended March 31, 2025 and 2024 was $4,649 and $11,605, respectively. The Company operates in the PRC and files tax returns in the PRC jurisdictions.
The Company relied on a few subcontractors, which the subcontracting fees to our largest contractor represented approximately 42.0% and 25.2% of total cost of revenues for our logistics services segment for the years ended March 31, 2024 and 2023, respectively. The increase in subcontracting fee to the largest contractor was mainly to optimize resources and cost efficiencies.
The Company relied on a few subcontractors, which the subcontracting fees to our largest contractor represented approximately 5.2% and 42.0% of total cost of revenues for our logistics services segment for the years ended March 31, 2025 and 2024, respectively. The decrease in subcontracting fee to the largest contractor was mainly to decrease use of subcontractors.
Subcontracting fees for our logistics business for the year ended March 31, 2024 increased to approximately $1.5 million from $1.1 million for the year ended March 31, 2023, representing an increase of approximately 33.0%. Subcontracting fees accounted for 34.9% and 23.2% of our total logistics business revenue in the years ended March 31, 2024 and 2023, respectively.
Subcontracting fees for our logistics business for the year ended March 31, 2025 decreased to approximately $0.2 million from $1.5 million for the year ended March 31, 2024, representing an decrease of approximately 89.0%. Subcontracting fees accounted for 5.5% and 34.9% of our total logistics business revenue in the years ended March 31, 2025 and 2024, respectively.
Our subsidiaries include (i) Yingxi Industrial Chain Group Co., Ltd., a Republic of Seychelles company; (ii) Yingxi Industrial Chain Investment Co., Ltd., a Hong Kong company (“Yingxi HK”); (iii) Qianhai Yingxi Textile & Garments Co., Ltd., a PRC company; (iv) Shenzhen Qianhai Yingxi Industrial Chain Services Co., Ltd, a PRC company (“YX”), (v) Dongguan Heng Sheng Wei Garments Co., Ltd, a PRC company (“HSW”), (vi) Dongguan Yushang Clothing Co., Ltd, a PRC company (“YS”), (vii) Shantou Yi Bai Yi Garment Co., Ltd, a PRC company (“YBY”), (viii) Shenzhen Yingxi Peng Fa Logistic Co., Ltd., a PRC company (“PF”); (ix) Shenzhen Xin Kuai Jie Transportation Co., Ltd, a PRC company (“XKJ”), (x) Shenzhen Yingxi Tongda Logistic Co., Ltd, a PRC company (“TD”), (xi) Zhuang Hao Jia (Dongguan) Decoration Engineering Co.,Ltd, a PRC company (“ZHJ”), and (xii) Dongguan Aotesi Garments Co., Ltd.,, a PRC company (“AOT”), (xiii) Dongguan Hongxiang Commercial Co., Ltd., a PRC company (“HX”).
Our subsidiaries include (i) Yingxi Industrial Chain Group Co., Ltd., a Republic of Seychelles company; (ii) Yingxi Industrial Chain Investment Co., Ltd., a Hong Kong company (“Yingxi HK”); (iii) Qianhai Yingxi Textile & Garments Co., Ltd., a PRC company; (iv) Shenzhen Qianhai Yingxi Industrial Chain Services Co., Ltd, a PRC company (“YX”), (v) Dongguan Heng Sheng Wei Garments Co., Ltd, a PRC company (“HSW”), (vi) Dongguan Yushang Clothing Co., Ltd, a PRC company (“YS”), (vii) Shenzhen Yingxi Peng Fa Logistic Co., Ltd., a PRC company (“PF”); (viii) Shenzhen Xin Kuai Jie Transportation Co., Ltd, a PRC company (“XKJ”), (ix) Dongguan Aotesi Garments Co., Ltd.,, a PRC company (“AOT”), (x) Dongguan Hongxiang Commercial Co., Ltd., a PRC company (“HX”).
