Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to _________________

Commission File No. 333-206097

ADDENTAX GROUP CORP.

(Exact name of registrant as specified in its charter)

Nevada		35-2521028
(State or other jurisdiction of		(I.R.S. Employer
incorporation or formation)		Identification Number)

Kingkey 100, Block A, Room 4805,

Luohu District, Shenzhen City, China 518000

(Address of principal executive offices)

+ (86) 755 86961 405

(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		ATXG		Nasdaq Capital Markets

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
Emerging growth ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of August 14, 2023, there were 4,294,979 shares outstanding of the registrant’s common stock.

TABLE OF CONTENTS

	PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	F-1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	13

Item 4.	Controls and Procedures	13

	PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	14

Item 1A.	Risk Factors	14

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	14

Item 3.	Defaults Upon Senior Securities	14

Item 4.	Mine Safety Disclosures	14

Item 5.	Other Information	14

Item 6.	Exhibits	14

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements and Supplementary Data

ADDENTAX GROUP CORP.

FINANCIAL STATEMENTS

For the three months ended June 30, 2023 and 2022

TABLE OF CONTENTS

Condensed Consolidated Balance sheets as of June 30, 2023 and March 31, 2023 (unaudited)	F-2
Condensed Consolidated Statements of Income and Comprehensive Income for the Three months ended June 30, 2023 and 2022 (unaudited)	F-3
Condensed Consolidated Statements of Changes in Equity for the three months ended June 30, 2023 and 2022 (unaudited)	F-4
Condensed Consolidated Statements of Cash Flows for the three months ended June 30, 2023 and 2022 (unaudited)	F-5
Notes to Condensed Consolidated Financial Statements for the three months ended June 30, 2023 and 2022 (unaudited)	F-6 – F-14

F-1

ADDENTAX GROUP CORP. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In U.S. Dollars, except share data or otherwise stated)

(UNAUDITED)

	June 30, 2023			March 31, 2023

ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	487,215		$	562,711
Restricted cash		5,750,000			-
Accounts receivables, net		1,963,293			1,858,889
Debt securities held-to-maturity		17,828,125			17,718,750
Inventories		265,742			285,528
Prepayments and other receivables		8,506,690			959,196
Advances to suppliers		1,903,164			1,281,075
Amount due from related party		510,708			375,092
Total current assets		37,214,937			23,041,241

NON-CURRENT ASSETS
Plant and equipment, net		586,492			649,120
Long-term prepayments		57,876			90,032
Restricted cash		-			14,750,000
Long-term receivables		2,500,000			2,500,000
Operating lease right of use asset		232,350			272,488
Total non-current assets		3,376,718			18,261,640
TOTAL ASSETS	$	40,591,655		$	41,302,881

LIABILITIES AND EQUITY

CURRENT LIABILITIES
Short-term loan	$	130,176		$	137,468
Accounts payable		254,288			267,501
Amount due to related parties		2,093,025			2,384,633
Advances from customers		-			2,152
Accrued expenses and other payables		462,469			606,843
Operating lease liability current portion		120,359			127,101
Total current liabilities		3,060,317			3,525,698

NON-CURRENT LIABILITIES
Convertible debts		8,510,226			11,219,519
Derivative liabilities		4,582,560			2,290,483
Operating lease liability		111,991			145,387
Total non-current liabilities		13,204,777			13,655,389
TOTAL LIABILITIES	$	16,265,094		$	17,181,087

EQUITY
Common stock ($0.001 par value, 250,000,000 shares authorized, 3,739,581 and 35,454,670 shares issued and outstanding at June 30 and March 31, 2023, respectively)	$	3,740		$	35,455
Additional paid-in capital		32,406,317			29,528,564
Accumulated Deficit		(8,179,930	)		(5,451,209	)
Statutory reserve		28,457			28,457
Accumulated other comprehensive loss		67,977			(19,473	)
Total equity		24,326,561			24,121,794	)
TOTAL LIABILITIES AND EQUITY	$	40,591,655		$	41,302,881

See accompany notes to the unaudited condensed consolidated financial statements.

F-2

ADDENTAX GROUP CORP. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In U.S. Dollars, except share data or otherwise stated)

	2023			2022
	Three months ended June 30,
	2023			2022

REVENUES	$	1,052,506		$	2,386,384

COST OF REVENUES		(815,597	)		(1,929,700	)

GROSS PROFIT		236,909			456,684

OPERATING EXPENSES
Selling and marketing		-			(5,642	)
General and administrative		(497,858	)		(404,940	)
Total operating expenses		(497,858	)		(410,582	)

(LOSS) INCOME FROM OPERATIONS		(260,949	)		46,102

Fair value gain or loss		(1,288,003	)		-
Interest income		1,724			3,238
Interest expenses		(1,292,715	)		(2,458	)
Other income (expense), net		112,486			51,083

(LOSS) INCOME BEFORE INCOME TAX EXPENSE		(2,727,457	)		97,965
INCOME TAX EXPENSE		(1,264	)		(1,294	)

NET (LOSS) INCOME		(2,728,721	)		96,671
Foreign currency translation gain (loss)		87,450			105,149
TOTAL COMPREHENSIVE (LOSS) INCOME	$	(2,641,271	)	$	201,820

EARNINGS (LOSS) PER SHARE
Basic and diluted		(0.83	)		0.00
Weighted average number of shares outstanding – Basic and diluted		3,273,964			26,693,004

See accompany notes to the unaudited condensed consolidated financial statements.

F-3

ADDENTAX GROUP CORP. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In U.S. Dollars, except share data or otherwise stated)


	Common Stock						Additional			Retained earnings (accumulated deficit)					Accumulated other
	Shares			Amount			paid-in capital			Unrestricted			Statutory reserve		comprehensive loss			Total Equity
BALANCE AT MARCH 31, 2022		26,693,004		$	26,693		$	6,815,333		$	(6,756,230	)	$	13,821	$	(170,984	)	$	(71,367	)
Foreign currency translation																105,149			105,149
Net income for the period		-			-			-			96,671			-		-			96,671
BALANCE AT JUNE 30, 2022		26,693,004		$	26,693		$	6,815,333		$	(6,659,559	)	$	13,821	$	(65,835	)	$	130,453

BALANCE AT MARCH 31, 2023		35,454,670		$	35,455		$	29,528,564		$	(5,451,209	)	$	28,457	$	(19,473	)	$	24,121,794
Balance, value		35,454,670		$	35,455		$	29,528,564		$	(5,451,209	)	$	28,457	$	(19,473	)	$	24,121,794
Issuance of new shares		1,940,750			1,941			(1,941	)		-			-		-			-
Reverse stock split		(33,655,878	)		(33,656	)		33,656			-			-		-			-
New shares for round up of fragmental shares		39			0			0			-			-		-			-
Additional paid-in capital from conversion of convertible debts		-			-			2,846,038			-			-		-			2,846,038
Foreign currency translation		-			-			-			-			-		87,450			87,450
Net income for the period		-			-			-			(2,728,721	)		-		-			(2,728,721	)
BALANCE AT JUNE 30, 2023		3,739,581		$	3,740		$	32,406,317		$	(8,179,930	)	$	28,457	$	67,977		$	24,326,561
Balance, value		3,739,581		$	3,740		$	32,406,317		$	(8,179,930	)	$	28,457	$	67,977		$	24,326,561

See accompanying notes to the unaudited condensed consolidated financial statements.

F-4

ADDENTAX GROUP CORP. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In U.S. Dollars, except share data or otherwise stated)

	2023			2022
	Three Months Ended June 30
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(2,728,721	)	$	96,671
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation		74,783			35,883
Non-cash financial cost		1,290,818			-
Investment income		(109,375	)		-
Fair value gain or loss		1,288,003			-
Changes in operating assets and liabilities
Accounts receivable		(104,404	)		27,217
Inventories		19,786			3,337
Advances to suppliers		(622,089	)		91,378
Other receivables		(47,494	)		(443,140	)
Accounts payables		(25,659	)		(83,529	)
Accrued expenses and other payables		(144,374	)		549,880
Advances from customers		(2,152	)		321
Net cash (used in) provided by operating activities	$	(1,110,878	)	$	278,018

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from related party borrowings		1,451,157			980,724
Repayment of related party borrowings		(1,831,373	)		(364,452	)
Release of restricted cash		1,350,000			-
Repayment of bank borrowings		-			(424	)
Net cash provided by financing activities	$	969,784		$	615,848

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(141,094	)		893,866
Effect of exchange rate changes on cash and cash equivalents		65,598			(52,162	)
Cash and cash equivalents, beginning of the period		562,711			1,390,644
CASH AND CASH EQUIVALENTS, END OF THE PERIOD	$	487,215		$	2,232,348

Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	-		$	-
Cash paid during the period for income tax	$	1,264		$	1,294
Supplemental disclosure of non-cash investing and financing activities:
Right-of-use assets obtained in exchange for operating lease obligations	$	1,219		$	-

See accompanying notes to the unaudited condensed consolidated financial statements.

F-5

ADDENTAX GROUP CORP. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND BUSINESS ACQUISITIONS

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

2. BASIS OF PRESENTATION

In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. All significant intercompany transactions and balances are eliminated in consolidation. However, the results of operations included in such financial statements may not necessarily be indicative of annual results.

The Company uses the same accounting policies in preparing quarterly and annual financial statements. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2023 filed with the Securities and Exchange Commission (“SEC”) on June 29, 2023 (“2023 Form 10-K”).

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ materially from those estimates.

There is no change in the accounting policies for the three months ended June 30, 2023.

Recently issued accounting pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. This standard requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. This standard will be effective for the Company on April 1, 2023. The Company is currently evaluating the impact the adoption of this ASU will have on its consolidated financial statements.

Accounting for Convertible Instruments: In August 2020, FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (ASU 2020-06), as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Among other changes, the new guidance removes from GAAP separation models for convertible debt that require the convertible debt to be separated into a debt and equity component, unless the conversion feature is required to be bifurcated and accounted for as a derivative or the debt is issued at a substantial premium. As a result, after adopting the guidance, entities will no longer separately present such embedded conversion features in equity and will instead account for the convertible debt wholly as debt. The new guidance also requires use of the “if-converted” method when calculating the dilutive impact of convertible debt on earnings per share, which is consistent with the Company’s current accounting treatment under the current guidance. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted, but only at the beginning of the fiscal year.

The Company reviews new accounting standards as issued. Management has not identified any other new standards that it believes will have a significant impact on the Company’s consolidated financial statements.

F-6

4. RELATED PARTY TRANSACTIONS

Name of Related Parties		Relationship with the Company
Zhida Hong		President, CEO, and a director of the Company
Hongye Financial Consulting (Shenzhen) Co., Ltd.		A company controlled by CEO, Mr. Zhida Hong
Bihua Yang		A legal representative of XKJ
Dewu Huang		A legal representative of YBY
Jinlong Huang		Management of HSW

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

The Company had the following related party balances as of June 30, 2023 and March 31, 2023:

Amount due from related party	June 30, 2023		March 31, 2023
Zhida Hong	$	58,079	$	-
Bihua Yang		452,629		375,092
Amount due from related party	$	510,708	$	375,092

SCHEDULE OF RELATED PARTIES BORROWINGS

Related party borrowings	June 30, 2023		March 31, 2023
Zhida Hong (1)	$	-	$	901,110
Hongye Financial Consulting (Shenzhen) Co., Ltd.		84,901		45,841
Dewu Huang (2)		1,917,581		1,305,758
Jinlong Huang		90,543		131,924
Total Related party borrowings	$	2,093,025	$	2,384,633

	(1)	Being interest free loan as financial support from Zhida Hong to daily operation of the Company.

	(2)	Being interest free loan as financial support from Dewu Huang to pay for daily operating expenditures of YBY.

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

5. DEBT SECURITIES HELD-TO-MATURITY

	June 30, 2023		March 31, 2023

Debt securities held-to-maturity	$	17,828,125	$	17,718,750

The Company purchased a note issued by a third-party investment company on August 24, 2022. The principal amount of the note is $17,500,000. The note is renewable with one-year tenor on August 23, 2023 and 2.5% p.a. coupon. As of June 30, and March 31, 2023, the coupon receivable was $328,125 and $218,750, respectively.

6. INVENTORIES

Inventories consist of the following as of June 30, 2023 and March 31, 2023:

SCHEDULE OF INVENTORIES

	June 30, 2023		March 31, 2023
Raw materials	$	16,147	$	19,484
Work in progress		17,756		9,373
Finished goods		231,839		256,671
Total inventories	$	265,742	$	285,528

F-7

7. ADVANCES TO SUPPLIERS

The Company has made advances to third-party suppliers in advance of receiving inventory parts. These advances are generally made to expedite the delivery of required inventory when needed and to help to ensure priority and preferential pricing on such inventory. The amounts advanced to suppliers are fully refundable on demand.

The Company reviews a supplier’s credit history and background information before advancing a payment. If the financial condition of its suppliers were to deteriorate, resulting in an impairment of their ability to deliver goods or provide services, the Company would recognize bad debt expense in the period they are considered unlikely to be collected.

