UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form FORM 10-Q

(Mark One)

For the quarterly period ended: December 31, 2022

or

For the transition period from _____________ to _________________

Commission File No. 333-206097

ADDENTAX GROUP CORP.

(Exact name of registrant as specified in its charter)

Kingkey 100, Block A, Room 4805,

Luohu District, Shenzhen City, China518000

(Address of principal executive offices)

+ (86)755 86961 405

(Registrant’s telephone number)

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

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.

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d)As of the Exchange Act after the distribution of securities under a plan confirmed by a court.

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number ofFebruary 14, 2023, there were 35,454,670 shares outstanding of each of the issuer’s classes ofregistrant’s common stock, as of the latest practicable date. 506,920,000 common shares, par value $0.001, issued and outstanding as of November 20, 2017.stock.

TABLE OF CONTENTS

PART I -– FINANCIAL INFORMATION

Item 1. Financial Statements and Supplementary Data

ADDENTAX GROUP CORP.

FINANCIAL STATEMENTS

For the nine months ended December 31, 2022 and 2021

TABLE OF CONTENTS

Index to the interim Unaudited Condensed Consolidated Financial Statements

ADDENTAX GROUP CORP. AND SUBSIDIARIES

Condensed Consolidated Balance SheetsUNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

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

(UNAUDITED)

The accompanying

See accompany notes are an integral part of theseto the unaudited condensed consolidated financial statements.

ADDENTAX GROUP CORP. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations and Comprehensive LossUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

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

The accompanyingSee accompany notes are an integral part of theseto the unaudited condensed consolidated financial statements.

ADDENTAX GROUP CORP. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash FlowsUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

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

The accompanyingSee accompany notes are an integral part of theseto the unaudited condensed consolidated financial statementsstatements.

ADDENTAX GROUP CORP. AND SUBSIDIARIES

NotesUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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

See accompany notes to the Condensed Consolidated Financial Statementsunaudited condensed consolidated financial statements.

September 30, 2017

(Unaudited)

NOTE 1 -

ADDENTAX GROUP CORP. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND NATURE OF BUSINESS ACQUISITIONS

Addentax Group Corp. (“the Company”, “we”, “us” or “our”ATXG and its subsidiaries (the “Company”) was incorporated in Nevada on October 28, 2014, and the Company wasare engaged in the fieldbusiness of producing images on multiple surfaces using heat transfer technology.garments manufacturing, providing logistic services and property leasing and management service in the People’s Republic of China (“PRC” or “China”).

During2. BASIS OF PRESENTATION

In the reporting period,opinion of management, the Company was mainly engaged in textile and garment manufacturing and providing logistics services to its customers. The Company also provides business consultancy to their customers in assisting them to identify weaknesses in their operation in order to optimize their efficiency. The Company also assists their customers in improving their supply chain management which involves the movement and storage of raw materials, of work in progress inventory, and of finished goods from point of origin to point of consumption.

Share Exchange and Reorganization

As of the Effective Date and pursuant to a Securities Purchase Agreement dated September 25, 2017, the Company and Yingxi Industrial Chain Group Co., Ltd.(“Yingxi”), have determined that all conditions necessary to close the Share Exchange Agreement have been satisfied and therefore as of the date hereof, the Share Exchange Agreement was closed and as such Yingxi has become a wholly-owned subsidiary of the Company. As per the Share Exchange Agreement, the Company acquired 250,000,000 shares of Yingxi, representing 100% of the issued and outstanding equity of Yingxi, from the Yingxi shareholders and in exchange the Company issued to Yingxi an aggregate of 500,000,000 shares of common stock.

Recapitalization

For financial accounting purposes, this transaction was treated as a reverse acquisition by Yingxi, and resulted in a recapitalization with Yingxi being the accounting acquirer and Addentax Group Corp. as the acquired company. The consummation of this reverse acquisition resulted in a change of control. Accordingly, the historical financial statements prior to the acquisition are those of the accounting acquirer, Yingxi and have been prepared to give retroactive effect to the reverse acquisition completed on September 25, 2017, and represent the operations of Yingxi. Theunaudited condensed consolidated financial statements afterreflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the acquisition date, September 25, 2017 includeresults for the balance sheets of both companies at historical cost, the historical results of Yingxiinterim periods presented. All significant intercompany transactions and balances are eliminated in consolidation. However, the results of operations included in such financial statements may not necessary be indicative of annual results.