We conduct substantially all of our operations through our operating companies established in the PRC, primarily Shenzhen Qianhai Yingxi Industrial Chain Service Co., Ltd. (“YX”), our wholly owned subsidiary and its subsidiaries. We are not a Chinese operating company. We are a holding company and do not directly own any substantive business operations in China.
We conduct substantially all of our operations through our operating companies established in the PRC, primarily YX, our wholly owned subsidiary and its subsidiaries. We are not a Chinese operating company. We are a holding company and do not directly own any substantive business operations in China.
We conduct our garment manufacturing operations through five wholly owned subsidiaries, namely Dongguan Heng Sheng Wei Garments Co., Ltd (“HSW”), Dongguan Yushang Clothing Co., Ltd (“YS”), Shantou Yi Bai Yi Garment Co., Ltd (“YBY”), Zhuang Hao Jia (Dongguan) Decoration Engineering Co.,Ltd (“ZHJ”), and Dongguan Aotesi Garments Co., Ltd., (“AOT”) , which are located in the Guangdong province, China.
We conduct our garment manufacturing operations through five wholly owned subsidiaries, namely Dongguan Heng Sheng Wei Garments Co., Ltd (“HSW”), Dongguan Yushang Clothing Co., Ltd (“YS”) and Dongguan Aotesi Garments Co., Ltd., (“AOT”) , which are located in the Guangdong province, China.
The cost of revenue for property management and subleasing business for the year ended March 31, 2024 was $0.5 million, approximately 81.4% of our total property management and subleasing business revenue, as compared with $2.4 million, approximately 78.9% of total property management and subleasing business revenue for the year ended March 31, 2023. 53 Gross profit Gross profit of garment manufacturing business for the year ended March 31, 2024 was approximately $63,544, as compared with approximately $0.2 million for the year ended March 31, 2023.
The cost of revenue for property management and subleasing business for the year ended March 31, 2025 was $1.3 million, approximately 153.5% of our total property management and subleasing business revenue, as compared with $0.5 million, approximately 81.4% of total property management and subleasing business revenue for the year ended March 31, 2024. 52 Gross profit Gross profit of garment manufacturing business for the year ended March 31, 2025 was approximately $53,879, as compared with approximately $63,544 for the year ended March 31, 2024.
Raw materials cost for our garment manufacturing business was approximately 14.6% of our total garment manufacturing business revenue in the year ended March 31, 2024, as compared with approximately 16.0% in the year ended March 31, 2023. The decrease in raw materials cost for our garment manufacturing business was mainly due to decrease of manufacturing during renovation of the factory.
Raw materials cost for our garment manufacturing business was approximately 49.6% of our total garment manufacturing business revenue in the year ended March 31, 2025, as compared with approximately 14.6% in the year ended March 31, 2024. The increase in raw materials cost for our garment manufacturing business was mainly due to increase of manufacturing during the year.
Gross profit ratio was approximately 27.7% of revenue of the segment, as compared with approximately 25.5% for the year ended March 31, 2023. Gross profit of our logistics services business for the year ended March 31, 2024 was approximately $0.9 million and gross profit ratio was approximately 21.8%.
Gross profit ratio was approximately 19.0% of revenue of the segment, as compared with approximately 27.7% for the year ended March 31, 2024. Gross profit of our logistics services business for the year ended March 31, 2025 was approximately $1.1 million and gross profit ratio was approximately 34.8%.
The movement of operating assets and liabilities of the year ended March 31, 2024 resulted in cash inflow of approximately $0.5 million compared to cash outflow of approximately $1.5 million in the movement of operating assets and liabilities of the year ended March 31, 2023.
The movement of operating assets and liabilities of the year ended March 31, 2025 resulted in cash inflow of approximately $0.8 million compared to cash inflow of approximately $0.3 million in the movement of operating assets and liabilities of the year ended March 31, 2024.