8. PREPAYMENTS AND OTHER RECEIVABLES

Prepayments and other receivables consist of the following as of June 30, 2023 and March 31, 2023:

	June 30, 2023		March 31, 2023
Prepayment		16,031		10,913
Deposit		42,337		40,341
Receivable of consideration on disposal of subsidiaries		667,342		708,457
Receivable of consideration of convertible note issued (Note)		7,500,000		-
Other receivables		280,980		199,485
Total Prepayment	$	8,506,690	$	959,196

Note: In June, one of the holder of the convertible note withdrawn the consideration of $7.5 million paid for the convertible note issued from the escrow account. The Company was negotiating with the holder on this matter. In July, the Company entered into a Waiver and Ratification Agreement with this holder of the Convertible Note. According to the agreement, the holder redeemed the full amount of $7.5 million for the Convertible Note and irrevocably waives any past, present or future claims, rights and obligations under the Note and the Warrant.

9. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of the following as of June 30, 2023 and March 31, 2023:

SCHEDULE OF PLANT AND EQUIPMENT

	June 30, 2023			March 31, 2023
Production plant	$	64,720		$	68,345
Motor vehicles		1,042,298			1,100,683
Office equipment		24,645			26,025
Total gross		1,131,663			1,195,053
Less: accumulated depreciation		(545,171	)		(545,933	)
Plant and equipment, net	$	586,492		$	649,120

Depreciation expense for the three months ended June 30, 2023 and 2022 was $33,982 and $35,883, respectively.

F-8

10. LONG-TERM RECEIVABLES

The Company entered into a long-term loan agreement with an independent third party in September 2022. The principal to the borrower is $2.5 million. The loan is interest free and will be expired in August 2025.

11. SHORT-TERM BANK LOAN

In August 2019, HSW entered into a facility agreement with Agricultural Bank of China and obtained a line of credit, which allows the Company to borrow up to approximately $153,172 (RMB1,000,000) for daily operations. The loans are guaranteed at no cost by the legal representative of HSW. As of June 30, 2023, the Company has borrowed $130,176 (RMB944,255) (March 31, 2023: $137,468) under this line of credit with various annual interest rates from 4.34% to 4.9%. The outstanding loan balance was due on September 30, 2021. The Company was not able to renew the loan facility with the bank. The Company is negotiating with the bank on repayment schedule of the loan balance and interest payable.

12. TAXATION

(a)	Enterprise Income Tax (“EIT”)

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

Yingxi Industrial Chain Group Co., Ltd was incorporated in the Republic of Seychelles and, under the current laws of the British Virgin Islands, is not subject to income taxes. It’s wholly owned subsidiary of Addentax Group Corp.

Yingxi HK (Yingxi Industrial Chain Investment Co., Ltd.) was incorporated in Hong Kong which is indirectly wholly owned by Addentax Group Corp., and is subject to Hong Kong income tax at a progressive rate of 16.5%. No provision for income taxes in Hong Kong has been made as Yingxi HK had no taxable income for the three months ended June 30, 2023 and 2022.

YX, our wholly owned subsidiary, were incorporated in the PRC and is subject to the EIT tax rate of 25%. No provision for income taxes in the PRC has been made as YX had no taxable income for the three months ended June 30, 2023 and 2022.

The Company is governed by the Income Tax Laws of the PRC. All Yingxi’s operating companies were subject to progressive EIT rates from 5% to 15% in 2023 and 2022. The preferential tax rate will be expired at end of year 2023 and the EIT rate will be 25% from year 2024.

The Company’s parent entity, Addentax Group Corp. is a U.S entity and is subject to the United States federal income tax. No provision for income taxes in the United States has been made as Addentax Group Corp. had no United States taxable income for the three months ended June 30, 2023 and 2022.

F-9

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

	2023			2022
	Three months ended
	June 30,
	2023			2022
PRC statutory tax rate		25	%		25	%
Computed expected benefits (expense)		(681,864	)		24,491
Temporary differences		6,150			(40,566	)
Permanent difference		82,125			(2,561
Changes in valuation allowance		594,853			19,930
Income tax expense	$	1,264		$	1,294

Deferred tax assets had not been recognized in respect of any potential tax benefit that may be derived from non-capital loss carry forward and property and equipment due to past negative evidence of previous cumulative net losses and uncertainty upon restructuring. The management will continue to assess at each reporting period to determine the realizability of deferred tax assets.

(b)	Value Added Tax (“VAT”)

In accordance with the relevant taxation laws in the PRC, the normal VAT rate for domestic sales is 13%, which is levied on the invoiced value of sales and is payable by the purchaser. The subsidiaries HSW, YBY, AOT, ZHJ and YS enjoyed preferential VAT rate of 13%. The companies are required to remit the VAT they collect to the tax authority. A credit is available whereby VAT paid on purchases can be used to offset the VAT due on sales.

For services, the applicable VAT rate is 9% under the relevant tax category for logistic company, except the branch of YXPF enjoyed the preferential VAT rate of 3% in 2023 and 2022. The Company is required to pay the full amount of VAT calculated at the applicable VAT rate of the invoiced value of sales as required. A credit is available whereby VAT paid on gasoline and toll charges can be used to offset the VAT due on service income.

13. CONSOLIDATED SEGMENT DATA

Segment information is consistent with how chief operating decision maker reviews the businesses, makes investing and resource allocation decisions and assesses operating performance. The segment data presented reflects this segment structure. The Company reports financial and operating information in the following four segments:

	(a)	Garment manufacturing. Including manufacturing and distribution of garments;

	(b)	Logistics services. Providing logistic services; and

	(c)	Property management and subleasing. Providing shops subleasing and property management services for garment wholesalers and retailers in garment market.

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

F-10

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

Revenues by segment for the three months ended June 30, 2023 and 2022 are as follows:

Revenues from external customers	2023		2022
	Three months ended June 30,
Revenues from external customers	2023		2022
Garments manufacturing segment	$	53,873	$	40,426
Logistics services segment		998,633		1,390,882
Property management and subleasing		-		954,835
Total of reportable segments		1,052,506		2,386,143
Corporate and other		-		241
Total of reportable segments and consolidated revenue	$	1,052,506	$	2,386,384

Intersegment revenue
Garments manufacturing segment		-		-
Total of reportable segments and consolidated revenue		-		-

(Loss) Income from operations by segment for the three ended June 30, 2023 and 2022 are as follows:

Revenues from external customers	2023			2022
	Three months ended
	June 30,
	2023			2022
Garment manufacturing segment	$	(22,155	)	$	(28,656	)
Logistics services segment		1,934			120,041
Property management and subleasing		-			34,097
Total of reportable segments		(20,221	)		125,482
Corporate and other		(240,728	)		(79,380	)
Total consolidated income from operations	$	(260,949	)	$	46,102

Total assets by segment as of June 30, 2023 and March 31, 2023 are as follows:

Total assets	June 30, 2023		March 31, 2023
Garment manufacturing segment	$	2,699,607	$	2,169,973
Logistics services segment		2,272,917		2,476,841

Total of reportable segments		4,972,524		4,646,814
Corporate and other		35,619,131		36,656,067
Consolidated total assets	$	40,591,655	$	41,302,881

Geographical Information

The Company operates predominantly in China. In presenting information on the basis of geographical location, revenue is based on the geographical location of customers and long-lived assets are based on the geographical location of the assets.

Geographic Information

SCHEDULE OF GEOGRAPHICAL INFORMATION

	Three months ended June 30,
	2023		2022
Revenues
China		1,052,506		2,386,384

	June 30, 2023		March 31, 2023
Long-Lived Assets
China		3,376,718		3,511,640

F-11

14. FINANCIAL INSTRUMENTS

On January 4, 2023, the Company entered into a series of agreements with certain accredited investors, pursuant to which the Company received a net proceed of $15,000,000 in consideration of the issuance of:

	●	senior secured convertible notes in the aggregate original principal amount of approximately $16.7 million with interest rate of 5% per annum (the “Convertible Notes”); The Convertible Notes shall be matured on July 4, 2024. The conversion price is $1.25, subject to adjustment under several conditions.
	●	warrants to purchase up to approximately 16.1 million shares of common stock of the Company (the “Common Stock”) until on or prior to 11:59 p.m. (New York time) on the five-year anniversary of the closing date at an exercise price of $1.25 per share, also subject to adjustment under several conditions.

The Warrant is considered a freestanding instrument issued together with the Convertible Note and measured at its issuance date fair value. Proceeds received were first allocated to the Warrant based on its initial fair value. The initial fair value of the Warrant was $3.9 million. The Warrant were marked to the market with the changes in the fair value of warrant recorded in the consolidated statements of operations and comprehensive loss. As of March 31, 2023, the balance of the Warrant was approximately $2.0 million.

The Convertible Note is classified as a liability and is subsequently stated at amortized cost with any difference between the initial carrying value and the repayment amount as interest expenses using the effective interest method over the period from the issuance date to the maturity date. The embedded conversion feature should be bifurcated and separately accounted for using fair value, as this embedded feature is considered not clearly and closely related to the debt host. The bifurcated conversion feature was recorded at fair value with the changes recorded in the consolidated statements of operations and comprehensive loss. The initial fair value of the embedded conversion feature was $1.2 million. As of March 31, 2023, the fair value of the conversion option was $0.3 million.

The Company determined that the other embedded features do not require bifurcation as they either are clearly and closely related to the Convertible Note or do not meet the definition of a derivative.

The total proceeds of the Convertible Note and the Warrants, net of issuance cost, of $15.0 million was received by the Company in January 2023, and allocated to each of the financial instruments as following:

SCHEDULE OF FINANCIAL INSTRUMENTS

	As of January 4, 2023

Derivative liabilities – Fair value of the Warrants	$	3,858,521
Derivative liabilities – Embedded conversion feature		1,247,500
Convertible Note		9,893,979
Total	$	15,000,000

In January 2023, the Company also granted to the placement agent a warrant as partial of agent fee to purchase 0.7 million shares of common stock of the Company. The warrant is matured in five years with exercise price of $1.25 subject to adjustments under different conditions. The warrant was recognized as derivative liability and the initial fair value was $0.168 million.

The Company’s convertible notes obligations were as the following for the three months ended March 31, 2023 and 2022:

	2023			2022

	Three months ended
	June 30,
	2023			2022
Carrying value – beginning balance	$	11,219,519		$	-
Converted to ordinary shares		(2,882,444	)		-
Amortization of debt discount		914,196			-
Deferred debt discount and cost of issuance		(1,117,667	)		-
Interest charge		376,622			-
Carrying value – ending balance	$	8,510,226		$	-

During the period, $1.5 million of the convertible notes was converted into approximately 2.3 million ordinary shares, with average effective conversion price of $0.6795 per share.

The Company’s derivative liabilities were as the following for the three months ended March 31, 2023 and 2022:

SCHEDULE OF DERIVATIVE LIABILITIES

	2023			2022
	Three months ended
	June 30,
	2023			2022
Derivative liabilities –Warrants	$			$	-
Beginning balance		2,013,261			-
Marked to the market		805,302			-
Ending fair value		2,818,563			-

Derivative liabilities – Embedded conversion feature
Beginning balance		277,222			-
Converted to ordinary shares		(113,594	)		-
Remeasurement on change of convertible price		1,117,667			-
Marked to the market		482,702			-
Ending fair value		1,763,997			-
					-
Total Derivative fair value at end of period	$	4,582,560		$	-

F-12

15. LEASE RIGHT-OF-USE ASSET AND LEASE LIABILITIES

The Company recognized right-of-use asset as well as lease liability according to the ASC 842, Leases (with the exception of short-term leases). Lease liabilities are measured at present value of the sum of remaining rental payments as of June 30, 2023, with discounted rate of 4.75%. A single lease cost is recognized over the lease term on a generally straight-line basis. All cash payments of operating lease cost are classified within operating activities in the statement of cash flows.

The Company leases its head office. The lease period is 5 years with an option to extend the lease. The Company leases its plant and dormitory for 4.5 years with an option to extend the lease. The Company leased several floors in a commercial building for its sublease business for 3 years with an option to extend the lease.

The Following table summarizes the components of lease expense:

SCHEDULE OF LEASE COST

	2023		2022
	Three months ended June 30,
	2023		2022
Operating lease cost		43,438		944,549
Short-term lease cost		23,557		20,444
Lease Cost	$	66,995	$	964,993

The following table summarizes supplemental information related to leases:

	2023			2022
	Three months ended June 30,
	2023			2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flow from operating leases	$	66,995		$	964,993
Right-of-use assets obtained in exchange for new operating leases liabilities		1,219			-
Weighted average remaining lease term - Operating leases (years)		2.0			1.5
Weighted average discount rate - Operating leases		4.75	%		4.75	%

The following table summarizes the maturity of operating lease liabilities:

Years ending June 30	Lease cost
2024	$	126,076
2025		114,096
2026		9,205

Total lease payments		249,377
Less: Interest		(17,027	)
Total	$	232,350

16. SHARE CAPITAL

The Company effected the amendment and combination to the outstanding shares of our common stock into a lesser number of outstanding shares (the “Reverse Stock Split Amendment”) on a ratio of one-for-ten, with effected date on June 26, 2023. After the reverse stock split, 3,739,581 ordinary shares are issued and outstanding as of June 30, 2023.