The Company uses the Company from the acquisition date. All sharesame accounting policies in preparing quarterly and per shareannual financial statements. Certain information and footnote disclosures normally included in the accompanyingannual 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 footnotes has been retroactively restated to reflect the recapitalization.

NOTE 2 - GOING CONCERN

The accompanying unaudited interim financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilitiesnotes thereto included in the normal course of business. For the 6 months ended September 30, 2017, the Company has suffered a loss from operations of $119,669. The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirementsCompany’s Annual Report on Form 10-K for the year ended March 31, 2018.2022 filed with the Securities and Exchange Commission (“SEC”) on June 23, 2022 (“2022 Form 10-K”).

The ability of the Company to emerge from an early stage is dependent upon, among other things, obtaining additional financing to continue operations, and development of its business plan. In response to these problems, management intends to raise additional funds through public or private placement offerings.

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying unaudited interim financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 3 - 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Regulation S-X.

In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the consolidated financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year.

Basis of Consolidation

These consolidated financial statements include the accounts of Yingxi Industrial Chain Group Co., Ltd and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation.

Principal of subsidiaries

The details of the principal subsidiaries of the Company are set out as follows:

Use of Estimates

The preparation of the consolidated financial statements is in conformity with theUS GAAP that requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. It also requires theliabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amountamounts of revenues and expenses during the reporting period. Actualperiods. 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.

Foreign Currency TranslationThere is no change on the accounting policies for the three months ended December 31, 2022.

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 Company’s reporting currencyallowance for credit losses is a valuation account that is deducted from the U.S. Dollars (“USD”). The functional currencyamortized 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 and its subsidiaries is Chinese Yuan Renminbi (“RMB”). All transactions initiated in RMB are translated into USD in accordance with ASC 830,“Foreign Currency Matters,”as follows:

Adjustments arising from such translations are included in accumulated other comprehensive income in shareholders’ equity.

Accounts Receivable

The Company’s accounts receivable consists of trade receivables from customers.on April 1, 2023. The Company maintains an allowance for doubtful accounts based on the Company’s assessment of collectability of the customer receivable. The Company analyzes past history with a customer, customer credit, collection history, and financial condition whenis currently evaluating the collectability of customer accounts. Uncollectible accounts are charged off to the allowance when it is deemed probable that the receivable will not be recovered.

For the concentration risk disclosure, please refer to Note 10.

Financial Instruments

The Company’s consolidated financial instruments consist primarily of cash, accounts receivable, prepaid expenses, inventory and other assets, accounts payable and accrued expenses and other payables. The carrying amounts of such financial instruments approximate their respective estimated fair value due to their short-term maturities.

Concentrations of Credit Risks

The Company’s exposure to concentrations of credit risk primarily related to its cash and cash equivalents. The Company places its cash and cash equivalents with financial institutions of high credit worthiness. The Company’s management assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.

Inventory

Inventory is stated at the lower of cost (weighted average) or net realizable value. The Company’s inventory is constantly monitored for obsolescence. This is based on the management’s estimates and they have taken into considerations factors such as turnover, technical obsolescence, right of return status to suppliers and price protection offered by suppliers. These estimates are necessarily subject to a degree of measurement uncertainty. Reserves for slow-moving and obsolete inventory at September 30, 2017 were $0 and at March 31, 2017were $0.

Related Parties

The Company follows ASC 850,“Related Party Disclosures,”for the identification of related parties and disclosure of related party transactions see Note 9.

Property and Equipment

Property and equipment are carried at cost less accumulated depreciation. Cost includes all direct costs necessary to acquire and prepare assets for use.

The costs of repairs and maintenance are expensed when incurred, while expenditures for refurbishments and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. When assets are retired or sold, the asset’s cost and related accumulated depreciation are eliminated with any remaining gain or loss recognized in net earnings.