Our general and administrative expenses in our logistics services segment for the year ended March 31, 2024 and 2023 was approximately $766,960 and $832,722, respectively. The general and administrative expenses in our property management and subleasing business were approximately $310,134 and $306,040 for the years ended March 31, 2024 and 2023.
Our general and administrative expenses in our logistics services segment for the year ended March 31, 2025 and 2024 was approximately $800,820 and $766,960, respectively. The general and administrative expenses in our property management and subleasing business were approximately $220,021 and $310,134 for the years ended March 31, 2025 and 2024.
(Loss) / Income from operations of $(201,746) and $267,359 was attributed from our property management and subleasing business for the years ended March 31, 2024 and 2023. We incurred general and administrative expenses in corporate office of approximately $965,028 and approximately $946,970 for the years ended March 31, 2024 and 2023, respectively.
Loss from operations of $954,448 and $201,746 was attributed from our property management and subleasing business for the years ended March 31, 2025 and 2024. We incurred general and administrative expenses in corporate office of approximately $1,010,967 and approximately $965,028 for the years ended March 31, 2025 and 2024, respectively.
Loss from operations of approximately $143,872 and $68,215 was attributed from our garment manufacturing segment for the years ended March 31, 2024 and 2023, respectively. Income from operations of approximately $179,450 and $284,911 was attributed from our logistics services segment for the years ended March 31, 2024 and 2023, respectively.
Loss from operations of approximately $100,715 and $143,872 was attributed from our garment manufacturing segment for the years ended March 31, 2025 and 2024, respectively. Income from operations of approximately $249,160 and $179,450 was attributed from our logistics services segment for the years ended March 31, 2025 and 2024, respectively.
It was $83,987 for property management and subleasing business and $46,617 for garments manufacturing business for the year ended March 31, 2024. It was approximately $78,769 for property management and subleasing business for the year ended March 31, 2023.
It was $264,270 for property management and subleasing business and $128,956 for garments manufacturing business for the year ended March 31, 2025. It was approximately $83,987 for property management and subleasing business and $46,617 for garments manufacturing business for the year ended March 31, 2024.
The decrease was mainly due to the decrease of revenue from the garment manufacturing business. Revenue generated from our garment manufacturing business contributed approximately $0.2 million, or approximately 4.5%, of our total revenue for the year ended March 31, 2024.
The decrease was mainly due to the decrease of revenue from the logistics services business. Revenue generated from our garment manufacturing business contributed approximately $0.3 million, or approximately 6.8%, of our total revenue for the year ended March 31, 2025.
Total general and administrative expenses for the year ended March 31, 2024 decreased approximately 4.9% to approximately $2.1 million from approximately $2.2 million for the year ended March 31, 2023. Loss from operations Loss from operations for the years ended March 31, 2024 and 2023 was approximately $1.1 million and $0.5 million, respectively.
Total general and administrative expenses for the year ended March 31, 2025 decreased approximately 2.7% to approximately $2.06 million from approximately $2.12 million for the year ended March 31, 2024. Loss from operations Loss from operations for the years ended March 31, 2025 and 2024 was approximately $1.8 million and $1.1 million, respectively.
We classify our businesses into three main segments: garment manufacturing, logistics services, and property management and subleasing. 46 Unless the context otherwise requires, all references in this annual report to “ Addentax ” refer to Addentax Group Corp., a holding company, and references to “ we, ” “ us, ” “ our, ” the “ Registrant ”, the “ Company, ” or “ our company ” refer to Addentax and/or its consolidated subsidiaries.
We classify our businesses into three main segments: garment manufacturing, logistics services, and property management and subleasing. 45 Unless the context otherwise requires, all references in this Form 10-K to “Addentax” refer to Addentax Group Corp., a holding company, and references to “we,” “us,” “our,” the “Registrant,” the “Company,” or “our company” refer to Addentax and/or its consolidated subsidiaries.