17. RISKS AND UNCERTAINTIES

(a)

Economic and Political Risks

The Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy.

The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation.

(b)

Foreign Currency Translation

The Company’s reporting currency is the U.S. dollar. The functional currency of the parent company is the U.S. dollar and the functional currency of the Company’s operating subsidiaries is the Chinese Renminbi (“RMB”). For the subsidiaries whose functional currencies are the RMB, all assets and liabilities are translated at exchange rates at the balance sheet date, which was 7.25 and 6.87 as of June 30, 2023 and March 31, 2023, respectively. Revenue and expenses are translated at the average yearly exchange rates, which was 7.004 and 6.603 for the three months ended June 30, 2023 and 2022, respectively. Equity is translated at historical exchange rates. Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustments to other comprehensive loss, a component of equity.

(c)

Concentration Risks

The followings are the percentages of accounts receivable balance of the top customers over accounts receivable for each segment as of June 30, 2023 and March 31, 2023.

F-13

Garment manufacturing segment

SCHEDULE OF CONCENTRATION RISKS

	June 30, 2023			March 31, 2023
Customer A		88.4	%		85.3	%
Customer B		10.6	%		11.4	%

The high concentration as of June 30, 2023 was mainly due to business development of a large distributor of garments. Management believes that should the Company lose any one of its major customers, it was able to sell similar products to other customers.

Logistics services segment

	June 30, 2023			March 31, 2023
Customer A		24.2	%		11.4	%
Customer B		17.0	%		14.1	%
Customer C		8.8	%		7.3	%
Customer D		7.1	%		2.5	%
Customer E		6.9	%		6.4	%

Property management and subleasing segment

There is no account receivable for Property management and subleasing segment as for June 30, and March 31, 2023.

Epidemic prevention supplies segment

The accounts receivable of Epidemic prevention supplies segment as of June 30, 2022 was from one customer only. There was no more sales in year ended June 30, 2023.

Concentration on customers

For the three months ended June 30, 2023, three customers from Logistics services segment provided more than 10% of total revenue of the Company, represented 40.6% of total revenue of the Company for the three months.

For the three months ended June 30, 2022, one customer from Logistics services segment provided more than 10% of total revenue of the Company, representing 13.1% of total revenue of the Company for the three months.

Management believes that should the Company lose any one of its major customers, it was able to sell similar products to other customers.

Concentration on suppliers

The following tables summarized the purchases from five largest suppliers of each of the reportable segment for the three months ended June 30, 2023 and 2022.

SCHEDULE OF PURCHASES FROM SUPPLIERS

	Three months ended
	June 30,
	2023			2022
Garment manufacturing segment		Nil	%		Nil	%
Logistics services segment		100.0	%		100.0	%
Property management and subleasing		Nil	%		100.0	%

(d)

Interest Rate Risk

The Company’s exposure to interest rate risk primarily relates to the interest expenses on our outstanding bank borrowings and the interest income generated by cash invested in cash deposits and liquid investments. As of June 30, 2023, the total outstanding borrowings amounted to $130,176 (RMB944,255) with various interest rate from 4.3% to 4.9% p.a. (Note 10)

18. SUBSEQUENT EVENTS

On July 13, 2023, the Company entered into a Waiver and Ratification Agreement with one of the holders of the Convertible Note. According to the agreement, the holder redeemed the full amount of $7.5 million for the Convertible Note and irrevocably waives any past, present or future claims, rights and obligations under the Note and the Warrant.

In July 2023, approximately $2.4 million of convertible note including principal and related accrued interest were converted into approximately 0.44 million common stock. The effective average conversion price was $5.74 per share.

F-14

Item 2. 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 three months ended June 30, 2023 and 2022 should be read in conjunction with the Financial Statements and corresponding notes included in this Report on Form 10-Q. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations, and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Risk Factors and Special Note Regarding Forward-Looking Statements in this report. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” “target”, “forecast” and similar expressions to identify forward-looking statements.

Overview

Our 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 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. Therefore, our investors will not directly hold any equity interests in our operating companies. Our holding company structure involves unique risks to investors. Chinese regulatory authorities could disallow our operating structure, which would likely result in a material change in our operations and/or the value of our common stock, including that it could cause the value of such securities to significantly decline or become worthless. Our holding company, Addentax Group Corp., is listed on the Nasdaq Capital Market under the symbol “ATXG”. We classify our businesses into three segments: garment manufacturing, logistics services, property management and subleasing.

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. Addentax Group Corp., our Nevada holding company, is the entity in which our investors are investing.

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) Dongguan Yingxi Daying Commercial Co., Ltd., a PRC company (“DY”), (xii) Zhuang Hao Jia (Dongguan) Decoration Engineering Co.,Ltd, a PRC company (“ZHJ”), and (xiii) Dongguan Aotesi Garments Co., Ltd.,, a PRC company (“AOT”).

“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) Dongguan Yingxi Daying Commercial Co., Ltd., a PRC company (“DY”), (x) Zhuang Hao Jia (Dongguan) Decoration Engineering Co.,Ltd, a PRC company (“ZHJ”), and (xi) Dongguan Aotesi Garments Co., Ltd.,, a PRC company (“AOT”).

In February 2023, the Company disposed DY to an independent third party respectively.

“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. We have our own manufacturing facilities, with sufficient production capacity and skilled workers on production lines to ensure that we meet our high quality control standards and timely meet the delivery requirements for our customers. 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.

Our logistics business consists of delivery and courier services covering 86 cities in 11 provinces and 3 municipalities in China. Although we have our own motor vehicles and drivers, we currently outsource some of the business to our contractors. We believe outsourcing allows us to maximize our capacity and maintain flexibility while reducing capital expenditures and the costs of keeping drivers during slow seasons. 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.

Our property management and subleasing business provides shops subleasing and property management services for garment wholesalers and retailers in the garment market. We conduct our property management and subleasing operation through a wholly owned subsidiary, namely Dongguan Yingxi Daying Commercial Co., Ltd. (“DY”), which is located in the Guangdong province, China.

In February 2023, the Company disposed of DY to an independent third party at fair value, which was also its carrying value as of February 28, 2023.

The business operations, customers and suppliers of DY were retained by the Company; therefore, the disposition of the subsidiary did not qualify as discontinued operations.

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 of our products. 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. As of June 30, 2023, we provide logistics services to over 79 cities in approximately seven provinces and two municipalities. We expect to develop an additional 20 logistics points in existing serving cities and improve the Company’s profit by the year end of 2023.

Property Management and Subleasing Business

The business objective of our property management and subleasing segment is to integrate resources in shopping mall, develop e-commerce bases and the Internet celebrity economy together to drive to increase the value of the stores in the area. The short-term goal for the year is to increase the occupancy rate of stores in the mall to more than 70%. In February 2023, the Company disposed of DY to an independent third party at fair value, which was also its carrying value as of February 28, 2023.

Seasonality of Business

Our business is affected by seasonal trends, with higher levels of garment sales during our second and third quarters and higher logistics services revenue during our third and fourth quarters. These trends primarily result from the timing of seasonal garment manufacturing shipments and holiday periods in the logistics services segment.

Collection Policy

Garment manufacturing business

For our new customers, we generally require orders placed to be backed by advances or deposits. For our long-term and established customers with good payment track records, we generally provide payment terms between 30 to 180 days following their acknowledgement of receipt of goods.

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.

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.

Economic Uncertainty

Our business is dependent on consumer demand for our products and services. We believe that the significant uncertainty in the economy in China has increased our clients’ sensitivity to the cost of our products and services. We have experienced continued pricing pressure. If the economic environment becomes weak, the economic conditions could have a negative impact on our sales growth and operating margins, cash position and collection of accounts receivable. Additionally, business credit and liquidity have tightened in China. Some of our suppliers and customers may face credit issues and could experience cash flow problems and other financial hardships. These factors currently have not had an impact on the timeliness of receivable collections from our customers. We cannot predict at this time how this situation will develop and whether accounts receivable may need to be allowed for or written off in the coming quarters.

Despite the various risks and uncertainties associated with the current economy in China, we believe our core strengths will continue to allow us to execute our strategy for long-term sustainable growth in revenue, net income and operating cash flow.

Summary of Critical Accounting Policies

We have identified critical accounting policies that, as a result of judgments, uncertainties, uniqueness and complexities of the underlying accounting standards and operation involved could result in material changes to our financial position or results of operations under different conditions or using different assumptions.

Estimates and Assumptions

We regularly evaluate the accounting estimates that we use to prepare our financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

Revenue Recognition

Revenue is generated through sale of goods and delivery services. Revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods and services. The Company applies the following five-step model in order to determine this amount:

	(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.

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. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery.

For all reporting periods, the Company has not disclosed the value of unsatisfied performance obligations for all product and service revenue contracts with an original expected length of one year or less, which is an optional exemption that is permitted under the adopted rules.

Leases

Lessee

The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities in our consolidated balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in the consolidated balance sheets.

ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the leases do not provide an implicit rate, The Company generally use the incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Lessor

As a lessor, the Company’s leases are classified as operating leases under ASC 842. Leases, in which the Company is the lessor, are substantially all accounted for as operating leases and the lease components and non-lease components are accounted for separately. Rental income from operating leases is recognized on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized on a straight line basis over the lease term.

Recently issued accounting pronouncements

Results of Operations for the three months ended June 30, 2023 and 2022

The following tables summarize our results of operations for the three months ended June 30, 2022 and 2021. 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.

	Three Months Ended June 30,										Changes in 2023
	2023					2022					compared to 2022
	(In U.S. dollars, except for percentages)
Revenue	$	1,052,506		100.0	%	$	2,386,384		100	%	$	(1,333,878	)	(55.9	)%
Cost of revenues		(815,597	)	(77.5	)%		(1,929,700	)	(80.9	)%		1,114,103		57.7	%
Gross profit		236,909		22.5	%		456,684		19.1	%		(219,775	)	(48.1	)%
Operating expenses		(497,858	)	(47.3	)%		(410,582	)	(17.2	)%		(87,276	)	(21.3	)%
(Loss) Income from operations		(260,949	)	(24.8	)%		46,102		1.9	%		(307,051	)	666.0	%
Other income, net		112,486		10.7	%		51,083		2.2	%		61,403		120.2	%
Fair value gain or loss		(1,288,003	)				-		-			(1,288,003	)
Net finance cost		(1,290,991	)	(122.7	)%		780		(0.1	)%		(1,291,771	)	52492.1	%
Income tax expense		(1,264	)	(0.1	)%		(1,294	)	(0.1	)%		30		2.3	%
Net (loss) income	$	(2,728,721	)	(259.3	)%	$	96,671		4.1	%	$	(2,825,392	)	2922.7	%

Revenue

Total revenue for the three months ended June 30, 2023 decreased significantly by approximately $1.3 million, or 55.9%, as compared with the three months ended June 30, 2022. The significant decrease was mainly because of the decrease of $0.4 million in logistics services and $0.9 million in property management and subleasing business.

Revenue generated from our garment manufacturing business contributed approximately $0.05 million or 5.1% of our total revenue for the three months ended June 30, 2023. Revenue generated from garment manufacturing business contributed approximately $0.04 million or 1.7% of our total revenue for the three months ended June 30, 2022, respectively. The low level of sales was mainly due to factory facilities renewal and repair, remaining factories cannot provide the same capacity as previously. We estimate the capacity will appear to recover at second quarter of for the fiscal year ending 2024.

Revenue generated from our logistics services business contributed approximately $1.0 million or 94.9% of our total revenue for the three months ended June 30, 2023. Revenue generated from our logistic business contributed approximately $1.4 million or 58.3% of our total revenue for the three months ended June 30, 2022.

Revenue generated from our property management and subleasing business was nil for the three months ended June 30, 2023. The revenue from this business segment was $0.9 million or 40.0% of our total revenue of this business for the three months ended June 30, 2022.