Depreciation of plant and equipment, is recorded on the straight-line method over estimated useful lives, generally as follows:

Impairment of long-lived assets

We evaluate carrying value of long-lived assets whenever events or changes in circumstances would indicate that it is more likely than not their carrying values may exceed their realizable values, and records impairment charges when considered necessary.

When circumstances indicate that impairment may have occurred, the Company tests such assets for recoverability by comparing the estimated undiscounted future cash flows expected to result from the use of such assets and their eventual disposition to their carrying amount. In estimating these future cash flows, assets and liabilities are grouped at a lowest level for which there are identifiable cash flows that are largely independent of the cash flows generated by other such groups. If the undiscounted future cash flows are less than the carrying amount of the asset, an impairment loss, measured as the excess of the carrying value of the asset over its estimated fair value, is recognized. Fair values are determined based on discounted cash flows, quoted market values or external appraisals as applicable.

Revenue Recognition

The Company recognizes revenue only when all of the following criteria have been met:

Deferred Revenue

Deferred revenue are services billed to customers for which the services have not been fully performed. As of September 30, 2017 and March 31, 2017, deferred revenue were $492,553 and $290,099, respectively.

Income Taxes

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740,“Accounting for Income Taxes.” The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

Uncertain Tax Positions

The Company follows guidance issued by the FASB regarding accounting for uncertainty in income taxes. This guidance clarifies the accounting for income taxes by prescribing the minimum recognition threshold an income tax position is required to meet before being recognized in the financial statements and applies to all income tax positions. Each income tax position is assessed using a two-step process. A determination is first made as to whether it is more likely than not that the income tax position will be sustained, based upon technical merits, upon examination by the taxing authorities. If the income tax position is expected to meet the more likely than not criteria, the benefit recorded in the financial statements equals the largest amount that is greater than 50% likely to be realized upon its ultimate settlement.

The Company records income tax related interest and penalties as a component of the provision for income tax expense. As of September 30, 2017 and March 31, 2017, the Company determined there were no uncertain tax provisions.

Earnings (Loss) Per Share

The Company has adopted ASC 260,“Earnings Per Share,” (“EPS”) which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures, and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying consolidated statements of operations and comprehensive loss, basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.

The Company had no potentially dilutive securities, such as convertible debt, options or warrants, issued and outstanding during the six months ended September 30, 2017 and 2016.

Recent Accounting Pronouncements

The Company has reviewed all other recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on our consolidated financial statements.

In September 2017, the FASB has issued Accounting Standards Update (ASU) No. 2017-13,“Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments.”The amendments in ASU No. 2017-13 amends the early adoption date option for certain companies related to the adoption of this ASU No. 2014-09 and ASU No. 2016-02. Both of the below entities may still adopt using the public company adoption guidance in the related ASUs, as amended. will have on its consolidated financial statements.

The effective date is the same as the effective date and transition requirements for the amendments for ASU 2014-09 and ASU 2016-02.

In May 2014, the FASB issued anCompany reviews new accounting standards update and introduced a 5-step approach which modifies the requirements for identifying, allocating, and recognizing revenue related to the achievement of performance conditions under contracts with customers. This update also requires additional disclosure related to the nature, amount, timing, and uncertainty of revenueas issued. Management has not identified any other new standards that is recognized under contracts with customers. This guidance is effective for fiscal and interim periods beginning after December 15, 2017 and is required to be applied retrospectively to all revenue arrangements. The adoption of this guidance is not expected toit believes will have a significant impact on the Company’s consolidated financial statements.

In December 2016, the FASB has issued Accounting Standards Update (ASU) No. 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers.” The amendments affect narrow aspects of the guidance issued in ASU 2014-09 including Loan Guarantee Fees, Contract Costs, Provisions for Losses on Construction-Type and Production-Type Contracts, Disclosure of Remaining Performance Obligations, Disclosure of Prior Period Performance Obligations, Contract Modifications, Contract Asset vs. Receivable, Refund Liability, Advertising Costs, Fixed Odds Wagering Contracts in the Casino Industry, and Costs Capitalized for Advisors to Private Funds and Public Funds. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements for FASB Accounting Standards Codification Topic 606. Public entities should apply Topic 606 (and related amendments) for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein.