Our basic and diluted (loss) earnings per share were $(0.71) and $0.04 for the year ended March 31, 2024 and 2023, respectively. 55 Summary of cash flows Summary cash flows information for the years ended March 31, 2024 and 2023 is as follow: 2024 2023 (In U.S. dollars) Net cash used in operating activities $ (411,473 ) $ (1,569,159 ) Net cash provided by (used in) investing activities $ 90,731 $ (21,168,153 ) Net cash provided by (used in) financing activities $ 521,704 $ 21,845,838 Net cash used in operating activities in the year ended March 31, 2024 decreased by approximately $1.1 million compared with that of the year ended March 31, 2023.
Our basic and diluted loss per share were $0.85 and $0.71 for the year ended March 31, 2025 and 2024, respectively. 54 Summary of cash flows Summary cash flows information for the years ended March 31, 2025 and 2024 is as follows: 2025 2024 (In U.S. dollars) Net cash provided by (used in) operating activities $ 816,001 $ (411,473 ) Net cash (used in) provided by investing activities $ (205,811 ) $ 90,731 Net cash (used in) provided by financing activities $ (1,102,141 ) $ 521,704 Net cash provided by operating activities in the year ended March 31, 2025 increased by approximately $1.1 million compared with that of the year ended March 31, 2024.
“ PRC Subsidiaries ” refer to, collectively, (i) Qianhai Yingxi Textile & Garments Co., Ltd.; (ii) Shenzhen Qianhai Yingxi Industrial Chain Services Co., Ltd (“YX”), (iii) Dongguan Heng Sheng Wei Garments Co., Ltd (“HSW”), (iv) Dongguan Yushang Clothing Co., Ltd (“YS”); (v) Shantou Yi Bai Yi Garment Co., Ltd (“YBY”); (vi) Shenzhen Yingxi Peng Fa Logistic Co., Ltd., a PRC company (“PF”); (vii) Shenzhen Xin Kuai Jie Transportation Co., Ltd, a PRC company (“XKJ”), (viii) Shenzhen Yingxi Tongda Logistic Co., Ltd, a PRC company (“TD”), (ix) Zhuang Hao Jia (Dongguan) Decoration Engineering Co.,Ltd, a PRC company (“ZHJ”), and (x) Dongguan Aotesi Garments Co., Ltd.,, a PRC company (“AOT”), (xiii) Dongguan Hongxiang Commercial Co., Ltd., a PRC company (“HX”).
“PRC Subsidiaries” refers to, collectively, (i) Qianhai Yingxi Textile & Garments Co., Ltd.; (ii) Shenzhen Qianhai Yingxi Industrial Chain Services Co., Ltd (“YX”), (iii) Dongguan Heng Sheng Wei Garments Co., Ltd (“HSW”), (iv) Dongguan Yushang Clothing Co., Ltd (“YS”); (v) Shenzhen Yingxi Peng Fa Logistic Co., Ltd., a PRC company (“PF”); (vi) Shenzhen Xin Kuai Jie Transportation Co., Ltd, a PRC company (“XKJ”), (vii) Dongguan Aotesi Garments Co., Ltd.,, a PRC company (“AOT”), (viii) Dongguan Hongxiang Commercial Co., Ltd., a PRC company (“HX”).
The foreign currency translation gain (loss) for the years ended March 31, 2024 and 2023 was $0.1 million and $0.2 million, respectively.
The foreign currency translation gain for the years ended March 31, 2025 and 2024 was $48,135 and $82,490, respectively.
Net cash provided by financing activities for the year ended March 31, 2024 was approximately $21.3 million less than the year ended March 31, 2023.
Net cash used in financing activities for the year ended March 31, 2025 was approximately $1.6 million more than the year ended March 31, 2024.
Gross profit in our property management and subleasing business for the year ended March 31, 2023 was $0.7 million, or 21.1% of our total property management and subleasing business revenue.
The increase in the gross profit ratio was mainly because less subcontractor used Gross loss of our property management and subleasing business for the year ended March 31, 2025 was approximately $0.5 million, representing approximately (53.5)% of our total property management and subleasing business revenue.