Cost of revenue

	Three months ended June 30,									Increase (decrease) in
	2023				2022					2023 compared to 2022
	(In U.S. dollars, except for percentages)
Net revenue for garment manufacturing	$	53,873	100.0	%	$	40,426		100	%	$	13,447		33.3	%
Raw materials		26,377	49.0	%		27,952		69.1	%		(1,575	)	(5.6	)%
Labor		17,273	32.0	%		8,544		21.1	%		8,729	)	102.2	%
Other and Overhead		2,670	5.0	%		579		1.4	%		2,091		361.1	%
Total cost of revenue for garment manufacturing		46,320	86.0	%		37,075		91.7	%		9,245		24.9	%
Gross profit for garment manufacturing		7,553	14.0	%		3,351		8.3	%		4,202		125.4	%
											0
Net revenue for logistics services		998,633	100.0	%		1,390,882		100.0	%		(392,249	)	(28.2	)%
Fuel, toll and other cost of logistics services		482,788	48.3	%		602,584		44.3	%		(119,796	)	(19.9	)%
Subcontracting fees		286,489	28.7	%		441,196		31.7	%		(154,707	)	(35.1	)%
Total cost of revenue for logistics services		769,277	77.0	%		1,043,780		75.0	%		(274,503	)	(26.3	)%
Gross Profit for logistics services		229,356	23.0	%		347,102		25.0	%		(117,746	)	(33.9	)%
											0
Net revenue for property management and subleasing		-	0	%		954,835		100.0	%		(954,835	)	100.0	%
Total cost of revenue for property management and subleasing		-	0	%		848,451		88.9	%		(848,451	)	100.0	%
Gross Profit for property management and subleasing		-	0	%		106,384		11.1	%		(106,384	)	100.0	%

Net revenue for epidemic prevention supplies	$	-	0	%	$	241		100.0	%		(241	)	100.0	%
Other and Overhead		-	0	%		394		163.5	%		(394	)	100.0	%
Total cost of revenue for epidemic prevention supplies		-	0	%		394		163.5	%		(394	)	100.0	%
Gross (loss) income for epidemic prevention supplies		-	0	%		(153	)	63.5	%		153		100.0	%
Total cost of revenue	$	815,597	77.5	%	$	1,929,700		80.9	%	$	1,114,103		57.7	%
Gross profit	$	236,909	22.5	%	$	456,684		19.1	%	$	(219,775	)	(48.1	)%

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

Raw material costs for our garment manufacturing business were approximately 49.0% of our total garment manufacturing business revenue for the three months ended June 30, 2023, as compared with 69.1% for the three months ended June 30, 2022. The decrease in percentages was mainly due to the purchase cost of the raw materials dropped.

Labor costs for our garment manufacturing business was approximately 32.0% of our total garment manufacturing business revenue for the three months ended June 30, 2023, as compared with 21.1% for the three months ended June 30, 2022. The increase was mainly due to the rising wages in the PRC.

Overhead and other expenses for our garment manufacturing business accounted for approximately 5.0% of our total garment business revenue for the three months ended June 30, 2023, as compared with 1.4% of total garment business revenue for the three months ended June 30, 2022.

For our logistic business, we outsource some of the business to our contractors. The Company relied on a few subcontractors, which the subcontracting fees to our largest contractor represented approximately 37.2% and 35.6% of total cost of revenues for our service segment for the three months ended June 30, 2023 and 2022, respectively. The decreased was attributed to an increase usage of our own logistics as compared to the subcontractors during the COVID-19 epidemic. We have not experienced any disputes with our subcontractors and we believe we maintain good relationships with our contract logistics services provider.

Fuel, toll and other costs for our service business for the three months ended June 30, 2023 were approximately $0.5 million as compared with $0.6 million for the three months ended June 30, 2022. Fuel, toll and other costs for our service business accounted for approximately 48.3% of our total service revenue for the three months ended June 30, 2023, as compared with 44.3% for the three months ended June 30, 2022. The increase was primarily attributable to a decrease of usage of subcontractors during the COVID-19 epidemic.

Subcontracting fees for our service business for the three months ended June 30, 2023 decreased approximately 35.1% to $0.3 million from $0.4 million for the three months ended June 30, 2022. Subcontracting fees accounted for 28.7% and 31.7% of our total service business revenue in the three months ended June 30, 2023 and 2022, respectively. The decrease was primarily attributable to a decrease of usage of subcontractors during the COVID-19 epidemic.

For property management and subleasing business, the cost of revenue was mainly the amortization of operating lease assets for the subleasing business. The Company disposed of DY in February, 2023. Therefore, there was no revenue from this segment in the quarter.

Gross profit

Garment manufacturing business gross profit for the three months ended June 30, 2023 was approximately $8,000, as compared with approximately $3,000 for the three months ended June 30, 2022. Gross profit accounted for 14.0% of our total garment manufacturing business revenue for the three months ended June 30, 2023, as compared to 8.3% for the three months ended June 30, 2022.

Gross profit in our logistics services business for the three months ended June 30, 2023 was approximately $229,000 and gross margin was 23.0%. Gross profit in our logistics services business for the three months ended June 30, 2022 was approximately $347,000 and gross margin was 25.0%. The decrease of gross profit ratio was mainly because the Company did not generate as many orders as before but the operating expenses is fixed which caused a decrease in gross profit.

Gross profit in our property management and subleasing business for the three months ended June 30, 2023 was nil. It was approximately $106,000, or 11.1% for the three months ended June 30, 2022.

	Three months ended June 30,										Increase (decrease) in
	2023					2022					2023 compared to 2022
	(In U.S. dollars, except for percentages)
Gross profit	$	236,909		100	%	$	456,684		100	%		(219,775	)	(48.1	)%
Operating expenses:
Selling expenses		-		-			(5,642	)	(1.2	)%		5,642		100.0	%
General and administrative expenses		(497,858	)	(210.1	)%		(404,940	)	(88.7	)%		92,918		22.9	%
Total	$	(497,858	)	(210.1	)%	$	(410,582	)	(89.9	)%		87,276		21.3	%
(Loss) Income from operations	$	(260,949	)	(110.1	)%	$	46,102		10.1	%		(307,051	)	(666.0	)%

Selling, General and administrative expenses

Our selling expenses were mainly incurred for our property management and subleasing business. It was nil and approximately $6,000 for the three months ended June 30, 2023 and 2022, respectively. Selling expenses consisted primarily of advertisement, local transportation, unloading charges and product inspection charges.

Our general and administrative expenses in our garment manufacturing business segment for the three months ended June 30, 2023 and 2022 was both approximately $32,000, respectively. Our general and administrative expenses in our logistics services segment for the three months ended June 30, 2023 and 2022 was both approximately $227,000, respectively. The general and administrative expenses in our property management and subleasing business was approximately nil and $67,000 for the three months ended June 30, 2023 and 2022, respectively. Our general and administrative expenses in our corporate office for the three months ended June 30, 2023 and 2022 was approximately $241,000 and $79,000, respectively. General and administrative expenses consisted primarily of administrative salaries, office expense, certain depreciation and amortization charges, repairs and maintenance, legal and professional fees, warehousing costs and other expenses that are not directly attributable to our revenues.

Total general and administrative expenses for the three months ended June 30, 2023 increased by approximately 22.9% to $498,000 from $405,000 for the three months ended June 30, 2022.

(Loss) Income from operations

Loss from operations for the three months ended June 30, 2023 was approximately $261,000, while income from operations for the three months ended June 30, 2022 was $46,000. Loss from operations of approximately $22,000 and $29,000 for the three months ended June 30, 2023 and 2022 was attributed from our garment manufacturing segment, respectively. Income from operations of approximately $2,000 and $120,000 was attributed from our logistics services segment for the three months ended June 30, 2023 and 2022, respectively. Income from operations of approximately nil and $34,000 for the three months ended June 30, 2023 and 2022 was attributed from our property management and subleasing business, respectively. We incurred expenses from operations in corporate office of approximately $241,000 and $79,000 for the three months ended June 30, 2023 and 2022, respectively. The increase of expenses from our corporate office was mainly due to increase in legal and professional fees to comply with the SEC accounting, disclosure and reporting requirements.

Income Tax Expenses

Income tax expense for the three months ended June 30, 2023 and 2022 was both approximately $1,000, respectively. The Company operates in the PRC and files tax returns in the PRC jurisdictions.

Yingxi Industrial Chain Group Co., Ltd was incorporated in the Republic of Seychelles and, under the current laws of the British Virgin Islands, is not subject to income taxes.

Yingxi HK was incorporated in Hong Kong and is subject to Hong Kong income tax at a progressive tax rate of 16.5%. No provision for income taxes in Hong Kong has been made as Yingxi HK had no taxable income for the three months ended June 30, 2023 and 2022.

QYTG and YX were incorporated in the PRC and is subject to the PRC Enterprise Income Tax (EIT) rate is 25%. No provision for income taxes in the PRC has been made as QYTG and YX had no taxable income for the three months ended June 30, 2023 and 2022.

The Company is governed by the Income Tax Laws of the PRC. All Yingxi’s operating companies are subject to progressive EIT rates from 5% to 15% in 2023. The preferential tax rates will be expired at end of year 2023.

The Company’s parent entity, Addentax Group Corp. is a U.S. entity and is subject to the United States federal income tax. No provision for income taxes in the United States has been made as Addentax Group Corp. had no United States taxable income for the three months ended June 30, 2023 and 2022.

Net Income (Loss)

We incurred net loss of approximately $2.7 million for the three months ended June 30, 2023 and a net income of approximately $0.1 million for the three months ended June 30, 2022. Our basic and diluted earnings per share were ($0.83) and $0.00 for the three months ended June 30, 2023 and 2022, respectively.

Summary of cash flows

Summary cash flows information for the three months ended June 30, 2023 and 2022 is as follow:

	Three months ended June 30,
	2023			2022
	(In U.S. dollars)
Net cash provided by (used in) operating activities	$	(1,110,878	)	$	278,018
Net cash provided by financing activities	$	969,784		$	615,848

Net cash (used in) provided by operating activities in the three months ended June 30, 2023 was approximately $1.4 million less than that of the three months ended June 30, 2022. It was mainly due to (i) net loss with adjustments to reconcile net loss to cash flow of $0.2 million for the three months ended June 30, 2023 compared to the net income after adjustments to cash flow of $0.1 million for the three months ended June 30, 2022, (ii) the movement of operating assets and liabilities of the three months ended June 30, 2023 resulted in cash outflow of approximately $0.93 million, while the movement of operating assets and liabilities of the three months ended June 30, 2022 resulted in cash inflow of approximately $0.14 million. We will continue to improve our operating cash flow by closely monitoring the timely collection of accounts and other receivables. We generally do not hold any significant inventory for more than ninety days, as we typically manufacture upon customers’ order.

Net cash provided by financing activities for the three months ended June 30, 2023 was approximately $0.4 million more than the three months ended June 30, 2022. It was mainly due to the release of restricted cash of approximately $1.6 million more than that of the three months ended June 30, 2022.

Financial Condition, Liquidity and Capital Resources

As of June 30, 2023, we had cash on hand of approximately $0.5 million, total current assets of approximately $37.2 million and current liabilities of approximately $3.1 million. We presently finance our operations from revenue, fund raising from our initial public offering proceeds and capital contributions from our chief executive officer, Mr. Hong Zhida (the “CEO”).

In the event that the Company requires additional funding to finance the growth of the Company’s current and expected future operations as well as to achieve our strategic objectives, the CEO has indicated the intent and ability to provide additional equity financing.

Foreign Currency Translation Risk

Our operations are located in China, which may give rise to significant foreign currency risks from fluctuations and the degree of volatility in foreign exchange rates between the U.S. dollar and the Chinese Renminbi (“RMB”). All of our sales are in RMB. In the past years, RMB continued to appreciate against the U.S. dollar. As of June 30, 2023, the market foreign exchange rate was RMB 7.25 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 capital and various reserves are translated at historical exchange rates prevailing at the time of the transactions while income and expenses items are translated at the average exchange rate for the period. All translation adjustments are included in accumulated other comprehensive income in the statement of equity. The foreign currency translation gain (loss) for the three months ended June 30, 2023 and 2022 was approximately $0.09 million and $0.11 million respectively.

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 June 30, 2023 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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable to smaller reporting companies.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of June 30, 2023. Based on the evaluation of these disclosure controls and procedures, and in light of the material weaknesses found in our internal controls over financial reporting, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective.

Changes in Internal Controls over Financial Reporting

There was no change in the Company’s internal control over financial reporting period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. We 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 1A. Risk Factors

As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 1A.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

There is no other information required to be disclosed under this item, which was not previously disclosed.

Item 6. Exhibits

Exhibit Number		Description
(31)		Rule 13a-14 (d)/15d-14d) Certifications
31.1*		Section 302 Certification by the Principal Executive Officer
31.2*		Section 302 Certification by the Principal Financial Officer and Principal Accounting Officer
(32)		Section 1350 Certifications
32.1*		Section 906 Certification by the Principal Executive Officer
32.2*		Section 906 Certification by the Principal Financial Officer and Principal Accounting Officer
101*		Interactive Data File
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

*Filed herewith.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Addentax Group Corp.

Date: August 14, 2023	By:	/s/ Hong Zhida
		Hong Zhida
		President, Chief Executive Officer and Director,
		(Principal Executive Officer)

Date: August 14, 2023	By:	/s/ Huang Chao
		Huang Chao
		Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)

Exhibit 31.1

CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Hong Zhida, certify that:

	1.	I have reviewed this quarterly report on Form 10-Q of Addentax Group Corp.;

	2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

	3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

	4.	I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

	5.	I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

		(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

		(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2023

	/s/ Hong Zhida
	Hong Zhida
	President, Chief Executive Officer, Secretary and Director
	(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Huang Chao, certify that:

	1.	I have reviewed this quarterly report on Form 10-Q of Addentax Group Corp.;

	2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

	3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

	4.	I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

	5.	I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

		(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

		(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2023

	/s/ Huang Chao
	Huang
	Chao Chief Financial Officer and Treasurer
	(Principal Financial Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, Hong Zhida, Chief Executive Officer, of Addentax Group Corp., hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

	(1)	the quarterly report on Form 10-Q of Addentax Group Corp. for the period ended June 30, 2023 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

	(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Addentax Group Corp.

	Dated: August 14, 2023
	/s/ Hong Zhida
	Hong Zhida
	President, Chief Executive Officer, Secretary and Director
	(Principal Executive Officer)

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Addentax Group Corp. and will be retained by Addentax Group Corp. and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, Huang Chao, Chief Financial Officer, of Addentax Group Corp., hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

	(1)	the quarterly report on Form 10-Q of Addentax Group Corp. for the period ended June 30, 2023 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

	(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Addentax Group Corp.

Dated: August 14, 2023

/s/ Huang Chao

Huang Chao

Chief Financial Officer, Treasurer

(Principal Financial Officer)

Cover - shares	3 Months Ended
Cover - shares	Jun. 30, 2023	Aug. 14, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2023
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--03-31
Entity File Number	333-206097
Entity Registrant Name	ADDENTAX GROUP CORP.
Entity Central Index Key	0001650101
Entity Tax Identification Number	35-2521028
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	Kingkey 100, Block A
Entity Address, Address Line Two	Room 4805
Entity Address, Address Line Three	Luohu District
Entity Address, City or Town	Shenzhen City
Entity Address, Country	CN
Entity Address, Postal Zip Code	518000
City Area Code	(86)
Local Phone Number	755 86961 405
Title of 12(b) Security	Common Stock
Trading Symbol	ATXG
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		4,294,979

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2023	Mar. 31, 2023
CURRENT ASSETS
Cash and cash equivalents	$ 487,215	$ 562,711
Restricted cash	5,750,000
Accounts receivables, net	1,963,293	1,858,889
Debt securities held-to-maturity	17,828,125	17,718,750
Inventories	265,742	285,528
Prepayments and other receivables	8,506,690	959,196
Advances to suppliers	1,903,164	1,281,075
Total current assets	37,214,937	23,041,241
NON-CURRENT ASSETS
Plant and equipment, net	586,492	649,120
Long-term prepayments	57,876	90,032
Restricted cash		14,750,000
Long-term receivables	2,500,000	2,500,000
Operating lease right of use asset	232,350	272,488
Total non-current assets	3,376,718	18,261,640
TOTAL ASSETS	40,591,655	41,302,881
CURRENT LIABILITIES
Short-term loan	130,176	137,468
Accounts payable	254,288	267,501
Advances from customers		2,152
Accrued expenses and other payables	462,469	606,843
Operating lease liability current portion	120,359	127,101
Total current liabilities	3,060,317	3,525,698
NON-CURRENT LIABILITIES
Convertible debts	8,510,226	11,219,519
Derivative liabilities	4,582,560	2,290,483
Operating lease liability	111,991	145,387
Total non-current liabilities	13,204,777	13,655,389
TOTAL LIABILITIES	16,265,094	17,181,087
EQUITY
Common stock ($0.001 par value, 250,000,000 shares authorized, 3,739,581 and 35,454,670 shares issued and outstanding at June 30 and March 31, 2023, respectively)	3,740	35,455
Additional paid-in capital	32,406,317	29,528,564
Accumulated Deficit	(8,179,930)	(5,451,209)
Statutory reserve	28,457	28,457
Accumulated other comprehensive loss	67,977	(19,473)
Total equity	24,326,561	24,121,794
TOTAL LIABILITIES AND EQUITY	40,591,655	41,302,881
Related Party [Member]
CURRENT ASSETS
Amount due from related party	510,708	375,092
CURRENT LIABILITIES
Amount due to related parties	$ 2,093,025	$ 2,384,633

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2023	Mar. 31, 2023
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	3,739,581	35,454,670
Common stock, shares outstanding	3,739,581	35,454,670

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
REVENUES	$ 1,052,506	$ 2,386,384
COST OF REVENUES	(815,597)	(1,929,700)
GROSS PROFIT	236,909	456,684
OPERATING EXPENSES
Selling and marketing		(5,642)
General and administrative	(497,858)	(404,940)
Total operating expenses	(497,858)	(410,582)
(LOSS) INCOME FROM OPERATIONS	(260,949)	46,102
Fair value gain or loss	(1,288,003)
Interest income	1,724	3,238
Interest expenses	(1,292,715)	(2,458)
Other income (expense), net	112,486	51,083
(LOSS) INCOME BEFORE INCOME TAX EXPENSE	(2,727,457)	97,965
INCOME TAX EXPENSE	(1,264)	(1,294)
NET (LOSS) INCOME	(2,728,721)	96,671
Foreign currency translation gain (loss)	87,450	105,149
TOTAL COMPREHENSIVE (LOSS) INCOME	$ (2,641,271)	$ 201,820
EARNINGS (LOSS) PER SHARE
Earnings (Loss) per share, Basic	$ (0.83)	$ 0.00
Earnings (Loss) per share, Diluted	$ (0.83)	$ 0.00
Weighted average number of shares outstanding - Basic	3,273,964	26,693,004
Weighted average number of shares outstanding - Diluted	3,273,964	26,693,004

Condensed Consolidated Statements of Changes in Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings Unrestricted [Member]	Retained Earnings Statutor Reserve [Member]	AOCI Attributable to Parent [Member]	Total
Balance, value at Mar. 31, 2022	$ 26,693	$ 6,815,333	$ (6,756,230)	$ 13,821	$ (170,984)	$ (71,367)
Balance, shares at Mar. 31, 2022	26,693,004
Foreign currency translation					105,149	105,149
Net income for the period			96,671			96,671
Balance, value at Jun. 30, 2022	$ 26,693	6,815,333	(6,659,559)	13,821	(65,835)	130,453
Balance, shares at Jun. 30, 2022	26,693,004
Balance, value at Mar. 31, 2023	$ 35,455	29,528,564	(5,451,209)	28,457	(19,473)	24,121,794
Balance, shares at Mar. 31, 2023	35,454,670
Foreign currency translation					87,450	87,450
Net income for the period			(2,728,721)			(2,728,721)
Issuance of new shares	$ 1,941	(1,941)
Issuance of new shares, shares	1,940,750
Reverse stock split	$ (33,656)	33,656
Reverse stoc split, shares	(33,655,878)					3,739,581
New shares for round up of fragmental shares	$ 0	0
New shares for round up of fracmental shares, shares	39
Additional paid-in capital from conversion of convertible debts		2,846,038				2,846,038
Balance, value at Jun. 30, 2023	$ 3,740	$ 32,406,317	$ (8,179,930)	$ 28,457	$ 67,977	$ 24,326,561
Balance, shares at Jun. 30, 2023	3,739,581

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended		12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Mar. 31, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$ (2,728,721)	$ 96,671
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation	74,783	35,883
Non-cash financial cost	1,290,818
Investment income	(109,375)
Fair value gain or loss	1,288,003
Changes in operating assets and liabilities
Accounts receivable	(104,404)	27,217
Inventories	19,786	3,337
Advances to suppliers	(622,089)	91,378
Other receivables	(47,494)	(443,140)
Accounts payables	(25,659)	(83,529)
Accrued expenses and other payables	(144,374)	549,880
Advances from customers	(2,152)	321
Net cash (used in) provided by operating activities	(1,110,878)	278,018
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from related party borrowings	1,451,157	980,724
Repayment of related party borrowings	(1,831,373)	(364,452)
Release of restricted cash	1,350,000
Repayment of bank borrowings		(424)
Net cash provided by financing activities	969,784	615,848
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(141,094)	893,866
Effect of exchange rate changes on cash and cash equivalents	65,598	(52,162)
Cash and cash equivalents, beginning of the period	562,711	1,390,644	$ 1,390,644
CASH AND CASH EQUIVALENTS, END OF THE PERIOD	487,215	2,232,348	$ 562,711
Supplemental disclosure of cash flow information:
Cash paid during the period for interest
Cash paid during the period for income tax	1,264	1,294
Supplemental disclosure of non-cash investing and financing activities:
Right-of-use assets obtained in exchange for operating lease obligations	$ 1,219

ORGANIZATION AND BUSINESS ACQUISITIONS

3 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

ORGANIZATION AND BUSINESS ACQUISITIONS

1. ORGANIZATION AND BUSINESS ACQUISITIONS

BASIS OF PRESENTATION

3 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION

2. BASIS OF PRESENTATION

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

There is no change in the accounting policies for the three months ended June 30, 2023.

Recently issued accounting pronouncements

RELATED PARTY TRANSACTIONS

3 Months Ended

Jun. 30, 2023

RELATED PARTY TRANSACTIONS

4. RELATED PARTY TRANSACTIONS

Name of Related Parties		Relationship with the Company
Zhida Hong		President, CEO, and a director of the Company
Hongye Financial Consulting (Shenzhen) Co., Ltd.		A company controlled by CEO, Mr. Zhida Hong
Bihua Yang		A legal representative of XKJ
Dewu Huang		A legal representative of YBY
Jinlong Huang		Management of HSW

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

The Company had the following related party balances as of June 30, 2023 and March 31, 2023:

Amount due from related party	June 30, 2023		March 31, 2023
Zhida Hong	$	58,079	$	-
Bihua Yang		452,629		375,092
Amount due from related party	$	510,708	$	375,092

SCHEDULE OF RELATED PARTIES BORROWINGS

Related party borrowings	June 30, 2023		March 31, 2023
Zhida Hong (1)	$	-	$	901,110
Hongye Financial Consulting (Shenzhen) Co., Ltd.		84,901		45,841
Dewu Huang (2)		1,917,581		1,305,758
Jinlong Huang		90,543		131,924
Total Related party borrowings	$	2,093,025	$	2,384,633

	(1)	Being interest free loan as financial support from Zhida Hong to daily operation of the Company.

	(2)	Being interest free loan as financial support from Dewu Huang to pay for daily operating expenditures of YBY.

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

DEBT SECURITIES HELD-TO-MATURITY

3 Months Ended

Jun. 30, 2023

Investments, Debt and Equity Securities [Abstract]

DEBT SECURITIES HELD-TO-MATURITY

5. DEBT SECURITIES HELD-TO-MATURITY

	June 30, 2023		March 31, 2023

Debt securities held-to-maturity	$	17,828,125	$	17,718,750

INVENTORIES

3 Months Ended

Jun. 30, 2023

Inventory Disclosure [Abstract]

INVENTORIES

6. INVENTORIES

Inventories consist of the following as of June 30, 2023 and March 31, 2023:

SCHEDULE OF INVENTORIES

	June 30, 2023		March 31, 2023
Raw materials	$	16,147	$	19,484
Work in progress		17,756		9,373
Finished goods		231,839		256,671
Total inventories	$	265,742	$	285,528

ADVANCES TO SUPPLIERS

3 Months Ended

Jun. 30, 2023

Advances To Suppliers

ADVANCES TO SUPPLIERS

7. ADVANCES TO SUPPLIERS

PREPAYMENTS AND OTHER RECEIVABLES

3 Months Ended

Jun. 30, 2023

Receivables [Abstract]

PREPAYMENTS AND OTHER RECEIVABLES

8. PREPAYMENTS AND OTHER RECEIVABLES

Prepayments and other receivables consist of the following as of June 30, 2023 and March 31, 2023:

	June 30, 2023		March 31, 2023
Prepayment		16,031		10,913
Deposit		42,337		40,341
Receivable of consideration on disposal of subsidiaries		667,342		708,457
Receivable of consideration of convertible note issued (Note)		7,500,000		-
Other receivables		280,980		199,485
Total Prepayment	$	8,506,690	$	959,196

PROPERTY, PLANT AND EQUIPMENT

3 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT AND EQUIPMENT

9. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of the following as of June 30, 2023 and March 31, 2023:

SCHEDULE OF PLANT AND EQUIPMENT

	June 30, 2023			March 31, 2023
Production plant	$	64,720		$	68,345
Motor vehicles		1,042,298			1,100,683
Office equipment		24,645			26,025
Total gross		1,131,663			1,195,053
Less: accumulated depreciation		(545,171	)		(545,933	)
Plant and equipment, net	$	586,492		$	649,120

Depreciation expense for the three months ended June 30, 2023 and 2022 was $33,982 and $35,883, respectively.

LONG-TERM RECEIVABLES

3 Months Ended

Jun. 30, 2023

Receivables [Abstract]

LONG-TERM RECEIVABLES

10. LONG-TERM RECEIVABLES

SHORT-TERM BANK LOAN

3 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

SHORT-TERM BANK LOAN

11. SHORT-TERM BANK LOAN

TAXATION

3 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

TAXATION

12. TAXATION

(a)	Enterprise Income Tax (“EIT”)

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

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

	2023			2022
	Three months ended
	June 30,
	2023			2022
PRC statutory tax rate		25	%		25	%
Computed expected benefits (expense)		(681,864	)		24,491
Temporary differences		6,150			(40,566	)
Permanent difference		82,125			(2,561
Changes in valuation allowance		594,853			19,930
Income tax expense	$	1,264		$	1,294

(b)	Value Added Tax (“VAT”)

CONSOLIDATED SEGMENT DATA

3 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

CONSOLIDATED SEGMENT DATA

13. CONSOLIDATED SEGMENT DATA

	(a)	Garment manufacturing. Including manufacturing and distribution of garments;

	(b)	Logistics services. Providing logistic services; and

	(c)	Property management and subleasing. Providing shops subleasing and property management services for garment wholesalers and retailers in garment market.

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

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

Revenues by segment for the three months ended June 30, 2023 and 2022 are as follows:

Revenues from external customers	2023		2022
	Three months ended June 30,
Revenues from external customers	2023		2022
Garments manufacturing segment	$	53,873	$	40,426
Logistics services segment		998,633		1,390,882
Property management and subleasing		-		954,835
Total of reportable segments		1,052,506		2,386,143
Corporate and other		-		241
Total of reportable segments and consolidated revenue	$	1,052,506	$	2,386,384

Intersegment revenue
Garments manufacturing segment		-		-
Total of reportable segments and consolidated revenue		-		-

(Loss) Income from operations by segment for the three ended June 30, 2023 and 2022 are as follows:

Revenues from external customers	2023			2022
	Three months ended
	June 30,
	2023			2022
Garment manufacturing segment	$	(22,155	)	$	(28,656	)
Logistics services segment		1,934			120,041
Property management and subleasing		-			34,097
Total of reportable segments		(20,221	)		125,482
Corporate and other		(240,728	)		(79,380	)
Total consolidated income from operations	$	(260,949	)	$	46,102

Total assets by segment as of June 30, 2023 and March 31, 2023 are as follows:

Total assets	June 30, 2023		March 31, 2023
Garment manufacturing segment	$	2,699,607	$	2,169,973
Logistics services segment		2,272,917		2,476,841

Total of reportable segments		4,972,524		4,646,814
Corporate and other		35,619,131		36,656,067
Consolidated total assets	$	40,591,655	$	41,302,881

Geographical Information

Geographic Information

SCHEDULE OF GEOGRAPHICAL INFORMATION

	Three months ended June 30,
	2023		2022
Revenues
China		1,052,506		2,386,384

	June 30, 2023		March 31, 2023
Long-Lived Assets
China		3,376,718		3,511,640

FINANCIAL INSTRUMENTS

3 Months Ended

Jun. 30, 2023

Investments, All Other Investments [Abstract]

FINANCIAL INSTRUMENTS

14. FINANCIAL INSTRUMENTS

	●	senior secured convertible notes in the aggregate original principal amount of approximately $16.7 million with interest rate of 5% per annum (the “Convertible Notes”); The Convertible Notes shall be matured on July 4, 2024. The conversion price is $1.25, subject to adjustment under several conditions.
	●	warrants to purchase up to approximately 16.1 million shares of common stock of the Company (the “Common Stock”) until on or prior to 11:59 p.m. (New York time) on the five-year anniversary of the closing date at an exercise price of $1.25 per share, also subject to adjustment under several conditions.

SCHEDULE OF FINANCIAL INSTRUMENTS

	As of January 4, 2023

Derivative liabilities – Fair value of the Warrants	$	3,858,521
Derivative liabilities – Embedded conversion feature		1,247,500
Convertible Note		9,893,979
Total	$	15,000,000

The Company’s convertible notes obligations were as the following for the three months ended March 31, 2023 and 2022:

	2023			2022

	Three months ended
	June 30,
	2023			2022
Carrying value – beginning balance	$	11,219,519		$	-
Converted to ordinary shares		(2,882,444	)		-
Amortization of debt discount		914,196			-
Deferred debt discount and cost of issuance		(1,117,667	)		-
Interest charge		376,622			-
Carrying value – ending balance	$	8,510,226		$	-

During the period, $1.5 million of the convertible notes was converted into approximately 2.3 million ordinary shares, with average effective conversion price of $0.6795 per share.

The Company’s derivative liabilities were as the following for the three months ended March 31, 2023 and 2022:

SCHEDULE OF DERIVATIVE LIABILITIES

	2023			2022
	Three months ended
	June 30,
	2023			2022
Derivative liabilities –Warrants	$			$	-
Beginning balance		2,013,261			-
Marked to the market		805,302			-
Ending fair value		2,818,563			-

Derivative liabilities – Embedded conversion feature
Beginning balance		277,222			-
Converted to ordinary shares		(113,594	)		-
Remeasurement on change of convertible price		1,117,667			-
Marked to the market		482,702			-
Ending fair value		1,763,997			-
					-
Total Derivative fair value at end of period	$	4,582,560		$	-

LEASE RIGHT-OF-USE ASSET AND LEASE LIABILITIES

3 Months Ended

Jun. 30, 2023

Lease Right-of-use Asset And Lease Liabilities

LEASE RIGHT-OF-USE ASSET AND LEASE LIABILITIES

15. LEASE RIGHT-OF-USE ASSET AND LEASE LIABILITIES

The Following table summarizes the components of lease expense:

SCHEDULE OF LEASE COST

	2023		2022
	Three months ended June 30,
	2023		2022
Operating lease cost		43,438		944,549
Short-term lease cost		23,557		20,444
Lease Cost	$	66,995	$	964,993

The following table summarizes supplemental information related to leases:

	2023			2022
	Three months ended June 30,
	2023			2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flow from operating leases	$	66,995		$	964,993
Right-of-use assets obtained in exchange for new operating leases liabilities		1,219			-
Weighted average remaining lease term - Operating leases (years)		2.0			1.5
Weighted average discount rate - Operating leases		4.75	%		4.75	%

The following table summarizes the maturity of operating lease liabilities:

Years ending June 30	Lease cost
2024	$	126,076
2025		114,096
2026		9,205

Total lease payments		249,377
Less: Interest		(17,027	)
Total	$	232,350

SHARE CAPITAL

3 Months Ended

Jun. 30, 2023

Share Capital

SHARE CAPITAL

16. SHARE CAPITAL

RISKS AND UNCERTAINTIES

3 Months Ended

Jun. 30, 2023

Risks and Uncertainties [Abstract]

RISKS AND UNCERTAINTIES

17. RISKS AND UNCERTAINTIES

(a)

Economic and Political Risks

(b)

Foreign Currency Translation

(c)

Concentration Risks

The followings are the percentages of accounts receivable balance of the top customers over accounts receivable for each segment as of June 30, 2023 and March 31, 2023.

Garment manufacturing segment

SCHEDULE OF CONCENTRATION RISKS

	June 30, 2023			March 31, 2023
Customer A		88.4	%		85.3	%
Customer B		10.6	%		11.4	%

Logistics services segment

	June 30, 2023			March 31, 2023
Customer A		24.2	%		11.4	%
Customer B		17.0	%		14.1	%
Customer C		8.8	%		7.3	%
Customer D		7.1	%		2.5	%
Customer E		6.9	%		6.4	%

Property management and subleasing segment

There is no account receivable for Property management and subleasing segment as for June 30, and March 31, 2023.

Epidemic prevention supplies segment

The accounts receivable of Epidemic prevention supplies segment as of June 30, 2022 was from one customer only. There was no more sales in year ended June 30, 2023.

Concentration on customers

Management believes that should the Company lose any one of its major customers, it was able to sell similar products to other customers.

Concentration on suppliers

The following tables summarized the purchases from five largest suppliers of each of the reportable segment for the three months ended June 30, 2023 and 2022.

SCHEDULE OF PURCHASES FROM SUPPLIERS

	Three months ended
	June 30,
	2023			2022
Garment manufacturing segment		Nil	%		Nil	%
Logistics services segment		100.0	%		100.0	%
Property management and subleasing		Nil	%		100.0	%

(d)

Interest Rate Risk

SUBSEQUENT EVENTS

3 Months Ended

Jun. 30, 2023

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

18. SUBSEQUENT EVENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	Jun. 30, 2023
Accounting Policies [Abstract]
Use of Estimates	Use of Estimates The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ materially from those estimates. There is no change in the accounting policies for the three months ended June 30, 2023.
Recently issued accounting pronouncements	Recently issued accounting pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. This standard requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. This standard will be effective for the Company on April 1, 2023. The Company is currently evaluating the impact the adoption of this ASU will have on its consolidated financial statements. Accounting for Convertible Instruments: In August 2020, FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (ASU 2020-06), as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Among other changes, the new guidance removes from GAAP separation models for convertible debt that require the convertible debt to be separated into a debt and equity component, unless the conversion feature is required to be bifurcated and accounted for as a derivative or the debt is issued at a substantial premium. As a result, after adopting the guidance, entities will no longer separately present such embedded conversion features in equity and will instead account for the convertible debt wholly as debt. The new guidance also requires use of the “if-converted” method when calculating the dilutive impact of convertible debt on earnings per share, which is consistent with the Company’s current accounting treatment under the current guidance. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted, but only at the beginning of the fiscal year. The Company reviews new accounting standards as issued. Management has not identified any other new standards that it believes will have a significant impact on the Company’s consolidated financial statements.

RELATED PARTY TRANSACTIONS (Tables)

3 Months Ended

Jun. 30, 2023

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

Name of Related Parties		Relationship with the Company
Zhida Hong		President, CEO, and a director of the Company
Hongye Financial Consulting (Shenzhen) Co., Ltd.		A company controlled by CEO, Mr. Zhida Hong
Bihua Yang		A legal representative of XKJ
Dewu Huang		A legal representative of YBY
Jinlong Huang		Management of HSW

SCHEDULE OF AMOUNT DUE FROM RELATED PARTY

The Company had the following related party balances as of June 30, 2023 and March 31, 2023:

Amount due from related party	June 30, 2023		March 31, 2023
Zhida Hong	$	58,079	$	-
Bihua Yang		452,629		375,092
Amount due from related party	$	510,708	$	375,092

SCHEDULE OF RELATED PARTIES BORROWINGS

Related party borrowings	June 30, 2023		March 31, 2023
Zhida Hong (1)	$	-	$	901,110
Hongye Financial Consulting (Shenzhen) Co., Ltd.		84,901		45,841
Dewu Huang (2)		1,917,581		1,305,758
Jinlong Huang		90,543		131,924
Total Related party borrowings	$	2,093,025	$	2,384,633

	(1)	Being interest free loan as financial support from Zhida Hong to daily operation of the Company.

	(2)	Being interest free loan as financial support from Dewu Huang to pay for daily operating expenditures of YBY.

DEBT SECURITIES HELD-TO-MATURITY (Tables)

3 Months Ended

Jun. 30, 2023

Investments, Debt and Equity Securities [Abstract]

SCHEDULE OF DEBT SECURITIES HELD TO MATURITY

	June 30, 2023		March 31, 2023

Debt securities held-to-maturity	$	17,828,125	$	17,718,750

INVENTORIES (Tables)

3 Months Ended

Jun. 30, 2023

Inventory Disclosure [Abstract]

SCHEDULE OF INVENTORIES

Inventories consist of the following as of June 30, 2023 and March 31, 2023:

SCHEDULE OF INVENTORIES

	June 30, 2023		March 31, 2023
Raw materials	$	16,147	$	19,484
Work in progress		17,756		9,373
Finished goods		231,839		256,671
Total inventories	$	265,742	$	285,528

PREPAYMENTS AND OTHER RECEIVABLES (Tables)

3 Months Ended

Jun. 30, 2023

Receivables [Abstract]

SCHEDULE OF PREPAYMENTS AND OTHER RECEIVABLES

Prepayments and other receivables consist of the following as of June 30, 2023 and March 31, 2023:

	June 30, 2023		March 31, 2023
Prepayment		16,031		10,913
Deposit		42,337		40,341
Receivable of consideration on disposal of subsidiaries		667,342		708,457
Receivable of consideration of convertible note issued (Note)		7,500,000		-
Other receivables		280,980		199,485
Total Prepayment	$	8,506,690	$	959,196

PROPERTY, PLANT AND EQUIPMENT (Tables)

3 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

SCHEDULE OF PLANT AND EQUIPMENT

Property, plant and equipment consists of the following as of June 30, 2023 and March 31, 2023:

SCHEDULE OF PLANT AND EQUIPMENT

	June 30, 2023			March 31, 2023
Production plant	$	64,720		$	68,345
Motor vehicles		1,042,298			1,100,683
Office equipment		24,645			26,025
Total gross		1,131,663			1,195,053
Less: accumulated depreciation		(545,171	)		(545,933	)
Plant and equipment, net	$	586,492		$	649,120

TAXATION (Tables)

3 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION

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

	2023			2022
	Three months ended
	June 30,
	2023			2022
PRC statutory tax rate		25	%		25	%
Computed expected benefits (expense)		(681,864	)		24,491
Temporary differences		6,150			(40,566	)
Permanent difference		82,125			(2,561
Changes in valuation allowance		594,853			19,930
Income tax expense	$	1,264		$	1,294

CONSOLIDATED SEGMENT DATA (Tables)

3 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

SCHEDULE OF SEGMENT REPORTING FOR REVENUE

Revenues by segment for the three months ended June 30, 2023 and 2022 are as follows:

Revenues from external customers	2023		2022
	Three months ended June 30,
Revenues from external customers	2023		2022
Garments manufacturing segment	$	53,873	$	40,426
Logistics services segment		998,633		1,390,882
Property management and subleasing		-		954,835
Total of reportable segments		1,052,506		2,386,143
Corporate and other		-		241
Total of reportable segments and consolidated revenue	$	1,052,506	$	2,386,384

Intersegment revenue
Garments manufacturing segment		-		-
Total of reportable segments and consolidated revenue		-		-

SCHEDULE OF SEGMENT REPORTING FOR (LOSS) INCOME FROM OPERATION

(Loss) Income from operations by segment for the three ended June 30, 2023 and 2022 are as follows:

Revenues from external customers	2023			2022
	Three months ended
	June 30,
	2023			2022
Garment manufacturing segment	$	(22,155	)	$	(28,656	)
Logistics services segment		1,934			120,041
Property management and subleasing		-			34,097
Total of reportable segments		(20,221	)		125,482
Corporate and other		(240,728	)		(79,380	)
Total consolidated income from operations	$	(260,949	)	$	46,102

SCHEDULE OF SEGMENT REPORTING FOR ASSETS

Total assets by segment as of June 30, 2023 and March 31, 2023 are as follows:

Total assets	June 30, 2023		March 31, 2023
Garment manufacturing segment	$	2,699,607	$	2,169,973
Logistics services segment		2,272,917		2,476,841

Total of reportable segments		4,972,524		4,646,814
Corporate and other		35,619,131		36,656,067
Consolidated total assets	$	40,591,655	$	41,302,881

SCHEDULE OF GEOGRAPHICAL INFORMATION

	Three months ended June 30,
	2023		2022
Revenues
China		1,052,506		2,386,384

	June 30, 2023		March 31, 2023
Long-Lived Assets
China		3,376,718		3,511,640

FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Jun. 30, 2023

Investments, All Other Investments [Abstract]

SCHEDULE OF FINANCIAL INSTRUMENTS

	As of January 4, 2023

Derivative liabilities – Fair value of the Warrants	$	3,858,521
Derivative liabilities – Embedded conversion feature		1,247,500
Convertible Note		9,893,979
Total	$	15,000,000

SCHEDULE OF CONVERTIBLE NOTES OBLIGATION

	2023			2022

	Three months ended
	June 30,
	2023			2022
Carrying value – beginning balance	$	11,219,519		$	-
Converted to ordinary shares		(2,882,444	)		-
Amortization of debt discount		914,196			-
Deferred debt discount and cost of issuance		(1,117,667	)		-
Interest charge		376,622			-
Carrying value – ending balance	$	8,510,226		$	-

SCHEDULE OF DERIVATIVE LIABILITIES

The Company’s derivative liabilities were as the following for the three months ended March 31, 2023 and 2022:

SCHEDULE OF DERIVATIVE LIABILITIES

	2023			2022
	Three months ended
	June 30,
	2023			2022
Derivative liabilities –Warrants	$			$	-
Beginning balance		2,013,261			-
Marked to the market		805,302			-
Ending fair value		2,818,563			-

Derivative liabilities – Embedded conversion feature
Beginning balance		277,222			-
Converted to ordinary shares		(113,594	)		-
Remeasurement on change of convertible price		1,117,667			-
Marked to the market		482,702			-
Ending fair value		1,763,997			-
					-
Total Derivative fair value at end of period	$	4,582,560		$	-

LEASE RIGHT-OF-USE ASSET AND LEASE LIABILITIES (Tables)

3 Months Ended

Jun. 30, 2023

Lease Right-of-use Asset And Lease Liabilities

SCHEDULE OF LEASE COST

The Following table summarizes the components of lease expense:

SCHEDULE OF LEASE COST

	2023		2022
	Three months ended June 30,
	2023		2022
Operating lease cost		43,438		944,549
Short-term lease cost		23,557		20,444
Lease Cost	$	66,995	$	964,993

SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASES

The following table summarizes supplemental information related to leases:

	2023			2022
	Three months ended June 30,
	2023			2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flow from operating leases	$	66,995		$	964,993
Right-of-use assets obtained in exchange for new operating leases liabilities		1,219			-
Weighted average remaining lease term - Operating leases (years)		2.0			1.5
Weighted average discount rate - Operating leases		4.75	%		4.75	%

SCHEDULE OF MATURITY OF OPERATING LEASE LIABILITY

The following table summarizes the maturity of operating lease liabilities:

Years ending June 30	Lease cost
2024	$	126,076
2025		114,096
2026		9,205

Total lease payments		249,377
Less: Interest		(17,027	)
Total	$	232,350

RISKS AND UNCERTAINTIES (Tables)

3 Months Ended

Jun. 30, 2023

Risks and Uncertainties [Abstract]

SCHEDULE OF CONCENTRATION RISKS

The followings are the percentages of accounts receivable balance of the top customers over accounts receivable for each segment as of June 30, 2023 and March 31, 2023.

Garment manufacturing segment

SCHEDULE OF CONCENTRATION RISKS

	June 30, 2023			March 31, 2023
Customer A		88.4	%		85.3	%
Customer B		10.6	%		11.4	%

Logistics services segment

	June 30, 2023			March 31, 2023
Customer A		24.2	%		11.4	%
Customer B		17.0	%		14.1	%
Customer C		8.8	%		7.3	%
Customer D		7.1	%		2.5	%
Customer E		6.9	%		6.4	%

SCHEDULE OF PURCHASES FROM SUPPLIERS

The following tables summarized the purchases from five largest suppliers of each of the reportable segment for the three months ended June 30, 2023 and 2022.

SCHEDULE OF PURCHASES FROM SUPPLIERS

	Three months ended
	June 30,
	2023			2022
Garment manufacturing segment		Nil	%		Nil	%
Logistics services segment		100.0	%		100.0	%
Property management and subleasing		Nil	%		100.0	%

SUMMARY OF FINANCIAL POSITION OF ENTITIES AND GAIN OR LOSS ON DISPOSAL (Details)	3 Months Ended
	Jun. 30, 2023
Zhida Hong [Member]
Related Party Transaction [Line Items]
Name of Related Parties	Zhida Hong
Relationship with the Company	President, CEO, and a director of the Company
Hongye Financial Consulting (Shenzhen) Co., Ltd. [Member]
Related Party Transaction [Line Items]
Name of Related Parties	Hongye Financial Consulting (Shenzhen) Co., Ltd.
Relationship with the Company	A company controlled by CEO, Mr. Zhida Hong
Bihua Yang [Member]
Related Party Transaction [Line Items]
Name of Related Parties	Bihua Yang
Relationship with the Company	A legal representative of XKJ
Dewu Huang [Member]
Related Party Transaction [Line Items]
Name of Related Parties	Dewu Huang
Relationship with the Company	A legal representative of YBY
Jinlong Huang [Member]
Related Party Transaction [Line Items]
Name of Related Parties	Jinlong Huang
Relationship with the Company	Management of HSW

SCHEDULE OF AMOUNT DUE FROM RELATED PARTY (Details) - USD ($)	Jun. 30, 2023	Mar. 31, 2023
Zhida Hong [Member]
Related Party Transaction [Line Items]
Amount due from related party	$ 58,079
Bihua Yang [Member]
Related Party Transaction [Line Items]
Amount due from related party	452,629	375,092
Related Party [Member]
Related Party Transaction [Line Items]
Amount due from related party	$ 510,708	$ 375,092

SCHEDULE OF RELATED PARTIES BORROWINGS (Details) - USD ($)

3 Months Ended

12 Months Ended

Jun. 30, 2023

Jun. 30, 2022

Mar. 31, 2023

Total Related party borrowings

$ 1,831,373

$ 364,452

Zhida Hong [Member]

Total Related party borrowings

^[1]

$ 901,110

Hongye Financial Consulting (Shenzhen) Co., Ltd. [Member]

Total Related party borrowings

84,901

45,841

Dewu Huang [Member]

Total Related party borrowings

^[2]

1,917,581

1,305,758

Jinlong Huang [Member]

Total Related party borrowings

90,543

131,924

Related Party [Member]

Total Related party borrowings

$ 2,093,025

$ 2,384,633

[1]	Being interest free loan as financial support from Zhida Hong to daily operation of the Company.
[2]	Being interest free loan as financial support from Dewu Huang to pay for daily operating expenditures of YBY.

SCHEDULE OF DEBT SECURITIES HELD TO MATURITY (Details) - USD ($)	Jun. 30, 2023	Mar. 31, 2023	Aug. 24, 2022
Investments, Debt and Equity Securities [Abstract]
Debt securities held-to-maturity	$ 17,828,125	$ 17,718,750	$ 17,500,000

DEBT SECURITIES HELD-TO-MATURITY (Details Narrative) - USD ($)	Jun. 30, 2023	Mar. 31, 2023	Jan. 04, 2023	Aug. 24, 2022
Investments, Debt and Equity Securities [Abstract]
Debt securities	$ 17,828,125	$ 17,718,750		$ 17,500,000
Debt interest percent	2.50%		5.00%
Coupon receivable	$ 328,125	$ 218,750

SCHEDULE OF INVENTORIES (Details) - USD ($)	Jun. 30, 2023	Mar. 31, 2023
Inventory Disclosure [Abstract]
Raw materials	$ 16,147	$ 19,484
Work in progress	17,756	9,373
Finished goods	231,839	256,671
Total inventories	$ 265,742	$ 285,528

SCHEDULE OF PREPAYMENTS AND OTHER RECEIVABLES (Details) - USD ($)	Jun. 30, 2023	Mar. 31, 2023
Receivables [Abstract]
Prepayment	$ 16,031	$ 10,913
Deposit	42,337	40,341
Receivable of consideration on disposal of subsidiaries	667,342	708,457
Receivable of consideration of convertible note issued (Note)	7,500,000
Other receivables	280,980	199,485
Total Prepayment	$ 8,506,690	$ 959,196

PREPAYMENTS AND OTHER RECEIVABLES (Details Narrative) - USD ($)	Jun. 30, 2023	Mar. 31, 2023
Receivables [Abstract]
Convertible note payable	$ 7,500,000
Convertible note payable redeemed	$ 7,500,000

SCHEDULE OF PLANT AND EQUIPMENT (Details) - USD ($)	Jun. 30, 2023	Mar. 31, 2023
Property, Plant and Equipment [Line Items]
Total gross	$ 1,131,663	$ 1,195,053
Less: accumulated depreciation	(545,171)	(545,933)
Plant and equipment, net	586,492	649,120
Production Plant [Member]
Property, Plant and Equipment [Line Items]
Total gross	64,720	68,345
Motor Vehicles [Member]
Property, Plant and Equipment [Line Items]
Total gross	1,042,298	1,100,683
Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Total gross	$ 24,645	$ 26,025

PROPERTY, PLANT AND EQUIPMENT (Details Narrative) - USD ($)	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 33,982	$ 35,883

LONG-TERM RECEIVABLES (Details Narrative) - USD ($) $ in Millions	Sep. 30, 2022	Jan. 31, 2023	Jan. 04, 2023
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Debt Instrument face amount		$ 1.5	$ 16.7
Loan Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Debt Instrument face amount	$ 2.5
Debt instrument, description	The loan is interest free and will be expired in August 2025

SHORT-TERM BANK LOAN (Details Narrative)	3 Months Ended	12 Months Ended
SHORT-TERM BANK LOAN (Details Narrative)	Jun. 30, 2023 USD ($)	Mar. 31, 2023	Jun. 30, 2023 CNY (¥)	Mar. 31, 2022 USD ($)	Aug. 31, 2019 USD ($)	Aug. 31, 2019 CNY (¥)
Minimum [Member]
Debt Instrument [Line Items]
Line of credit facility, interest rate	4.30%
Maximum [Member]
Debt Instrument [Line Items]
Line of credit facility, interest rate	4.90%
Dongguan Agricultural Bank of China [Member] \| Facility Agreement [Member]
Debt Instrument [Line Items]
Line of credit maximum borrowing capacity					$ 153,172	¥ 1,000,000
Line of credit outstanding value	$ 130,176		¥ 944,255	$ 137,468
Dongguan Agricultural Bank of China [Member] \| Facility Agreement [Member] \| Minimum [Member]
Debt Instrument [Line Items]
Line of credit facility, interest rate		4.34%
Dongguan Agricultural Bank of China [Member] \| Facility Agreement [Member] \| Maximum [Member]
Debt Instrument [Line Items]
Line of credit facility, interest rate		4.90%

SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION (Details) - USD ($)	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Income Tax Disclosure [Abstract]
PRC statutory tax rate	25.00%	25.00%
Computed expected benefits (expense)	$ (681,864)	$ 24,491
Temporary differences	6,150	(40,566)
Permanent difference	82,125	(2,561)
Changes in valuation allowance	594,853	19,930
Income tax expense	$ 1,264	$ 1,294

TAXATION (Details Narrative)	3 Months Ended
TAXATION (Details Narrative)	Jun. 30, 2023	Jun. 30, 2022
Operating Loss Carryforwards [Line Items]
Federal statutory tax rate	25.00%	25.00%
Percentage of preferential value added tax	3.00%	3.00%
HSW, DT and YS [Member]
Operating Loss Carryforwards [Line Items]
Percentage of preferential value added tax	13.00%
Domestic Tax Authority [Member]
Operating Loss Carryforwards [Line Items]
Percentage of value added tax	13.00%
Logistic Company [Member]
Operating Loss Carryforwards [Line Items]
Percentage of value added tax	9.00%
HONG KONG
Operating Loss Carryforwards [Line Items]
Income tax rate	16.50%
Peoples Republic of China [Member]
Operating Loss Carryforwards [Line Items]
Federal statutory tax rate	25.00%
Percentage on enterprise income tax	5.00%	15.00%
Percentage of preferential tax benefits and EIT rate and term description	The preferential tax rate will be expired at end of year 2023 and the EIT rate will be 25% from year 2024.

SCHEDULE OF SEGMENT REPORTING FOR REVENUE (Details) - USD ($)	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Segment Reporting Information [Line Items]
Total of reportable segments and consolidated revenue	$ 1,052,506	$ 2,386,384
Reportable Legal Entities [Member]
Segment Reporting Information [Line Items]
Total of reportable segments and consolidated revenue	1,052,506	2,386,143
Corporate, Non-Segment [Member]
Segment Reporting Information [Line Items]
Total of reportable segments and consolidated revenue		241
Garment Manufacturing Segment [Member] \| Reportable Legal Entities [Member]
Segment Reporting Information [Line Items]
Total of reportable segments and consolidated revenue	53,873	40,426
Garment Manufacturing Segment [Member] \| Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Total of reportable segments and consolidated revenue
Logistic Services Segment [Member] \| Reportable Legal Entities [Member]
Segment Reporting Information [Line Items]
Total of reportable segments and consolidated revenue	998,633	1,390,882
Property Management And Subleasing [Member] \| Reportable Legal Entities [Member]
Segment Reporting Information [Line Items]
Total of reportable segments and consolidated revenue		$ 954,835

SCHEDULE OF SEGMENT REPORTING FOR (LOSS) INCOME FROM OPERATION (Details) - USD ($)	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Segment Reporting Information [Line Items]
Total consolidated income from operations	$ (260,949)	$ 46,102
Garment Manufacturing Segment [Member]
Segment Reporting Information [Line Items]
Total consolidated income from operations	(22,155)	(28,656)
Logistic Services Segment [Member]
Segment Reporting Information [Line Items]
Total consolidated income from operations	1,934	120,041
Property Management And Subleasing [Member]
Segment Reporting Information [Line Items]
Total consolidated income from operations		34,097
Total Of Reportable Segments [Member]
Segment Reporting Information [Line Items]
Total consolidated income from operations	(20,221)	125,482
Corporate and Other [Member]
Segment Reporting Information [Line Items]
Total consolidated income from operations	$ (240,728)	$ (79,380)

SCHEDULE OF SEGMENT REPORTING FOR ASSETS (Details) - USD ($)	Jun. 30, 2023	Mar. 31, 2023
Segment Reporting Information [Line Items]
Consolidated total assets	$ 40,591,655	$ 41,302,881
Reportable Legal Entities [Member]
Segment Reporting Information [Line Items]
Consolidated total assets	4,972,524	4,646,814
Reportable Legal Entities [Member] \| Garment Manufacturing Segment [Member]
Segment Reporting Information [Line Items]
Consolidated total assets	2,699,607	2,169,973
Reportable Legal Entities [Member] \| Logistic Services Segment [Member]
Segment Reporting Information [Line Items]
Consolidated total assets	2,272,917	2,476,841
Corporate, Non-Segment [Member]
Segment Reporting Information [Line Items]
Consolidated total assets	$ 35,619,131	$ 36,656,067

SCHEDULE OF GEOGRAPHICAL INFORMATION (Details) - USD ($)	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Mar. 31, 2023
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	$ 1,052,506	$ 2,386,384
CHINA
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	1,052,506	$ 2,386,384
Long-Lived Assets	$ 3,376,718		$ 3,511,640

SCHEDULE OF FINANCIAL INSTRUMENTS (Details) - USD ($)			3 Months Ended
SCHEDULE OF FINANCIAL INSTRUMENTS (Details) - USD ($)	Jan. 31, 2023	Jan. 04, 2023	Jun. 30, 2023	Jun. 30, 2022
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Derivative liabilities - Fair value of the Warrants		$ 3,900,000	$ 1,288,003
Derivative liabilities - Embedded conversion feature		1,200,000
Total	$ 15,000,000.0	15,000,000
Derivative [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Derivative liabilities - Fair value of the Warrants		3,858,521
Derivative liabilities - Embedded conversion feature		1,247,500
Convertible Note		9,893,979
Total		$ 15,000,000

SCHEDULE OF CONVERTIBLE NOTES OBLIGATION (Details) - USD ($)	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Investments, All Other Investments [Abstract]
Carrying value – beginning balance	$ 11,219,519
Converted to ordinary shares	(2,882,444)
Amortization of debt discount	914,196
Deferred debt discount and cost of issuance	(1,117,667)
Interest charge	376,622
Carrying value – ending balance	$ 8,510,226

SCHEDULE OF DERIVATIVE LIABILITIES (Details) - USD ($)	3 Months Ended
SCHEDULE OF DERIVATIVE LIABILITIES (Details) - USD ($)	Jun. 30, 2023	Jun. 30, 2022
Investments, All Other Investments [Abstract]
Beginning balance	$ 2,013,261
Marked to the market	805,302
Ending fair value	2,818,563
Beginning balance	277,222
Converted to ordinary shares	(113,594)
Remeasurement on change of convertible price	1,117,667
Marked to the market	482,702
Ending fair value	1,763,997
Total Derivative fair value at end of period	$ 4,582,560

FINANCIAL INSTRUMENTS (Details Narrative) - USD ($) $ / shares in Units, shares in Millions			3 Months Ended
	Jan. 31, 2023	Jan. 04, 2023	Jun. 30, 2023	Jun. 30, 2022	Mar. 31, 2023
Proceeds from issuance of convertible debt and warrants	$ 15,000,000.0	$ 15,000,000
Convertible note principal	$ 1,500,000	$ 16,700,000
Debt interest percent		5.00%	2.50%
Conversion price	$ 0.6795	$ 1.25
Warrant exercise price	$ 1.25		$ 1.25
Fair value of warrant		$ 3,900,000	$ 1,288,003
Warrants					$ 2,000,000.0
Derivative liabilities, embedded conversion feature		$ 1,200,000
Fair value of conversion feature					$ 300,000
Agent fees	$ 700,000
Warrant term	5 years
Fair value of derivative liability	$ 168,000		$ 4,582,560
Convertible note into ordinary shares	2.3
Maximum [Member]
Warrant outstanding		16.1
Warrant [Member]
Maturity date		Jul. 04, 2024

SCHEDULE OF LEASE COST (Details) - USD ($)	3 Months Ended
SCHEDULE OF LEASE COST (Details) - USD ($)	Jun. 30, 2023	Jun. 30, 2022
Lease Right-of-use Asset And Lease Liabilities
Operating lease cost	$ 43,438	$ 944,549
Short-term lease cost	23,557	20,444
Lease Cost	$ 66,995	$ 964,993

SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASES (Details) - USD ($)	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Lease Right-of-use Asset And Lease Liabilities
Operating cash flow from operating leases	$ 66,995	$ 964,993
Right-of-use assets obtained in exchange for new operating leases liabilities	$ 1,219
Weighted average remaining lease term - Operating leases (years)	2 years	1 year 6 months
Weighted average discount rate - Operating leases	4.75%	4.75%

SCHEDULE OF MATURITY OF OPERATING LEASE LIABILITY (Details)	Jun. 30, 2023 USD ($)
Lease Right-of-use Asset And Lease Liabilities
2024	$ 126,076
2025	114,096
2026	9,205
Total lease payments	249,377
Less: Interest	(17,027)
Total	$ 232,350

LEASE RIGHT-OF-USE ASSET AND LEASE LIABILITIES (Details Narrative)	Jun. 30, 2023	Jun. 30, 2022
Weighted average discount rate leases	4.75%	4.75%
Plant and Dormitory [Member]
Lease period	4 years 6 months
Building [Member]
Lease period	3 years
Head Office [Member]
Lease period	5 years

SHARE CAPITAL (Details Narrative)	3 Months Ended
SHARE CAPITAL (Details Narrative)	Jun. 30, 2023 shares
Share Capital
Stock issued during period, shares, reverse stock splits	3,739,581

SCHEDULE OF CONCENTRATION RISKS (Details) - Accounts Receivable [Member] - Customer Concentration Risk [Member]	3 Months Ended	12 Months Ended
	Jun. 30, 2023	Mar. 31, 2023
Garment Manufacturing Segment [Member] \| Customer A [Member]
Concentration Risk [Line Items]
Percentage of risk	88.40%	85.30%
Garment Manufacturing Segment [Member] \| Customer B [Member]
Concentration Risk [Line Items]
Percentage of risk	10.60%	11.40%
Logistics Services Segment [Member] \| Customer A [Member]
Concentration Risk [Line Items]
Percentage of risk	24.20%	11.40%
Logistics Services Segment [Member] \| Customer B [Member]
Concentration Risk [Line Items]
Percentage of risk	17.00%	14.10%
Logistics Services Segment [Member] \| Customer C [Member]
Concentration Risk [Line Items]
Percentage of risk	8.80%
Logistics Services Segment [Member] \| Customer D [Member]
Concentration Risk [Line Items]
Percentage of risk	7.10%	2.50%
Logistics Services Segment [Member] \| Customer E [Member]
Concentration Risk [Line Items]
Percentage of risk	6.90%	6.40%

SCHEDULE OF PURCHASES FROM SUPPLIERS (Details) - Five Largest Suppliers [Member]	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Garment Manufacturing Segment [Member]
Concentration Risk [Line Items]
Percentage of inventory purchase
Logistic Services Segment [Member]
Concentration Risk [Line Items]
Percentage of inventory purchase	100.00%	100.00%
Property Management And Subleasing [Member]
Concentration Risk [Line Items]
Percentage of inventory purchase		100.00%

RISKS AND UNCERTAINTIES (Details Narrative)	3 Months Ended
RISKS AND UNCERTAINTIES (Details Narrative)	Jun. 30, 2023 USD ($)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2022	Mar. 31, 2023
Concentration Risk [Line Items]
Translated exchange rates	7.25	7.25		6.87
Revenue and expenses translated average exchange rates	7.004	7.004	6.603
Outstanding borrowings	$ 130,176	¥ 944,255
Minimum [Member]
Concentration Risk [Line Items]
Interest rate percentage	4.30%	4.30%
Maximum [Member]
Concentration Risk [Line Items]
Interest rate percentage	4.90%	4.90%
Revenue Benchmark [Member] \| Customer Concentration Risk [Member] \| One Customer [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	10.00%	10.00%	10.00%
Revenue, percentage	40.60%	40.60%	13.10%

SUBSEQUENT EVENTS (Details Narrative) - USD ($) $ / shares in Units, $ in Millions	Jul. 13, 2023	Jul. 31, 2023	Jun. 30, 2023	Mar. 31, 2023	Jan. 31, 2023	Jan. 04, 2023
Subsequent Event [Line Items]
Principal debt					$ 1.5	$ 16.7
Stock issued upon conversion			3,739,581	35,454,670
Debt conversion price per share					$ 0.6795	$ 1.25
Subsequent Event [Member] \| Convertible Debt [Member]
Subsequent Event [Line Items]
Convertible note redemption, description	the holder redeemed the full amount of $7.5 million for the Convertible Note and irrevocably waives any past, present or future claims, rights and obligations under the Note and the Warrant.
Principal debt		$ 2.4
Stock issued upon conversion		440,000
Debt conversion price per share		$ 5.74

Addentax (NASDAQ:ATXG)
Historical Stock Chart
From Apr 2024 to May 2024

Addentax (NASDAQ:ATXG)
Historical Stock Chart
From May 2023 to May 2024

Market Data

News

Trading Tools

Markets

Discover

Hot Features

Follow Feed

Options Flow

Monitor

ATXG Addentax Group Corporation

Addentax Group Corporation News

Your Recent History

Company

Business

Popular

Get The App

Trending Now

Toplists

Market Data

News

Trading Tools

Markets

Discover

Hot Features

Follow Feed

Options Flow

Monitor

ATXG Addentax Group Corporation

Addentax Group Corporation News

Your Recent History

Company

Business

Popular

Get The App