NOTE 4 – INVENTORY4. RELATED PARTY TRANSACTIONS

SCHEDULE OF RELATED PARTIES RELATIONSHIP WITH THE COMPANY

Inventory at September 30, 2017The Company leases Shenzhen XKJ office rent-free from Bihua Yang.

The Company had the following related party balances as of December 31, 2022 and March 31, 2017consist2022:

SCHEDULE OF RELATED PARTY TRANSACTION

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

5. DEBT SECURITIES HELD-TO-MATURITY

SCHEDULE OF DEBT SECURITIES HELD TO MATURITY

The Company purchased a note issued by a third-party investment company on August 24, 2022. The principal amount of the following:note is $17,500,000. The note was renewable with one-year tenor and 2.5% p.a. coupon.

NOTE 5 – NOTES RECEIVABLE6. INVENTORIES

Note receivable at September 30, 2017Inventories consist of the following as of December 31, 2022 and March 31, 2017amounted to $1,613,812 and $1,057,437, respectively.2022:

SCHEDULE OF INVENTORIES

The amounts are interest free, unsecured and have no fixed terms of repayment. As at September 30, 2017 and March 31, 2017, there were no interest due and outstanding and no provision had been made for non-repayment of the loan or interest.

Notes receivables consisted mainly of interest-free loan due from unrelated third parties, social insurance and housing provident fund, and input Value Added Tax to be credited.

NOTE 6 – PROPERTY AND EQUIPMENT

Property and equipment at September 30, 2017 and March 31, 2017, consist of the following:

Depreciation expense for the six months ended September 30, 2017 and 2016 amounted to $56,797 and $49,719, respectively.

NOTE 7 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities at September 30, 2017 and March 31, 2017, consist of the following:

7. ADVANCES TO SUPPLIERS

NOTE 8 – LOAN PAYABLE

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 componentsCompany reviews a supplier’s credit history and background information before advancing a payment. If the financial condition of our short-termits 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 associated interest rates, were as followsfollowing as of September 30, 2017December 31, 2022 and March 31, 2017:2022:

SCHEDULE OF PREPAYMENTS AND OTHER RECEIVABLES

During9. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of the six months ended September 30, 2017 and 2016, the Company borrowed $4,275,000 and $0, and repaid $1,680,000 and $0, respectively.

NOTE 9 – RELATED PARTY TRANSACTIONS

Due from related parties

Due from related parties at September 30, 2017following as of December 31, 2022 and March 31, 2017consist of as follows:2022:

SCHEDULE OF PROPERTY PLANT AND EQUIPMENT

The amounts were interest free, unsecuredDepreciation expense for the three and had no fixed terms of repayment.nine months ended December 31, 2022 and 2021 was $33,817 and $44,164, $102,649 and $115,561, respectively.

Due to related parties

Due to related parties at September 30, 2017 and March 31, 2017consist of as follows:

The amounts were interest free, unsecured and had no fixed terms of repayment.

NOTE 10 – CONCENTRATION OF CREDIT RISKS10. 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 December 31, 2022, the Company has borrowed $138,265 (RMB955,281) (March 31, 2022: $151,090) under this line of credit with various annual interest rates from 4.84% to 4.9%. The outstanding loan balance was due on December 31, 2021. The Company had certain customers whose revenue individually represented 10% or more ofwas not able to renew the Company’s total revenue, or whose accounts receivable balances individually represented 10% or more ofloan facility with the Company’s total accounts receivable, or whose accounts payable balances individually represented 10% or more of the Company’s total accounts payable, the details of which are set out as follows:

For the six months ended September 30, 2017 and the year ended March 31, 2017, 5 customers accounted for 53% and 5 customer accounted for 55% of the revenue of the Company, respectively.

At September 30, 2017 and March 31, 2017, 2 customers accounted for 58% and 3 customers accounted for 55% of the accounts receivable of the Company, respectively.

NOTE 11 – INCOME TAX

bank. The Company is subject to U.S. Income taxes. Fornegotiating with the 6 months ended September 30, 2017bank on repayment schedule of the loan balance and interest payable.

11. INCOME TAXES

The Company operates in the year ended March 31, 2017,PRC and files tax returns in the Company does not have to pay any U.S. income tax.PRC jurisdictions.