Our property management and subleasing business provides shops subleasing and property management services for garment wholesalers and retailers in the garment market. business provides shops subleasing and property management services for garment wholesalers and retailers in the garment market. In February 2023, the Company disposed of DY to an independent third party at fair value in February, 2023.
Our property management and subleasing business provides shops subleasing and property management services for garment wholesalers and retailers in the garment market. business provides shops subleasing and property management services for garment wholesalers and retailers in the garment market.
The table and the discussion below should be read in conjunction with our consolidated financial statements and the notes thereto appearing elsewhere in this report. 2024 2023 Changes in 2024 compared to 2023 % Change (In U.S. dollars, except for percentages) Revenue $ 5,153,753 100.0 % $ 7,944,171 100 % $ (2,790,418 ) (35.1 )% Cost of revenues (4,038,668 ) (78.4 )% (6,103,110 ) (76.8 )% 2,064,442 33.8 % Gross profit (loss) 1,115,085 21.6 % 1,841,061 23.2 % (725,976 ) (39.4 )% Operating expenses (2,246,281 ) (43.6 )% (2,303,976 ) (29.0 )% 57,695 2.5 % Loss from operations (1,131,196 ) (21.9 )% (462,915 ) (5.8 )% (668,281 ) (144.4 )% Other income, net (307,577 ) (6.0 )% 320,556 4.0 % (628,133 ) (196.0 )% Fair value gain or loss 1,986,886 38.6 % 2,983,538 37.6 (996,653 ) 33.4 % Net finance cost (3,645,926 ) (70.7 )% (1,499,379 ) (18.9 ) (2,146,547 ) 143.2 % Income tax expense (11,605 ) (0.2 )% (22,143 ) (0.3 )% 10,538 47.6 % Net income $ (3,109,418 ) (60.3 )% $ 1,319,657 16.6 % $ (4,429,075 ) 335.6 % Revenue Total revenue for the year ended March 31, 2024 significantly decreased by approximately $2.8 million, or approximately 35.1%, as compared with the year ended March 31, 2023.
The table and the discussion below should be read in conjunction with our consolidated financial statements and the notes thereto appearing elsewhere in this report. 2025 2024 Changes in 2025 compared to 2024 % Change (In U.S. dollars, except for percentages) Revenue $ 4,180,914 100.0 % $ 5,153,753 100 % $ (972,839 ) (18.9 )% Cost of revenues (3,546,657 ) (84.8 )% (4,038,668 ) (78.4 )% 492,011 (12.2 )% Gross profit (loss) 634,257 15.2 % 1,115,085 21.6 % (480,828 ) (43.1 )% Operating expenses (2,451,227 ) (58.6 )% (2,246,281 ) (43.6 )% (204,946 ) 9.1 % Loss from operations (1,816,970 ) (43.5 )% (1,131,196 ) (21.9 )% (685,774 ) 60.6 % Other income, net 212,391 5.1 % (307,577 (6.0 )% 519,968 (169.1 )% Fair value gain or loss (2,339,448 ) (56.0 )% 1,986,886 38.6 (4,326,334 ) (217.7 )% Net finance cost (1,145,522 ) (27.4 )% (3,645,926 ) (70.7 ) 2,500,404 (68.6 )% Income tax expense (4,649 ) (0.1 )% (11,605 ) (0.2 )% 6,956 (59.9 )% Net income $ (5,094,198 ) (121.8 )% $ (3,109,418 (60.3 )% $ (1,984,780 ) 63.8 % Revenue Total revenue for the year ended March 31, 2025 significantly decreased by approximately $1.0 million, or approximately 18.9%, as compared with the year ended March 31, 2024.
Seasonality of Business Garment Manufacturing Business We generally receive more purchase orders during our second and third quarters and fewer manufacture orders during May and June.
We conduct the business through a wholly owned subsidiary acquired in September 2023, namely Dongguan Hongxiang Commercial Co., Ltd., a PRC company (“HX”). Seasonality of Business Garment Manufacturing Business We generally receive more purchase orders during our second and third quarters and fewer manufacture orders during May and June.
Net cash provided by investing activities for the year ended March 31, 2024 was approximately $0.09 million, compared to cash used of $21.2 million in investing activities for the year ended March 31, 2023.
Net cash used in investing activities for the year ended March 31, 2025 was approximately $0.3 million more than cash used in investing activities for the year ended March 31, 2024. It was mainly because in the year ended March 31, 2024, there was $0.2 million cash from newly acquired subsidiary.
Changes in 2024 2024 2023 compared to 2023 (In U.S. dollars, except for percentages) Gross profit $ 1,115,085 100 % $ 1,841,061 100 % (725,976 ) (39.4 )% Operating expenses: Selling expenses (130,603 ) (4.3 )% (78,769 ) (4.3 )% (51,834 ) (65.8 )% General and administrative expenses (2,115,678 ) (120.9 )% (2,225,207 ) (120.9 )% 109,529 4.9 % Total $ (2,246,281 ) (125.1 )% $ (2,303,976 ) (125.1 )% 57,695 2.5 % Loss from operations $ (1,131,196 ) (25.1 )% $ (462,915 ) (25.1 )% (668,281 ) (144.4 )% Selling, General and administrative expenses Our selling expenses were mainly incurred for our property management and subleasing business.
Changes in 2025 2025 2024 compared to 2024 (In U.S. dollars, except for percentages) Gross profit $ 634,257 100 % $ 1,115,085 100 % (480,828 ) (43.1 )% Operating expenses: Selling expenses (393,226 ) (62.0 )% (130,603 ) (11.7 )% (262,623 ) 201.1 % General and administrative expenses (2,058,001 ) (324.5 )% (2,115,678 ) (189.7 )% 57,677 (2.7 )% Total $ (2,451,227 ) (386.5 )% $ (2,246,281 ) (201.4 )% (204,946 ) 9.1 % Loss from operations $ (1,816,970 ) (286.5 )% $ (1,131,196 ) (101.4 )% (685,774 ) 60.6 % Selling, General and administrative expenses Our selling expenses were mainly incurred for our property management and subleasing business.
Removed
In February 2023, the Company disposed of DY to an independent third party at fair value and conduct the business through a wholly owned subsidiary acquired in September 2023, namely Dongguan Hongxiang Commercial Co., Ltd., a PRC company (“HX”).
Added
Gross profit of the segment for the year ended March 31, 2024 was approximately $0.9 million and gross profit ratio was approximately 21.8%.
Removed
Gross profit of the segment for the year ended March 31, 2023 was approximately $1.1 million and gross profit ratio was approximately 24.2%. The decrease in the gross profit ratio was mainly because we did not have enough delivery orders to fill the trucks every time which increased our cost.
Added
In the year ended March 31 2025, the Company had receipt the proceeds of $0.6 million from issuance of Common Stock, payment of $0.5 million for redemption of convertible debt, net cash advance of $1.4 million to related parties and net cash from bank loans of $0.2 million.
Removed
It was mainly due to the purchase of debt securities of $17.5 million in the year ended March 31, 2023, payment of long-term loan of $2.5 million to an independent third party, and a cash decrease of approximately $1.2 million in disposal of one subsidiary in property management and subleasing segment.
Added
During the year ended March 31, 2024, the Company had receipt of $4.5 million cash released from restricted cash, net cash inflow of $0.3 million from bank loans, payment of $0.4 million of issuance cost of convertible debts, and net cash advance to related parties of $3.9 million.
Removed
It was mainly because in the year ended March 31 2023, the Company received the proceeds of $22.7 million from its initial public offering (“IPO”), the proceeds of $15.0 million from issuance of the Notes and warrants and deposit of $14.75 million to the restricted cash account pursuant to the PIPE Securities Purchase Agreement.

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