The Company’s subsidiary, Yingxi Industrial Chain Group Co., Ltd was incorporated on August 4, 2016 in the Republic of Seychelles. Yingxi’sSeychelles and, under the current laws of the British Virgin Islands, and is not subject to income taxes. It’s wholly owned subsidiary YICIof Addentax Group Corp.

Yingxi HK (Yingxi Industrial Chain Investment Co., Ltd.) was incorporated on July 28, 2016 in Hong Kong China. YICI’s subsidiaries DHSW, QYTG, SCDT, SHPF, SQYIwhich is indirectly wholly owned by Addentax Group Corp., and SXKJ were incorporated on May 15, 2009, November 29, 2016, May 13, 1982, July 6, 2006, January 29, 2016, and September 28, 2001 respectively in China.

The Company has subsidiaries operate in China and they file theiris subject to Hong Kong income tax returns in accordance with China’s laws and regulations.

Provisionat a progressive rate of 16.5%. No provision for income taxes in ChinaHong Kong have been made as Yingxi HK had no taxable income for the sixthree and nine months ended September 30, 2017December 31, 2022 and 2021.

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 have been made as YX had no taxable income for the three and nine months ended December 31, 2022 and 2021.

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 2022 and 2021. The preferential tax rate will be expired at end of year 2022 and the EIT rate will be 25% from year ended March 31, 2017 were $6,1282023.

The Company’s parent entity, Addentax Group Corp. is a U.S entity and $15,326 respectively. Theis subject to the United States federal income tax ratetax. No provision for income taxes in the United States have been made as Addentax Group Corp. had no United States taxable income for the years 2017three and 2016 are 25% in China. However, DHSW and SHPF enjoyed a preferential income tax rate at 10% for the year 2016. Whereas SHPF enjoyed a preferential income tax rate at 10% for the year 2016.

The Company’s subsidiaries do not generate any income in Hong Kong or Seychelles for the 6nine months ended September 30, 2017December 31, 2022 and the years ended March 31, 2017 and hence does not have to pay any Hong Kong Profits tax or Seychelles income tax.2021.

NOTE 12 – SHAREHOLDERS’ EQUITY

Common Stock

The Company has 1,000,000,000, $0.001 par value shares of common stock authorized.

On September 25, 2017, pursuant to the Share Exchange Agreement (See Note 1), the Company issued 500,000,000 shares of common stock to the stockholders of Yingxi in exchange for 250,000,000 shares of Yingxi’s common stock, representing 100% of its issued and outstanding common stock. As a result of the reverse acquisition accounting, these shares issued to the former Yingxi stockholders are treated as being outstanding from the date of issuance of the Insight shares.

There were 506,920,000 shares of common stock outstanding as of September 30, 2017.

The Company has no stock option plan, warrants or other dilutive securities.

NOTE 13 –SUBSEQUENT EVENTS

The Company has analyzed its operations subsequent to September 30, 2017, through the date these financials were approved to be issued, and has determined that it does not have any material events.

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

SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION

FORWARD-LOOKING STATEMENTSIn 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, OTX, 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 2022 and 2021. 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.

12. 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 three segments:

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

The Company used to have an operating segment named “Epidemic prevention supplies”, which included manufacturing, distribution and trading of epidemic prevention supplies. As the COVID-19 pandemic is getting better, the Company ceased to operate in the Epidemic prevention supplies business at the beginning of the quarter. The remaining assets of the segment was reclassified into the “Corporate and others” segment. The corresponding items of segment information for the earlier periods was restated to reflect the change of the new segment structure.

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

Revenues by segment for the three and nine months ended December 31, 2022 and 2021 are as follows:

SCHEDULE OF SEGMENT REPORTING FOR REVENUE

Income (loss) from operations by segment for the three and nine months ended December 31, 2022 and 2021 are as follows:

SCHEDULE OF SEGMENT REPORTING FOR INCOME FROM OPERATION

Total assets by segment as of December 31, 2022 and March 31, 2022 are as follows:

SCHEDULE OF SEGMENT REPORTING FOR ASSETS

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.

SCHEDULE OF GEOGRAPHICAL INFORMATION

Geographic Information

13. 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 December 31, 2022, 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

The following table summarizes supplemental information related to leases:

SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASES