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.

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).

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

As of ~~2022,~~November 14, 2023, there were ~~31,093,004~~4,294,979 shares outstanding of the registrant’s common stock.

For the three and six months ended September 30, ~~2022~~2023 and ~~2021~~2022


	September 30, 2022			March 31, 2022			September 30, 2023 (unaudited)			March 31, 2023 (audited)

ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	2,034,410		$	1,390,644		$	1,744,275		$	562,711
Restricted cash								3,250,000			-
Accounts receivables, net		1,895,213			2,164,970			2,061,039			1,858,889
Debt securities held-to-maturity		17,500,000			-			-			17,718,750
Inventories		247,335			266,596			250,373			285,528
Prepayments and other receivables		4,561,827			575,210			19,239,836			959,196
Advances to suppliers		1,158,364			1,181,466			2,097,539			1,281,075
Amount due from related party		36,122			110,242			1,561,079			375,092
Total current assets		27,433,271			5,689,128			30,204,141			23,041,241

NON-CURRENT ASSETS
Plant and equipment, net		684,949			836,419			620,584			649,120
Long-term prepayments		122,138			31,496			254,406			90,032
Restricted cash								-			14,750,000
Long-term receivables								2,500,000			2,500,000
Operating lease right of use asset		4,221,393			6,530,017			19,715,168			272,488
Total non-current assets		5,028,480			7,397,932			23,090,158			18,261,640
TOTAL ASSETS	$	32,461,751		$	13,087,060		$	53,294,299		$	41,302,881

LIABILITIES AND EQUITY

CURRENT LIABILITIES
Short-term loan	$	134,245		$	151,090		$	129,785		$	137,468
Accounts payable		114,598			1,334,483			320,622			267,501
Amount due to related parties		2,469,127			3,694,989			2,138,917			2,384,633
Advances from customers		2,538			2,375			74,176			2,152
Accrued expenses and other payables		2,486,643			1,445,473			1,194,694			606,843
Operating lease liability current portion		3,343,271			3,763,931			1,053,180			127,101
Total current liabilities		8,550,422			10,392,341			4,911,374			3,525,698

NON-CURRENT LIABILITIES
Convertible debts								2,583,324			11,219,519
Derivative liabilities								292,984			2,290,483
Operating lease liability		878,123			2,766,086			18,661,988			145,387
Total non-current liabilities								21,538,296			13,655,389
TOTAL LIABILITIES	$	9,428,545		$	13,158,427		$	26,449,670		$	17,181,087

EQUITY (deficit)
Common stock ($0.001 par value, 50,000,000 shares authorized, 31,693,004 shares and 26,693,004 shares issued and outstanding at September 30 and March 31, 2022, respectively)	$	31,693		$	26,693
EQUITY
Common stock ($0.001 par value, 250,000,000 shares authorized, 4,494,979and 35,454,670 shares issued and outstanding at September 30 and March 31, 2023, respectively)							$	4,495		$	35,455
Additional paid-in capital		29,532,326			6,815,333			33,558,928			29,528,564
Accumulated Deficit		(6,576,342	)		(6,756,230	)		(6,817,530	)		(5,451,209	)
Statutory reserve		13,821			13,821			28,457			28,457
Accumulated other comprehensive loss		31,708			(170,984	)		70,279			(19,473	)
Total equity (deficit)		23,033,206			(71,367	)
Total equity								26,844,629			24,121,794	)
TOTAL LIABILITIES AND EQUITY	$	32,461,751		$	13,087,060		$	53,294,299		$	41,302,881

See ~~accompany~~accompanying notes to the unaudited condensed consolidated financial statements.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

													2023			2022			2023			2022
	Three months ended September 30,						Six months ended September 30,						Three months ended September 30,						Six months ended September 30,
	2022			2021			2022			2021			2023			2022			2023			2022

REVENUES	$	2,144,019		$	2,757,832		$	4,530,403		$	7,044,263		$	1,335,314		$	2,144,019		$	2,387,820		$	4,530,403

COST OF REVENUES		(1,578,858	)		(2,287,407	)		(3,508,558	)		(5,990,433	)		(932,427	)		(1,578,858	)		(1,748,024	)		(3,508,558	)

GROSS PROFIT		565,161			470,425			1,021,845			1,053,830			402,887			565,161			639,796			1,021,845

OPERATING EXPENSES
Selling and marketing		(30,002	)		(45,802	)		(35,644	)		(92,192	)		(37,212	)		(30,002	)		(37,212	)		(35,644	)
General and administrative		(465,007	)		(462,886	)		(869,947	)		(923,201	)		(670,607	)		(465,007	)		(1,168,465	)		(869,947	)
Total operating expenses		(495,009	)		(508,688	)		(905,591	)		(1,015,393	)		(707,819	)		(495,009	)		(1,205,677	)		(905,591	)

INCOME (LOSS) FROM OPERATIONS		70,152			(38,263	)		116,254			38,437			(304,932	)		70,152			(565,881	)		116,254

Fair value gain or loss														2,854,595			-			1,566,592			-
Interest income		1,762			96			5,000			2,063			1,693			1,762			3,417			5,000
Interest expenses		(2,209	)		(617	)		(4,667	)		(2,849	)		(603,819	)		(2,209	)		(1,896,534	)		(4,667	)
Other income, net		22,973			75,764			74,056			89,001			(581,900	)		22,973			(469,414	)		74,056

INCOME BEFORE INCOME TAX EXPENSE		92,678			36,980			190,643			126,652			1,365,637			92,678			(1,361,820	)		190,643
INCOME TAX EXPENSE		(9,461	)		(4,959	)		(10,755	)		(15,684	)		(3,237	)		(9,461	)		(4,501	)		(10,755	)

NET INCOME		83,217			32,021			179,888			110,968			1,362,400			83,217			(1,366,321	)		179,888
Foreign currency translation gain (loss)		97,543			(3,626	)		202,692			(34,142	)
TOTAL COMPREHENSIVE INCOME	$	180,760		$	28,395		$	382,580		$	76,826
Foreign currency translation gain														2,302			97,543			89,752			202,692
TOTAL COMPREHENSIVE INCOME (LOSS)													$	1,364,702		$	180,760		$	(1,276,569	)	$	382,580

EARNINGS PER SHARE
Basic and diluted		0.00			0.00			0.01			0.00			0.37			0.00			(0.37	)		0.00
Weighted average number of shares outstanding – Basic and diluted		27,117,662			26,405,333			27,117,662			26,405,333			3,656,442			26,693,004			3,656,442			26,693,004

See ~~accompany~~accompanying notes to the unaudited condensed consolidated financial statements.

																		Shares			Amount			paid-in capital			Unrestricted			Statutory reserve		comprehensive loss			Total Equity
	Common Stock				Additional		Retained earnings (accumulated deficit)					Accumulated other						Common Stock						Additional			Retained earnings (accumulated deficit)					Accumulated other
		Shares		Amount		paid-in capital		Unrestricted			Statutory reserve		comprehensive loss			Total Equity		Shares			Amount			paid-in capital			Unrestricted			Statutory reserve		comprehensive loss			Total Equity
BALANCE AT JUNE 30, 2021		26,693,004	$	26,093	$	6,815,333	$	(6,755,281	)	$	13,821	$	(133,633	)	$	(33,067	)
Foreign currency translation		-		-		-		-			-		(3,626	)		(3,626	)
Net income for the period		-		-		-		32,021			-		-			32,021
BALANCE AT SEPTEMBER 30, 2021		26,693,004	$	26,693	$	6,815,333	$	(6,723,260	)	$	13,821	$	(137,259	)	$	(4,672	)

BALANCE AT JUNE 30, 2022		26,693,004	$	26,693	$	6,815,333	$	(6,659,559	)	$	13,821	$	(65,835	)	$	130,453
Paid in capital		5,000,000		5,000		22,716,993		-			-		-			22,721,993
BALANCE AT JULY 1, 2022																			26,693,004		$	26,693		$	6,815,333		$	(6,659,559	)	$	13,821	$	(65,835	)	$	(71,367	)
Issuance of new shares																			5,000,000			5,000			22,716,993			-			-		-			22,721,993
Foreign currency translation		-		-		-		-			-		97,543			97,543			-			-			-			-			-		97,543			97,543
Net income for the period		-		-		-		83,217			-		-			83,217			-			-			-			83,217			-		-			83,217
BALANCE AT SEPTEMBER 30, 2022		31,693,004	$	31,693	$	29,532,326	$	(6,576,342	)	$	13,821	$	31,708		$	23,033,206			31,693,004		$	31,693		$	29,532,326		$	(6,576,342	)	$	13,821	$	31,708		$	23,033,206

BALANCE AT MARCH 31, 2021		26,693,004	$	26,093	$	6,815,333	$	(6,834,228	)	$	13,821	$	(103,117	)	$	(81,498	)
BALANCE AT JULY 1, 2023																			3,739,581		$	3,740		$	32,406,317		$	(8,179,930	)	$	28,457	$	67,977		$	24,326,561
Issuance of new shares																			755,398			755			(755	)		-			-		-			-
Additional paid-in capital from conversion of convertible debts																			-			-			1,153,366			-			-		-			1,153,366
Foreign currency translation		-		-		-		-			-		(34,142	)		(34,142	)		-			-			-			-			-		2,302			2,302
Net income for the period		-		-		-		110,968			-		-			110,968			-			-			-			1,362,400			-		-			1,362,400
BALANCE AT SEPTEMBER 30, 2021		26,693,004	$	26,693	$	6,815,333	$	(6,723,260	)	$	13,821	$	(137,259	)	$	(4,672	)
BALANCE AT SEPTEMBER 30, 2023																			4,494,979		$	4,495		$	33,558,928		$	(6,817,530	)	$	28,457	$	70,279		$	26,844,629

BALANCE AT MARCH 31, 2022		26,693,004	$	26,693	$	6,815,333	$	(6,756,230	)	$	13,821	$	(170,984	)	$	(71,367	)
Paid in capital		5,000,000		5,000		22,716,993		-			-		-			22,721,993
BALANCE AT APRIL 1, 2022																			26,693,004		$	26,693		$	6,815,333		$	(6,756,230	)	$	13,821	$	(170,984	)	$	(71,367	)
Issuance of new shares																			5,000,000			5,000			22,716,993			-			-		-			22,721,993
Foreign currency translation		-		-		-		-			-		202,692			202,692																	202,692			202,692
Net income for the period		-		-		-		179,888			-		-			179,888												179,888								179,888
BALANCE AT SEPTEMBER 30, 2022		31,693,004	$	31,693	$	29,532,326	$	(6,576,342	)	$	13,821	$	31,708		$	23,033,206			31,693,004		$	31,693		$	29,532,326		$	(6,576,342	)	$	13,821	$	31,708		$	23,033,206

BALANCE AT APRIL 1, 2023																			35,454,670		$	35,455		$	29,528,564		$	(5,451,209	)	$	28,457	$	(19,473	)	$	24,121,794
Issuance of new shares before reversed split																			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			-			-		-			-
Issuance of new shares after reversed split																			755,398			755			(755	)		-			-		-			-
Additional paid-in capital from conversion of convertible debts																			-			-			3,999,404			-			-		-			3,999,404
Foreign currency translation																			-			-			-			-			-		89,752			89,752
Net income for the period																			-			-			-			(1,366,321	)		-		-			(1,366,321	)
BALANCE AT SEPTEMBER 30, 2023																			4,494,979		$	4,495		$	33,558,928		$	(6,817,530	)	$	28,457	$	70,279		$	26,844,629

See ~~accompany~~accompanying notes to the unaudited condensed consolidated financial statements.

							2023			2022
	Six Months Ended September 30						Six Months Ended September 30
		2022			2021		2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	179,888		$	110,968
Adjustments to reconcile net income to net cash used in operating activities:
Net (loss) income							$	(1,366,321	)	$	179,888
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		171,493			71,398			146,106			171,493
Amotization of convertible debt								1,884,984			-
Investment income								(218,750	)		-
Fair value gain or loss								(1,566,592	)		-
Loss on debts extinguishment								697,318			-
Gain on bargain purchase								(975	)		-
Changes in operating assets and liabilities
Accounts receivable		269,757			3,216,556			(202,150	)		269,757
Inventories		19,261			(30,372	)		35,155			19,261
Advances to suppliers		23,102			(1,114,244	)		(816,464	)		23,102
Other receivables		(1,561,056	)		(399,257	)		(76,100	)		(1,561,056	)
Accounts payables		(1,347,677	)		(1,801,257	)		(12,460	)		(1,347,677	)
Accrued expenses and other payables		718,539			44,382			(65,645	)		718,539
Advances from customers		163			52,308			(17,592	)		163
Net cash provided by (used in) operating activities	$	(1,526,530	)	$	150,482
Net cash (used in) provided by operating activities							$	(1,579,486	)	$	(1,526,530	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of plant and equipment and other assets		-			(142,922	)
Purchase of property and equipment								(5,274	)		-
Purchase of debt securities		(17,500,000	)		-			-			(17,500,000	)
Net cash used in investing activities	$	(17,500,000	)	$	(142,922	)	$	(5,274	)	$	(17,500,000	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issue of ordinary shares		20,221,993			-			-			20,221,993
Proceeds from related party borrowings		2,231,376			1,623,725			1,960,902			2,231,376
Repayment of related party borrowings		(2,803,515	)		(2,762,272	)		(3,112,467	)		(2,803,515	)
Release of restricted cash								3,850,000			-
Repayment of bank borrowings		(416	)		-			-			(416	)
Net cash provided by financing activities	$	19,649,438		$	(1,138,547	)	$	2,698,435		$	19,649,438

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		622,908			(1,130,987	)
NET INCREASE IN CASH AND CASH EQUIVALENTS								1,113,675			622,908
Effect of exchange rate changes on cash and cash equivalents		20,858			(3,421	)		67,889			20,858
Cash and cash equivalents, beginning of the period		1,390,644			1,845,077			562,711			1,390,644
CASH AND CASH EQUIVALENTS, END OF THE PERIOD	$	2,034,410		$	710,669		$	1,744,275		$	2,034,410

Supplemental disclosure of cash flow information:
Cash paid during the year for interest	$	-		$	1,935
Cash paid during the year for income tax	$	10,755		$	15,684
Cash paid during the period for interest							$	-		$	-
Cash paid during the period for income tax							$	4,501		$	10,755
Supplemental disclosure of non-cash investing and financing activities:
Right-of-use assets obtained in exchange for operating lease obligations	$	-		$	345,847		$	19,512,400		$	-

See ~~accompany~~accompanying notes to the unaudited condensed consolidated financial statements.

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”) ~~and epidemic prevention supplies manufacturing and distribution both in China and overseas markets.~~.

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 ~~necessary~~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, ~~2022~~2023 filed with the Securities and Exchange Commission (“SEC”) on June ~~23, 2022~~29, 2023 (“~~2022~~2023 Form 10-K”).

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.

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

Account receivables are classified as financial assets subsequently measured at amortized cost. Account receivables are recognized when the Company becomes a party to the contractual provisions of the receivables. They are measured, at initial recognition, at fair value plus transaction costs, if any and are subsequently measured at amortized cost. The amortized cost is the amount recognized on the receivable initially, minus principal repayments, plus cumulative amortization (interest) using the effective interest method of any difference between the initial amount and the maturity amount, adjusted for any loss allowance.

A loss allowance for expected credit losses is recognized on account receivables and is updated at each reporting date. The Company determines the expected credit losses provisions based on ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (‘‘ASC 326’’) using a modified retrospective approach which did not have a material impact on the opening balance of accumulated deficit. To determine expected credit losses on account receivables, the Company will consider the historic credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions, and an assessment of both the current and forecasted direction of conditions at the reporting date, including the time value of money, where appropriate.

The loss allowance is calculated on a collective basis for all trade and other receivables in totality. An impairment gain or loss is recognized in profit or loss with a corresponding adjustment to the carrying amount of account receivables, through use of a loss allowance account. The impairment loss is included in operating expenses as a movement in credit loss allowance.

Receivables are written off when there is information indicating that the counterparty is in severe financial difficulty and there is no realistic prospect of recovery, e.g., when the counterparty has been placed under liquidation or has entered into bankruptcy proceedings. Receivables written off may still be subject to enforcement activities under the Company’s recovery procedures, considering legal advice where appropriate. Any recoveries made are recognized in profit or loss.

There is no change onin the accounting policies for the three months ended September 30, ~~2022.~~2023.

Accounting for Convertible Instruments: In ~~June 2016, the~~August 2020, FASB issued ASU ~~No. 2016-13, Financial~~2020-06, Accounting for Convertible Instruments ~~– Credit Losses (Topic 326)~~and Contracts in an Entity’s Own Equity (ASU 2020-06), ~~Measurement~~as part of ~~Credit Losses on Financial Instruments. This standard requires a financial asset (or group~~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 ~~assets) measured at amortized cost basis~~statements. Among other changes, the new guidance removes from GAAP separation models for convertible debt that require the convertible debt to be ~~presented~~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 ~~net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis~~beginning 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.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.

In September 2023, the Company acquired a 100% equity interest of Dongguan Hongxiang Commercial Co., Ltd (HX), an entity engaged in property management and subleasing services in Dongguan, Guangdong Province, for cash consideration of $438,470 (RMB3.2 million). The Company recognized gain on bargain purchase of $996. The acquisition has been accounted under the acquisition method of accounting in accordance with ASC 805, “Business Combinations”. The results of HX’s operations have been included in the consolidated financial statements since its acquisition date.

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

Pro forma results of operation for this acquisition have not been presented because the effects of the acquisition were not material to the Company’s consolidated financial results.

~~SCHEDULE~~SUMMARY OF ~~RELATED PARTIES RELATIONSHIP WITH THE COMPANY~~FINANCIAL POSITION OF ENTITIES AND GAIN OR LOSS ON DISPOSAL

The Company had the following related party balances as of September 30, ~~2022~~2023 and March 31, ~~2022:~~2023:

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

The Company purchased a note issued by a third-party investment company inon August 24, 2022. The principal amount of the note is $17,500,000. The note ~~was~~is renewable with one-year tenor on August 23, 2023 and 2.5% p.a. coupon. As of September 30, and March 31, 2023, the coupon receivable was $437,500 and $218,750, respectively. The note was matured on August 23, 2023 and was reclassified to Other receivables (Note 9). The Company is discussing with the issuer and will determine whether to renew the note.

Inventories consist of the following as of September 30, ~~2022~~2023 and March 31, ~~2022:~~2023:

		September 30, 2022		March 31, 2022	September 30, 2023		March 31, 2023
Raw materials	$	9,048	$	184,498	$	17,497	$	19,484
Work in progress		125,568		1,327		1,733		9,373
Finished goods		112,719		80,771		213,143		256,671
Total inventories	$	247,335	$	266,596	$	250,373	$	285,528

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.

Prepayments and other receivables consist of the following as of September 30, ~~2022~~2023 and March 31, ~~2022:~~2023:

		September 30, 2022		March 31, 2022	September 30, 2023		March 31, 2023
Prepayment		18,179		14,046		43,006		10,913
Deposit		1,233,591		64,653		732,519		40,341
Receivable of consideration on disposal of subsidiaries		233,162		269,798		226,585		708,457
Receivable of matured debt security (Note)						17,937,500		-
Other receivables		3,076,895		226,713		300,226		199,485
Total prepayments and other receivables	$	4,561,827	$	575,210
Total Prepayment					$	19,239,836	$	959,196

Note: The debt security held-to-maturity was matured and was reclassified to Other receivables. The Company is discussing with the issuer and will determine whether to renew the note. (Note 6)

Property, plant and equipment consists of the following as of September 30, ~~2022~~2023 and March 31, ~~2022:~~2023:


		September 30, 2022			March 31, 2022		September 30, 2023			March 31, 2023
Production plant	$	65,972		$	74,034		$	104,935		$	68,345
Motor vehicles		1,062,472			1,192,296			1,039,166			1,100,683
Office equipment		25,122			28,191			51,281			26,025
Plant and equipment, gross		1,153,566			1,294,521
Total gross								1,195,382			1,195,053
Less: accumulated depreciation		(468,617	)		(458,102	)		(574,798	)		(545,933	)
Plant and equipment, net	$	684,949		$	836,419		$	620,584		$	649,120

Depreciation expense for the three and six months ended September 30, ~~2022~~2023 and ~~2021~~2022 was $~~32,948~~23,019 and $~~42,008~~32,948, $~~68,832~~57,002 and $~~71,397~~68,832, respectively.

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 expire in August 2025.

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 September 30, ~~2022,~~2023, the Company has borrowed $~~134,245~~129,785 ~~(RMB~~(RMB~~955,281~~944,255) (March 31, ~~2022:~~2023: $~~151,090~~137,468) under this line of credit with various annual interest rates from ~~4.84%~~4.34% to ~~4.9%~~4.9%. The outstanding loan balance was due on September 30, ~~2021~~.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.

Yingxi Industrial Chain Group Co., Ltd was incorporated in the Republic of Seychelles and, under the current laws of the British Virgin Islands, ~~and~~ 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 ~~have~~has been made as Yingxi HK had no taxable income for the three ~~and six~~ months ended September 30, ~~2022~~2023 and ~~2021.~~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 ~~have~~has been made as YX had no taxable income for the three ~~and six~~ months ended ~~Septermber~~September 30, ~~2022~~2023 and ~~2021.~~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%5% to ~~15%~~15% in ~~2022~~2023 and ~~2021.~~2022. The preferential tax rate will be expired at end of year ~~2022~~2023 and the EIT rate will be 25% from year ~~2023.~~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 ~~have~~has been made as Addentax Group Corp. had no United States taxable income for the three ~~and six~~ months ended September 30, ~~2022~~2023 and ~~2021.~~2022.

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			2023			2022
	Three months ended						Six months ended					Three months ended						Six months ended
	September 30,						September 30,					September 30,						September 30,
		2022			2021			2022		2021		2023			2022			2023			2022
PRC statutory tax rate		25	%		25	%		25	%	25	%		25	%		25	%		25	%		25	%
Computed expected benefits		23,170			9,245			47,661		31,663			341,409			23,170			(340,456	)		47,661
Temporary differences		(53,206	)		(17,388	)		(93,771	)	(56,847	)		(30,918	)		(53,206	)		(24,768	)		(93,771	)
Permanent difference		5,587			(1,230	)		3,026		248			(75,814	)		5,587			6,312			3,026
Changes in valuation allowance		33,910			14,332			53,839		40,620			(231,440	)		33,910			363,413			53,839
Income tax expense	$	9,461		$	4,959			10,755		15,684		$	3,237		$	9,461			4,501			10,755

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.

In accordance with the relevant taxation laws in the PRC, the normal VAT rate for domestic sales is ~~13%~~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%~~13%. The ~~Companies~~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%9% under the relevant tax category for logistic company, except the branch of YXPF enjoyed the preferential VAT rate of 3%3% in ~~2022~~2023 and ~~2021.~~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.

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:

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 ~~and six~~ months ended September ~~2022~~30, 2023 and ~~2021~~2022 are as follows:

		1		2		3		4
Revenues from external customers									2023		2022		2023		2022
	Three months ended				Six months ended				Three months ended				Six months ended
	September 31,				September 31,				September 30,				September 30,
Revenues from external customers		2022		2021		2022		2021	2023		2022		2023		2022
Garments manufacturing segment		861		393,391		41,287		2,462,532		91,218		861		145,091		41,287
Logistics services segment		1,221,658		1,317,360		2,612,540		2,425,402		1,186,033		1,221,658		2,184,666		2,612,540
Property management and subleasing		920,201		1,047,081		1,875,036		2,156,329		58,063		920,201		58,063		1,875,036
Epidemic prevention supplies segment		1,299		-		1,540		-		-		1,299		-		1,540
Total of reportable segments and consolidated revenue	$	2,144,019	$	2,757,832	$	4,530,403	$	7,044,263	$	1,335,314	$	2,144,019	$	2,387,820	$	4,530,403

Intersegment revenue
Garments manufacturing segment		-		-		-		2,415		-		-		-		-

(Loss) Income ~~(loss)~~ from operations by segment for the three ~~and six months~~ ended September 30, ~~2022~~2023 and ~~2021 are as follows:~~

~~Total assets by segment as at September 30, 2022 and March 31,~~ 2022 are as follows:

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

		1		2
Total assets		September 30, 2022		March 31, 2022	September 30, 2023		March 31, 2023
Garment manufacturing segment	$	1,611,781	$	1,784,020	$	2,699,573	$	2,169,973
Logistics services segment		2,662,834		2,610,469		2,581,661		2,476,841
Property management and subleasing		6,277,133		7,608,997		20,670,159		-
Epidemic prevention supplies		43,345		64,885
Total of reportable segments		10,595,093		12,068,371		25,951,393		4,646,814
Corporate and other		21,866,658		1,018,689		27,342,906		36,656,067
Consolidated total assets	$	32,461,751	$	13,087,060	$	53,294,299	$	41,302,881

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.

	Three months ended September 30,			Six months ended September 30,			Three months ended September 30,				Six months ended September 30,
		2022	2021		2022	2021	2023		2022		2023		2022
Revenues
China		2,144,019	2,757,832		4,530,403	7,044,263		1,335,314		2,144,019		2,387,820		4,530,403
Total		2,144,019	2,757,832		4,530,403	7,044,263		1,335,314		2,144,019		2,387,820		4,530,403

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:

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 September 30, 2023, the fair value of the Warrant was $268,435 (March 31, 2023: 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.

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:

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 movement of the Company’s convertible notes obligations were as the following for the three months ended September 30, 2023 and 2022:

During the period, approximately $3.0 million of the convertible notes was converted into approximately 0.77 million ordinary shares, with average effective conversion price of $3.9287 per share.

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 Convertible Note.

The Company’s derivative liabilities were as the following for the three months ended September 30, 2023 and 2022:

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 September 30, ~~2022,~~2023, with discounted rate of ~~4.75%~~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 316 years with an option to extend the lease.

		1		2		3		4	2023		2022		2023		2022
	Three months ended September 30,				Six months ended September 30,				Three months ended September 30,				Six months ended September 30,
		2022		2021		2022		2021	2023		2022		2023		2022
Operating lease cost		876,509		975,894		1,821,058		1,910,560		31,363		876,509		74,801		1,821,058
Short-term lease cost		18,971		41,883		39,416		62,785		34,493		18,971		58,050		39,416
Total	$	895,480	$	1,017,777	$	1,860,474	$	1,973,345
Lease Cost									$	65,856	$	895,480	$	132,851	$	1,860,474

												2023			2022			2023			2022
	Three months ended September 30,						Six months ended September 30,					Three months ended September 30,						Six months ended September 30,
		2022			2021			2022		2021		2023			2022			2023			2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flow from operating leases	$	895,480		$	1,017,777			1,860,474		1,973,345		$	65,856		$	895,480			132,851			1,860,474
Right-of-use assets obtained in exchange for new operating leases liabilities		-			167,658			-		345,847			19,511,181			-			19,512,400			-
Weighted average remaining lease term - Operating leases (years)		1.3			2.3			1.3		2.3			14.9			1.3			14.9			1.3
Weighted average discount rate - Operating leases		4.75	%		4.75	%		4.75	%	4.75	%		4.90	%		4.75	%		4.90	%		4.75	%

		1
Years ending September 30	Lease cost			Lease cost
2023	$	3,502,076
2024		963,525		$	1,104,618

2025					1,080,821
2026					987,236
2027					987,236
2028 and there after					25,877,279
Total lease payments		4,465,601			30,037,190
Less: Interest		(244,208	)		(10,322,022	)
Total	$	4,221,393		$	19,715,168

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.

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.

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 ~~7.116~~7.25 and ~~6.341~~6.87 as of September 30, ~~2022~~2023 and March 31, ~~2022,~~2023, respectively. Revenue and expenses are translated at the average yearly exchange rates, which was ~~6.723~~7.004 and ~~6.466~~6.603 for the ~~six~~three months ended September 30, ~~2022~~2023 and ~~2021,~~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.

The followings are the percentages of accounts receivable balance of the top customers over accounts receivable for each segment as of September 30, ~~2022~~2023 and March 31, ~~2022.~~2023.

	September 30, 2022		March 31, 2022		September 30, 2023			March 31, 2023
Customer A	89.0	%	85.3	%		86.3	%		82.5	%
Customer B	10.7	%	11.4	%		10.4	%		9.9	%
Customer C	0.3	%	Nil			3.3	%		3.5	%

The high concentration as of September 30, ~~2022~~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.

	September 30, 2022		March 31, 2022		September 30, 2023			March 31, 2023
Customer A	19.1	%	19.1	%		21.6	%		11.4	%
Customer B	10.1	%	3.9	%		13.9	%		10.2	%
Customer C	9.2	%	Nil	%		9.9	%		14.1	%
Customer D	8.7	%	0.1	%		8.2	%		6.4	%
Customer E	6.5	%	8.2	%		5.1	%		7.3	%

There is no account receivable for Property management and subleasing segment as ~~of both~~for September 30, ~~2022~~ and March 31, ~~2022.~~2023.

~~The accounts receivable of Epidemic prevention supplies segment, as at both September 30, 2022 and March 31, 2022, was from one customer only.~~Concentration on customers

For the three months ended September 30, 2023, one customer from Logistics services segment provided more than 10% of total revenue of the Company, representing 11.0% of total revenue of the Company for the three months. For the three months ended September 30, 2022, no customer provided more than 10% of total revenue of the Company. For the six months ended September 30, ~~2022, one customer~~2023, two customers from ~~garment~~Logistics services segment provided more than 10% of total revenue of the Company, ~~represented~~representing ~~10.5%~~23.9% of total revenue of the Company for the ~~six~~three months. For the ~~three and~~ six months ended September 30, ~~2021, one~~2022, no customer ~~from garment segment~~ provided more than 10% of total revenue of the ~~Company, represented~~ ~~14.0%~~ ~~of total revenue of the Company for the three months and~~ ~~34.5%~~ ~~for the six months.~~Company.

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

The following tables summarized the purchases from five largest suppliers of each of the reportable ~~segment~~segments for the three months ended September 30, ~~2022~~2023 and ~~2021.~~2022.

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 September 30, ~~2022,~~2023, the total outstanding borrowings amounted to $~~134,245~~129,785 (RMB~~955,281~~944,255) with various interest rate from ~~4.84%~~4.3% to ~~6.96%~~4.9% p.a. (Note ~~10)~~

The Coronavirus Disease (COVID-19) outbreak and the measures taken to contain the spread of the pandemic have created a high level of uncertainty to global economic prospects and this has impacted the Company’s operations and its financial performance in the last three quarters of the financial year and subsequent to the financial year end.

As the situation continues to evolve with significant level of uncertainty, the Company is unable to reasonably estimate the full financial impact of the COVID-19 outbreak. The Company is monitoring the situation closely and to mitigate the financial impact, it is conscientiously managing its cost by adopting an operating cost reduction strategy and conserving liquidity by working with major creditors to align repayment obligations with receivable collections.11)

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 and six months ended September 30, ~~2022~~2023 and ~~2021~~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.

We (Addentax Group Corp.) are a ~~garment manufacturer~~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 ~~logistics services provider based~~its subsidiaries. We are not a Chinese operating company. We are a holding company and do not directly own any substantive business operations in China. ~~We are~~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 of “ATXG”. We classify our businesses into ~~four~~three segments: ~~Garment~~garment manufacturing, ~~Logistics~~logistics services, ~~Property~~property management and ~~subleasing,~~subleasing.

Unless the context otherwise requires, all references in this annual report to “Addentax” refer to Addentax Group Corp., a holding company, and ~~Epidemic prevention supplies.~~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”), (xiv) Dongguan Hongxiang Commercial Co., Ltd., a PRC company (“HX”).

“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”), (xiv) Dongguan Hongxiang Commercial Co., Ltd., a PRC company (“HX”).

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 ~~People’s Republic of China (“PRC”).~~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 ~~requirement~~requirements for our customers. We conduct our garment manufacturing operations through ~~three~~five wholly owned subsidiaries, namely Dongguan Heng Sheng Wei Garments Co., Ltd (“HSW”), Dongguan Yushang Clothing Co., Ltd (“YS”), ~~and~~ Shantou Yi Bai Yi ~~Garments~~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 ~~logistic~~logistics business consists of delivery and courier services covering ~~approximately 79~~86 cities in ~~approximately seven~~11 provinces and ~~two~~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~~Ltd. (“DY”)., which is located in the Guangdong province, China.

~~Our epidemic prevention supplies business consists~~In February 2023, the Company disposed of ~~manufacturing and distribution of epidemic prevention products and resale of epidemic prevention supplies purchased from~~DY to an independent third party ~~in both domestic and overseas markets. We conduct our manufacturing~~at fair value, which was also its carrying value as of the epidemic prevention products in Dongguan Yushang Clothing Co., Ltd (“YS”). We conduct the trading of epidemic prevention suppliers through Addentax Group Corp. (“ATXG”) and Shenzhen Qianhai Yingxi Industrial Chain Services Co., Ltd (“YX”), a wholly owned subsidiary of the Company.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.

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.

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 September 30, ~~2022,~~2023, we provide logistics services to over 7986 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 in the year ~~end of 2023.~~2024.

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%.

~~The primary objective~~ In February 2023, the Company disposed of ~~our epidemic prevention supplies business is~~DY to ~~take~~an independent third party at fair value, which was also its carrying value as of February 28, 2023. In September 2023, we finished the ~~advantage~~acquisition of our resource in supply chain from the garment manufacturing business segment to facilitate and maximize the production, distribution and resale of epidemic prevention supplies, in order to increase our revenue base and improve our net profit.HX.

Our business is affected by seasonal trends, with higher levels of garment sales induring our second and third quarters and higher logistics services revenue induring 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.

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.

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.

For property management and subleasing business, we generally collect rental and management fees of the following month each month in advance.

For Epidemic prevention supplies business, we generally receive payment from the customers within 30 days following the delivery of finished goods. We would also give our long-term customers with a 12 months long credit term policy to maintain a good business relationship.

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.

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.

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 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:

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.

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.

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.

In ~~June~~September 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.

Results of Operations for the three months ended September 30, ~~2022~~2023 and ~~2021~~2022

The following tables summarize our results of operations for the three months ended September 30, ~~2022~~2023 and ~~2021.~~2022. 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.

Total revenue for the three months ended September 30, ~~2022~~2023 decreased by approximately ~~$0.6~~$0.8 million, or ~~22.3%~~37.7%, as compared with the three months ended September 30, ~~2021.~~2022. The decrease was mainly due to athe decrease of ~~approximately $0.4 million in garment manufacturing, a decrease of approximately $0.1 million in logistics services business, and a decrease of approximately $0.1~~$0.9 million in property management and subleasing business and $0.1 million increase in garment manufacturing business.

~~There was nearly no revenue~~Revenue generated from our garment manufacturing business ~~for the three months ended September 30, 2022. The revenue generated from the segment was $0.4~~contributed approximately $0.1 million or ~~approximately 14.3%,~~6.8% of our total revenue for the three months ended September 30, ~~2021. The decrease of~~2023. Revenue generated from garment manufacturing business contributed approximately $0.4 million or 14.3% of our total revenue for the three months ended September 30, 2022, respectively. The low level of sales was mainly due to factory facilities renewal and repair, remaining factories cannot provide ~~as much~~the same capacity as previously. We estimate the capacity will ~~appear to~~ recover inat the ~~third~~last quarter of ~~FY2023.~~the fiscal year ending 2024.

Revenue generated from our logistics services business contributed approximately $1.2 million or ~~57.0%,~~88.8% of our total revenue for the three months ended September 30, ~~2022.~~2023. Revenue generated from our logistic business contributed approximately ~~$1.3~~$1.2 million or ~~47.8%,~~57.0% of our total revenue for the three months ended September 30, ~~2021.~~2022.

Revenue generated from our property management and subleasing business ~~contributed approximately $0.9~~was $0.06 million or ~~42.9%,~~4.3% of our total revenue for the three months ended September 30, ~~2022.~~2023. The revenue from this business segment was ~~$1.0~~$0.9 million or ~~38.0%,~~42.9% of our total revenue of this business for the three months ended September 30, ~~2021.~~

There was only $1,299 generated from our epidemic prevention supplies business for the three months ended September 30, 2022 because no other orders were obtained in the quarter. The Company accepted sales orders very cautiously to make sure the sales orders can be matched with stable suppliers to secure profitability of each order. There was no revenue generated from this business for the three months ended September 30, 2021.2022.

	Three months ended September 30,									Increase (decrease) in					Three months ended September 30,									Increase (decrease) in
	2022					2021				2022 compared to 2021					2023				2022					2023 compared to 2022
	(In U.S. dollars, except for percentages)														(In U.S. dollars, except for percentages)
Net revenue for garment manufacturing	$	861		100.0	%	$	393,391	100	%	$	(392,530	)	(99.8	)%	$	91,218	100.0	%	$	861		100	%	$	90,357		10494.4	%
Raw materials		-		-	%		269,258	68.4	%		(263,580	)	(100.0	)%		26,377	28.9	%		-		-	%		26,377		100.0	%
Labor		779		90.5	%		86,044	21.9	%		(85,265	)	(99.1	)%		46,404	50.9	%		779		90.5	%		45,625		5856.9	%
Other and Overhead		584		67.8	%		6,420	0.5	%		(5,836	)	(90.9	)%		2,670	2.9	%		584		67.8	%		2,086		357.2	%
Total cost of revenue for garment manufacturing		1,363		158.3	%		361,722	91.9	%		(360,359	)	(99.6	)%		75,451	82.7	%		1,363		158.3	%		74,088		5435.7	%
Gross profit (loss) for garment manufacturing		(502	)	(58.3	)%		31,670	8.1	%		(32,171	)	(101.6	)%		15,767	17.3	%		(502	)	(58.3	)%		16,269		3240.8	%

Net revenue for logistics services		1,221,658		100.0	%		1,317,360	100.0	%		(95,702	)	(7.3	)%		1,186,033	100.0	%		1,221,658		100.0	%		(35,625	)	(2.9	)%
Fuel, toll and other cost of logistics services		665,401		54.4	%		448,355	34.1	%		217,046		48.4	%		513,789	43.3	%		665,401		54.4	%		(151,612	)	(22.8	)%
Subcontracting fees		196,105		16.1	%		539,417	40.9	%		(343,312	)	(63.6	)%		338,577	28.6	%		196,105		16.1	%		142,472		72.7	%
Total cost of revenue for logistics services		861,506		70.5	%		987,772	75.0	%		(126,266	)	(12.8	)%		852,366	71.9	%		861,506		70.5	%		(9,140	)	(1.1	)%
Gross Profit for logistics services		360,152		29.5	%		329,588	25.0	%		30,564		9.3	%		333,667	28.1	%		360,152		29.5	%		(26,485	)	(7.4	)%

Net revenue for property management and subleasing		920,201		100.0	%		1,047,081	100.0	%		(126,880	)	(12.1	)%		58,063	100.0	%		920,201		100.0	%		(862,138	)	(93.7	)%
Total cost of revenue for property management and subleasing		713,868		77.6	%		937,915	89.6	%		(224,047	)	(23.9	)%		4,610	7.9	%		713,868		77.6	%		(709,258	)	(99.4	)%
Gross Profit for property management and subleasing		206,333		22.4	%		109,165	10.4	%		97,168		89.0	%		53,453	92.1	%		206,333		22.4	%		(152,880	)	(74.1	)%

Net revenue for epidemic prevention supplies	$	1,299		100.0	%	$	-				1,299				$	-	0	%	$	1,299		100.0	%		(1,299	)	(100.0	)%
Merchandise/Finished goods/Raw materials		2,120		163.2	%		-				2,120
Other and Overhead																-	0	%		2,120		163.2	%		(2,120	)	(100.0	)%
Total cost of revenue for epidemic prevention supplies		2,120		163.2	%		-				2,120					-	0	%		2,120		163.2	%		(2,120	)	(100.0	)%
Gross (loss) income for epidemic prevention supplies		(821	)	(63.2	)%		-				(821	)				-	0	%		(821	)	(63.2	)%		821		100.0	%
Total cost of revenue	$	1,578,858		73.6	%	$	2,287,407	82.9	%	$	(708,549	)	(31.0	)%	$	932,427	69.8	%	$	1,578,858		73.6	%	$	(646,431	)	57.7	%
Gross profit	$	565,161		26.4	%	$	470,425	17.1	%	$	94,736		20.1	%	$	402,887	30.2	%	$	565,161		26.4	%	$	(162,274	)	(48.1	)%

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

Raw material costs for our garment manufacturing business was ~~nil in~~approximately 28.9% of our total garment manufacturing business revenue for the three months ended September 30, ~~2022,~~2023, as compared with ~~approximately $0.3 million in~~nil for the three months ended September 30, ~~2021.~~2022.

Labor costs for our garment manufacturing business was approximately ~~90.5%~~50.9% of our total garment manufacturing business revenue infor the three months ended September 30, ~~2022,~~2023, as compared with ~~approximately 21.9% in~~90.5% for the three months ended September 30, ~~2021. The increase was mainly due to the rising wages in the PRC.~~2022.

Overhead and other expenses for our garment manufacturing business accounted for approximately ~~67.8%~~2.9% of our total garment business revenue for the three months ended September 30, ~~2022,~~2023, as compared with ~~approximately 0.5%~~67.8% of total garment business revenue for the three months ended September 30, ~~2021.~~2022.

For our logistic business, we outsource some of ~~the~~our business to our contractors. The Company relied on a few subcontractors, in which the subcontracting fees to our largest contractor represented approximately ~~26.7%~~35.1% and ~~35.6%~~26.7% of total cost of revenues for our service segment for the three months ended September 30, ~~2022~~2023 and ~~2021,~~2022, respectively. The ~~decrease~~increase was ~~mainly due~~attributed to ~~our~~a decrease usage of our own logistics ~~more than~~as compared to the subcontractors ~~during~~after the COVID-19 epidemic. We have not experienced any ~~disputes~~dispute 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 September 30, ~~2022 were~~2023 was approximately ~~$0.7~~$0.5 million as compared with ~~$0.4~~$0.7 million for the three months ended September 30, ~~2021.~~2022. Fuel, toll and other costs for our service business accounted for approximately ~~54.4%~~43.3% of our total service revenue for the three months ended September 30, ~~2022,~~2023, as compared with ~~approximately 34.1%~~54.4% for the three months ended September 30, ~~2021.~~2022. The ~~increase~~decrease was primarily attributable to ~~a decrease in the use~~an increase of usage of subcontractors ~~under~~after the COVID-19 ~~epidemic circumstance.~~epidemic.

Subcontracting fees for our service business for the three months ended September 30, ~~2022 decreased~~2023 increased significantly by approximately ~~63.6%~~72.7% to ~~approximately $0.2~~$0.3 million from ~~$0.5~~$0.2 million for the three months ended September 30, ~~2021.~~2022. Subcontracting fees accounted for approximately ~~16.1%~~28.6% and ~~40.9%~~16.1% of our total service business revenue in the three months ended September 30, ~~2022~~2023 and ~~2021,~~2022, respectively. The ~~decrease~~increase was primarily ~~due~~attributable to a decrease usage of our own logistics as compared to the ~~Company used less~~ subcontractors ~~under~~after the COVID-19 ~~epidemic circumstance.~~epidemic.

For property management and subleasing business, the cost of revenue was mainly the amortization of operating lease assets for the subleasing business.

~~For epidemic prevention supplies business, we have trading~~ The Company disposed of DY in February 2023 and ~~own production segments. The cost of~~acquired HX in September 2023. Therefore, there was minor revenue ~~was predominately~~from this segment in the ~~cost of merchandise and cost of our own products.~~quarter.

Garment manufacturing business gross ~~loss~~profit for the three months ended September 30, ~~2022~~2023 was approximately ~~$502,~~$15.8 thousand, as compared with a ~~gross profit~~loss of approximately ~~$31,670~~$0.5 thousand for the three months ended September 30, ~~2021.~~2022. Gross ~~loss~~profit accounted for ~~-58.3%~~approximately 17.3% of our total ~~Garment~~garment manufacturing business revenue for the three months ended September 30, ~~2022, as compared with a gross profit of 8.1% for the three months ended September 30, 2021.~~2023.

Gross profit in our logistics services business for the three months ended September 30, ~~2022~~2023 was approximately ~~$0.4 million~~$333,700 and gross margin was ~~29.5%~~28.1%. Gross profit in our logistics services business for the three months ended September 30, ~~2021~~2022 was approximately ~~$0.3 million~~$360,200 and gross margin was ~~25.0%~~29.5%. The ~~increase~~decrease of gross profit ~~margin~~ratio was mainly ~~attributable to a decrease of operating expenses due to replacement of old vehicles and shifting our strategic focus on high margin customers.~~because.

Gross profit in our property management and subleasing business for the three months ended September 30, ~~2022~~2023 was approximately ~~$0.2 million, or 22.4% of our total property management and subleasing business revenue.~~$53,500 . It was approximately ~~$0.1 million,~~$206,300 , or ~~10.4%~~22.4% margin for the three months ended September 30, ~~2021.~~2022.

Our selling expenses were mainly incurred for our property management and subleasing business. It was $37,200 and approximately ~~$0.03 million and $0.07 million~~$30,000 for the three months ended September 30, ~~2022~~2023 and ~~2021,~~2022, respectively. Selling expenses ~~consist~~consisted primarily of advertisement, local transportation, unloading charges and product inspection charges.

Our general and administrative expenses in our ~~Garment~~garment manufacturing business segment for the three months ended September 30, 2023 and 2022 was approximately $34,400 and ~~2021 was both approximately $0.03 million.~~$27,700, respectively. Our general and administrative expenses in our logistics services segment for the three months ended September 30, 2023 and 2022 was approximately $160,700 and ~~2021 was both approximately $0.2 million.~~$207,800, respectively. The general and administrative expenses in our property management and subleasing business ~~remained stable at~~was approximately ~~$0.09 million~~nil and $86,700 for the three months ended September 30, ~~2022~~2023 and ~~2021. Our general and administrative expenses in our epidemic prevention supplies segment was both nil for the three months ended September 30,~~ 2022, ~~and 2021,~~ respectively. Our general and administrative expenses in our corporate office for the three months ended September 30, 2023 and 2022 was approximately $475,600 and ~~2021 remained stable at approximately $0.1 million.~~$142,800, respectively. General and administrative expenses ~~consist~~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.~~revenues .

Total general and administrative expenses for the three months ended September 30, ~~2022~~2023 increased by approximately ~~0.5%~~44.2% to ~~approximately $0.47 million~~$670,600 from ~~$0.46 million~~$465,000 for the three months ended September 30, ~~2021.~~2022.

~~Income (loss)~~Loss from operations for the three months ended September 30, 2023 was approximately $304,900, while income from operations for the three months ended September 30, 2022 ~~and 2021~~ was ~~approximately $0.07 million and ($0.04) million, respectively. (Loss) Income~~$70,200. Loss from operations of approximately ~~($28,088)~~$19,000 and ~~$1,119 was attributed from our garment manufacturing segment~~$28,100 for the three months ended September 30, ~~2022~~2023 and ~~2021,~~2022, respectively. Income from operations of approximately ~~$0.15 million~~$172,300 thousand and ~~$0.1 million~~$152,400 thousand was attributed from our logistics services segment for the three months ended September 30, 2023 and 2022, ~~and 2021,~~ respectively. ~~Income~~Loss from operations of approximately ~~$0.09 million~~$13,400 and ~~$0.02 million~~income from operations of $89,600 for the three months ended September 30, 2023 and 2022 was attributed from our property management and subleasing business, respectively. We incurred expenses from operations in corporate office of approximately $444,900 and $143,800 for the three months ended September 30, 2023 and 2022, ~~and 2021,~~ respectively. ~~There was a loss~~The increase of approximately $974 and nil from operations attributed from our epidemic prevention supplies segment for the three months ended September 30, 2022 and 2021, respectively. We incurred a loss from operations in corporate office of approximately $0.1 million and $0.1 million for both the three months ended September 30, 2022 and 2021. The lossexpenses 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 expense for the three months ended September 30, ~~2022~~2023 and ~~2021~~2022 was approximately ~~$0.009 million~~$3,200 and ~~$0.005 million,~~$9,500, 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, ~~and~~ 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 ~~have~~has been made as Yingxi HK had no taxable income for the three months ended September 30, ~~2022~~2023 and ~~2021.~~2022.

QYTG and YX were incorporated in the PRC and isare subject to the PRC Enterprise Income Tax ~~(“EIT”)~~(EIT) rate is 25%. No provision for income taxes in the PRC ~~have~~has been made as QYTG and YX had no taxable income for the three months ended September 30, ~~2022~~2023 and ~~2021.~~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 ~~2022.~~2023. The preferential tax rates will be expired at end of ~~year 2022 and the EIT rate will be 25% from~~ year 2023.

The Company’s parent entity, Addentax Group Corp. is a ~~U.S~~U.S. entity and is subject to the United States federal income tax. No provision for income taxes in the United States ~~have~~has been made as Addentax Group Corp. had no United States taxable income for the three months ended September 30, ~~2022~~2023 and ~~2021.~~2022.

We incurred net income of approximately ~~$0.08 million and $0.03~~$1.4 million for the three months ended September 30, ~~2022~~2023 and ~~2021, respectively.~~a net income of approximately $0.08 million for the three months ended September 30, 2022. Our basic and diluted earnings per share were ~~$0.00~~$0.37 and $0.00 for the three months ended September 30, ~~2022~~2023 and ~~2021,~~2022, respectively.

Results of Operations for the six months ended September 30, ~~2022~~2023 and ~~2021~~2022

The following tables summarize our results of operations for the six months ended September 30, ~~2022~~2023 and ~~2021.~~2022. 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.

	Six months Ended September 30,										Changes in 2022					Six Months Ended September 30,										Changes in 2023
	2022					2021					compared to 2021					2023					2022					compared to 2022
	(In U.S. dollars, except for percentages)															(In U.S. dollars, except for percentages)
Revenue	$	4,530,403		100.0	%	$	7,044,263		100.0	%	$	(2,513,860	)	(35.7	)%	$	2,387,820		100	%%	$	4,530,403		100.0	%	$	(2,142,583	)	(47.3	)%
Cost of revenues		(3,508,558	)	(77.4	)%		(5,990,433	)	(85.0	)%		2,481,875		41.4	%		(1,748,024	)	(73.2	)%		(3,508,558	)	(77.4	)%		1,760534		50.2	%
Gross profit		1,021,845		22.6	%		1,053,830		15.0	%		(31,985	)	(3.0	)%		639,796		26.8	%		1,021,845		22.6	%		(382,049	)	(37.4	)%
Operating expenses		(905,591	)	(20.0	)%		(1,015,393	)	(14.4	)%		109,802		10.8	%		(1,205,677	)	(50.5	)%		(905,591	)	(20.0	)%		(300,086		(33.1	)%
Income from operations		116,254		2.6	%		38,437		0.6	%		77,817		(202.5	)%
(Loss) Income from operations																	(565,881	)	(23.7	)%		116,254		2.6	%		(682,135	)	(586.8	)%
Other income, net		74,056		1.6	%		89,001		1.3	%		(14,945	)	(16.8	)%		(469,414	)	(19.7	)%		74,056		1.6	%		(543,470	)	(733.9	)%
Fair value gain																	1,566,592		71.5	%		-		-			1,566,592		-
Net finance cost		333		(0.0	)%		(786	)	(0.0	)%		1,119		142.4	%		(1,893,117	)	(79.3	)%		333		(0.0	)%		(1,893,450	)	40505.4	%
Income tax expense		(10,755	)	(0.2	)%		(15,684	)	(0.2	)%		4,929		31.4	%		(4,501	)	(0.2	)%		(10,755	)	(0.2	)%		6,254		58.1	%
Net income	$	179,888		4.0	%	$	110,968		1.6	%	$	68,920		62.1	%
Net (loss) income																$	(1,366,321	)	(51.4	)%	$	179,888		4.0	%	$	(1,546,209	)	(859.5	)%

Total revenue for the six months ended September 30, ~~2022~~2023 decreased by approximately ~~$2.5~~$2.1 million, or ~~35.7%~~47.3%, as compared with the six months ended September 30, ~~2021.~~2022. The decrease was mainly due to the ~~significant~~increase of $0.1 million in garment manufacturing business, the decrease of ~~Garment Manufacturing Business.~~$0.4 million in logistics services and $1.8 million in property management and subleasing business.

~~Losses~~Revenue generated from our garment manufacturing business contributed approximately $0.1 million or 6.1% of our total revenue for the six months ended September 30, 2023. Revenue generated from garment manufacturing business contributed approximately $0.04 million ~~(0.9%) and $2.5 million (35.0%)~~or 0.9% of our total ~~losses~~revenue for the six months ended September 30, 2022, ~~and 2021,~~ respectively. The ~~decrease~~low level of sales was mainly due to factory facilities renewal and repair, remaining factories cannot provide ~~as much~~the same capacity as previously. We estimate the capacity will appear to recover ~~in the third~~at last quarter of ~~FY2023.~~for the fiscal year ending 2024.

Revenue generated from our logistics services business contributed approximately ~~$2.6~~$2.2 million or ~~57.7%,~~91.5% of our total revenue for the six months ended September 30, ~~2022.~~2023. Revenue generated from our logistic business contributed approximately ~~$2.4~~$2.6 million or ~~34.4%,~~57.7% of our total revenue for the six months ended September 30, ~~2021. The increase of $0.2 million was due to XKJ’s sales were $0.3 million higher than the six months ended September 30, 2021.~~2022.

Revenue generated from our property management and subleasing business ~~contributed approximately $1.9~~was $0.06 million ~~or 41.4%, of our total revenue~~ for the six months ended September 30, ~~2022. Revenue generated~~2023. The revenue from ~~our property management and subleasing~~this business ~~contributed approximately $2.2~~segment was $1.9 million or ~~30.6%,~~41.4% of our total revenue ~~for the six months ended September 30, 2021.~~

~~There was only a minor sale~~ of ~~$1,540 of epidemic prevention supplies products for the six months ended September 30, 2022. There was no revenue generated from our epidemic prevention supplies~~this business for the six months ended September 30, 2021 because no profitable orders were obtained in the quarter. The Company accepted sales orders very cautiously to ensure the sales orders can be matched with stable suppliers to secure profitability of each order.2022.

	Six months ended September 30,									Increase (decrease) in					Six months ended September 30,									Increase (decrease) in
	2022					2021				2022 compared to 2021					2023				2022					2023 compared to 2022
	(In U.S. dollars, except for percentages)														(In U.S. dollars, except for percentages)
Net revenue for garment manufacturing	$	41,287		100.0	%	$	2,462,532	100.0	%	$	(2,421,245	)	(98.3	)%	$	145,091	100.0	%	$	41,287		100.0	%	$	103,804		251.4	%
Raw materials		27,551		66.7	%		1,710,591	69.5	%		(1,683,040	)	(98.4	)%		25,950	17.9	%		27,551		66.7	%		(1,601	)	(5.8	)%
Labor		9,268		22.4	%		529,335	21.5	%		(520,067	)	(98.2	)%		93,140	64.2	%		9,268		22.4	%		83,872		905.0	%
Other and Overhead		1,619		3.9	%		16,818	0.7	%		(15,199	)	(90.4	)%		2,681	1.8	%		1,619		3.9	%		1,062		65.6	%
Total cost of revenue for garment manufacturing		38,438		93.1	%		2,256,744	91.6	%		(2,218,306	)	(98.3	)%		121,771	83.9	%		38,438		93.1	%		83,333		216.8	%
Gross profit for garment manufacturing		2,849		6.9	%		205,789	8.4	%		(202,940	)	(98.6	)%		23,320	16.1	%		2,849		6.9	%		20,471		718.5	%

Net revenue for logistics services		2,612,540		100.0	%		2,425,402	100.0	%		187,138		7.7	%		2,184,666	100.0	%		2,612,540		100.0	%		(427,874	)	(16.4	)%
Fuel, toll and other cost of logistics services		1,267,987		48.5	%		841,505	34.7	%		426,482		50.7	%		1,001,219	45.8	%		1,267,986		48.5	%		(266,767	)	(21.0	)%
Subcontracting fees		637,301		24.4	%		1,026,138	42.3	%		(388,837	)	(37.9	)%		620,424	28.4	%		637,301		24.4	%		(16,877	)	(2.6	)%
Total cost of revenue for logistics services		1,905,288		72.9	%		1,867,643	77.0	%		37,645		2.0	%		1,621,643	74.2	%		1,905,287		72.9	%		(283,644	)	(14.9	)%
Gross Profit for logistics services		707,253		27.1	%		557,758	23.0	%		149,495		26.8	%		563,023	25.8	%		707,253		27.1	%		(144,230	)	(20.4	)%

Net revenue for property management and subleasing		1,875,036		100.0	%		2,156,329	100.0			(281,293	)	(13.0	)%		58,063	100.0	%		1,875,036		100.0	%		(1,816,973	)	(96.9	)%
Total cost of revenue for property management and subleasing		1,562,318		83.3	%		1,864,557	86.5			(302,239	)	(16.2	)%		4,610	7.9	%		1,562,318		83.3	%		(1,557,708	)	(99.7	)%
Gross Profit for property management and subleasing		312,718		16.7	%		291,771	13.5			20,947		7.2	%		53,453	92.1	%		312,718		16.7	%		(259,265	)	(82.9	)%

Net revenue for epidemic prevention supplies	$	1,540		100.0	%	$	-	%			1,540				$	-	-		$	1,540		100.0	%		(1,540	)	(100.0	)%
Merchandise/Finished goods/Raw materials		2,514		163.2	%		-	%			2,514
Other and Overhead																-	-			2,514		163.2	%		(2,514	)	(100.0	)%
Total cost of revenue for epidemic prevention supplies		2,514		163.2	%		-	%			2,514					-	-			2,514		163.2	%		(2,514	)	(100.0	)%
Gross loss for epidemic prevention supplies		(974	)	(63.2	)%		-	%			(974	)
Gross (loss) income for epidemic prevention supplies																-	-			(974	)	(63.2	)%		974		100.0	%
Total cost of revenue	$	3,508,558		77.6	%	$	5,990,433	85.0	%	$	(2,481,875	)	(41.4	)%	$	1,748,024	73.2	%	$	3,508,558		77.6	%	$	1,760,534		50.2	%
Gross profit	$	1,021,845		22.4	%	$	1,053,830	15.0	%	$	(31,985	)	(3.0	)%	$	639,796	26.8	%	$	1,021,845		22.4	%	$	(382,049	)	(37.4	)%

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 approximately66.7%~~was approximately 17.9% of our total garment manufacturing business revenue infor the six months ended September 30, ~~2022,~~2023, as compared with ~~69.5% in~~66.7% for the six months ended September 30, ~~2021.~~2022. The decrease in percentages was mainly due ~~to the decrease of the average purchase cost of the raw materials.~~to.

Labor costs for our garment manufacturing business ~~were~~was approximately ~~22.4%~~64.2% of our total garment manufacturing business revenue infor the six months ended September 30, ~~2022,~~2023, as compared with ~~21.5% in~~22.4% for the six months ended September 30, ~~2021.~~2022. The increase was mainly due ~~to the rising wages in the PRC.~~to.

Overhead and other expenses for our garment manufacturing business accounted for approximately ~~3.9%~~1.8% of our total garment business revenue for the six months ended September 30, ~~2022,~~2023, as compared with ~~0.7%~~3.9% of total garment business revenue for the six months ended September 30, ~~2021.~~2022.

For our logistic business, we ~~outsourced~~outsource some of ~~the~~our business to our contractors. The Company relied on a few subcontractors, in which the subcontracting fees to our largest ~~subcontractor~~contractor represented approximately ~~24.4%~~36.1% and ~~18.8%~~24.4% of total cost of revenues for our service segment for the six months ended September 30, ~~2022~~2023 and ~~2021,~~2022, respectively. The ~~percentage decreased due~~increase was attributed to ~~the~~a decrease usage of our own logistics ~~more than usage of~~as compared to the subcontractors ~~under~~after 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 ~~providers.~~provider.

Fuel, toll and other costs for our service business for the six months ended September 30, ~~2022 were~~2023 was approximately ~~$1.3~~$1.0 million as compared with ~~$0.8~~$1.3 million for the six months ended September 30, ~~2021.~~2022. Fuel, toll and other costs for our service business accounted for approximately ~~48.5%~~45.8% of our total service revenue for the six months ended September 30, ~~2022,~~2023, as compared with ~~34.7%~~48.5% for the six months ended September 30, ~~2021.~~2022. The ~~increase~~decrease was primarily attributable to ~~decrease~~an increase of ~~use~~usage of subcontractors ~~under~~after the ~~epidemic circumstance.~~COVID-19 epidemic.

Subcontracting fees for our service business for the six months ended September 30, ~~2022~~2023 decreased approximately ~~37.9%~~2.6% to ~~approximately $0.6~~$0.62 million from ~~$1.0~~$0.64 million for the six months ended September 30, ~~2021.~~2022. Subcontracting fees accounted for ~~approximately~~28.4% and 24.4% ~~and 42.3%~~ of our total service business revenue in the six months ended September 30, 2023 and 2022, ~~and 2021,~~ respectively. ~~This decrease~~The increase was primarily ~~because~~attributable a decrease usage of our own logistics as compared to the ~~Company used less~~ subcontractors ~~under~~after the ~~epidemic circumstance.~~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.

~~For epidemic prevention supplies business, we have trading~~ The Company disposed of DY in February 2023 and ~~own production. The cost of~~acquired HX in September 2023. Therefore, there was no revenue ~~included cost of merchandise and cost of our own products.~~from this segment in the quarter.

Garment manufacturing business ~~generated a gross profit of approximately $2,849 for the six months ended September 30, 2022. There was approximately $0.2 million~~ gross profit for the six months ended September 30, ~~2021.~~2023 was approximately $23,300, as compared with approximately $2,800 for the six months ended September 30, 2022. Gross profit accounted for ~~6.9%~~16.1% of our total ~~Garment~~garment manufacturing business revenue for the six months ended September 30, ~~2022,~~2023, as compared ~~with a gross profit of 8.4%~~to 6.9% for the six months ended September 30, ~~2021.~~2022.

Gross profit in our logistics services business for the six months ended September 30, ~~2022~~2023 was approximately ~~$0.7 million~~$563,000 and gross margin was ~~27.1%~~25.8%. Gross profit in our logistics services business for the six months ended September 30, ~~2021~~2022 was approximately ~~$0.6 million~~$707,300 and gross margin was ~~23.0%~~27.1%. The ~~increase~~decrease of gross profit ratio was mainly attributable to a decrease of subcontracting fees under the COVID-19 epidemic circumstances and a decrease of operating expenses due to replacement of old vehicles and shifting our strategic focus on high margin customers.because.

Gross profit in our property management and subleasing business for the six months ended September 30, ~~2022 and 2021was both~~2023 was $53,500. It was approximately ~~$0.3 million. It accounted for approximately~~$312,700, or 16.7% ~~and 13.5% of our total property management and subleasing business revenue~~ for the six months ended September 30, ~~2022 and 2021, respectively.~~2022.

	Six months ended September 30,										Increase (decrease) in					Six months ended September 30,										Increase (decrease) in
	2022					2021					2022 compared to 2021					2023					2022					2023 compared to 2022
	(In U.S. dollars, except for percentages)															(In U.S. dollars, except for percentages)
Gross profit	$	1,021,845		100	%	$	1,053,830		100	%		(31,985	)	(3.0	)%	$	639,796		100.0	%	$	1,021,845		100.0	%		(382,049	)	(37.4	)%
Operating expenses:
Selling expenses		(35,644	)	(3.5	)%		(92,192	)	(8.7	)%		56,548		61.3	%		(37,212	)	(1.6	)%		(35,644	)	(3.5	)%		(1,568	)	(4.4	)%
General and administrative expenses		(869,947	)	(85.7	)%		(923,201	)	(87.6	)%		53,254		5.8	%		(1,168,465	)	(48.9	)%		(869,947	)	(85.7	)%		(298,518	)	(34.3	)%
Total	$	(905,591	)	(89.2	)%	$	(1,015,393	)	(96.4	)%		109,802		10.8	%	$	(1,205,677	)	(50.5	)%	$	(905,591	)	(89.2	)%		(300,086	)	(33.1	)%
Income from operations	$	116,254		10.8	%	$	38,437		3.6	%		77,817		202.5	%
(Loss) Income from operations																$	(565,881	)	(23.7	)%	$	116,254		10.8	%		(682,135	)	(586.8	)%

Our selling expenses inwere mainly incurred for our ~~Garment manufacturing business segment~~property management and subleasing business. It was $37,200 and approximately $35,600 for the six months ended September 30, ~~2022~~2023 and ~~2021 was nil and approximately $0.001 million, respectively. Our selling expenses in our logistics services segment was nil for the six months ended September 30,~~ 2022, ~~and 2021,~~ respectively. Selling expenses in our property management and subleasing business was $0.04 million and $0.09 million for the six months ended September 30, 2022 and 2021, respectively. Selling expenses in our epidemic prevention supplies segment was nil for both the six months ended September 30, 2021 and 2020. Selling expenses consistconsisted primarily of advertisement, local transportation, unloading charges and product inspection charges. ~~Total selling expenses for the six months ended September 30, 2022 decreased approximately 61.3% to $0.04 million from $0.09 million for the six months ended September 30, 2021.~~

Our general and administrative expenses in our ~~Garment~~garment manufacturing business segment ~~was approximately $0.06 million and $0.08 million~~ for the six months ended September 30, 2023 and 2022 was approximately $64,100 and ~~2021,~~$59,600, respectively. Our general and administrative expenses in our logistics services segment for the six months ended September 30, 2023 and 2022 was approximately $388,100 and ~~2021 was both approximately $0.4 million.~~$434,800, respectively. The general and administrative expenses in our property management and subleasing business was approximately ~~$0.2 million~~nil and $153,400 for ~~both~~ the six months ended September 30, 2023 and 2022, ~~and 2021. Our general and administrative expenses in our epidemic prevention supplies segment was nil for both the six months ended September 30, 2022 and 2021.~~respectively. Our general and administrative expenses in our corporate office for the six months ended September 30, 2023 and 2022 was approximately $716,300 and ~~2021 was both approximately $0.2 million.~~$222,200, respectively. General and administrative expenses ~~consist~~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 six months ended September 30, ~~2022 was nearly the same as that for the six months ended September 30, 2021.~~

~~Income (loss)~~2023 increased by approximately 34.3% to $1.2 million from ~~operations~~

~~Income from operations was approximately $0.1 million and $0.04~~$0.9 million for the six months ended September 30, 2022.

Loss from operations for the six months ended September 30, 2023 was approximately $565,900, while income from operations for the six months ended September 30, 2022 ~~and 2021, respectively.~~was $116,300. Loss from operations of approximately ~~$0.06 million~~$41,100 and $56,700 for the six months ended September 30, 2023 and 2022 was attributed from our garment manufacturing segment, ~~for the six months ended September 30, 2022.~~respectively. Income from operations of approximately ~~$0.1 million was attributed from our garment manufacturing segment for the six months ended September 30, 2021. Income from operations of approximately $0.3 million~~$174,200 and ~~$0.1 million~~$272,400 was attributed from our logistics services segment for the six months ended September 30, 2023 and 2022, ~~and 2021,~~ respectively. ~~Our property management and subleasing business segment generated approximately $0.1 million income~~Loss from operations of approximately $13,400 and ~~approximately $0.03 million loss from operations~~income of $123,700 for the six months ended September 30, ~~2022~~2023 and ~~2021, respectively. Loss from operations of $974 and nil~~2022 was attributed from our ~~epidemic prevention supplies segment~~property management and subleasing business, respectively. We incurred expenses from operations in corporate office of approximately $685,600 and $223,100 for the six months ended September 30, 2023 and 2022, ~~and 2021,~~ respectively. ~~We incurred a loss from operations in corporate office~~The increase of ~~approximately $0.2 million for both the six months ended September 30, 2022 and 2021. The loss~~expenses from our corporate office was mainly due to an increase in legal and professional fees to comply with the SEC accounting, disclosure and reporting requirements.

Income tax expense for the six months ended September 30, ~~2022~~2023 and ~~2021~~2022 was approximately ~~$10,755~~$4,500 and ~~$15,684,~~$10,800, 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, ~~and~~ 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 ~~have~~has been made as Yingxi HK had no taxable income for the six months ended September 30, ~~2022~~2023 and ~~2021.~~2022.

QYTG and YX were incorporated in the PRC and isare subject to the PRC Enterprise Income Tax (EIT) rate is 25%. No provision for income taxes in the PRC ~~have~~has been made as QYTG and YX had no taxable income for the six months ended September 30, ~~2022~~2023 and ~~2021.~~2022.

The Company’s parent entity, Addentax Group Corp. is a ~~U.S~~U.S. entity and is subject to the United States federal income tax. No provision for income taxes in the United States ~~have~~has been made as Addentax ~~aGroup~~Group Corp. had no United States taxable income for the six months ended September 30, ~~2022~~2023 and ~~2021.~~2022.

We incurred a net ~~income~~loss of approximately ~~$0.2 million and $0.1~~$1.4 million for the six months ended September 30, ~~2022~~2023 and ~~2021, respectively.~~a net income of approximately $0.2 million for the six months ended September 30, 2022. Our basic and diluted earnings per share were ~~$0.01~~($0.37) and $0.00 for the six months ended September 30, ~~2022~~2023 and ~~2021,~~2022, respectively.

Summary cash flows information for the six months ended September 30, ~~2022~~2023 and ~~2021~~2022 is as follow:

Net cash used in operating activities in the six months ended September 30, 2023 was nearly the same as that of the three months ended September 30, 2022.

Net cash ~~provided by operating~~used in investing activities in the six months ended September 30, 2023 was for purchase of property and equipment. Net cash used in investing activities in the six months ended September 30, 2022 was approximately $1.7 million less than that of the six months ended September 30, 2021. The decrease mainly because the movement of operating assets and liabilities of the six months ended September 30, 2022 resultedfor investment in cash outflow of approximately $1.9 million, while the movement of operating assets and liabilities of the six months ended September 30, 2021 resulted in cash inflow of approximately $0.5 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 used in investing activities for the six months ended September 30, 2022 was approximately $17.5 million, approximately $17.4 million more than that of the six months ended September 30, 2021. The increase was mainly because there was a purchase of debt ~~securities in the six months ended September 30, 2022.~~securities.

Net cash provided by financing activities for the six months ended September 30, ~~2022 was approximately $20.8~~2023 included $3.9 million ~~more than~~released from restricted cash and net repayment of $1.1 million to related parties. Net cash provided by financing activities for the six months ended September 30, ~~2021. The increase was mainly because the Company received approximately~~2022 included $20.2 million proceeds from its public offering and ~~the~~$0.6 million net ~~cash~~ repayment ofto related ~~party borrowings in current period was approximately $1.1 million less than that of the six months ended September 30, 2021.~~parties.

As of September 30, ~~2022,~~2023, we had cash on hand of approximately ~~$2.0~~$1.7 million, total current assets of approximately ~~$27.4~~$30.2 million and current liabilities of approximately ~~$8.6~~$4.9 million. We presently finance our operations ~~by using the cash flows~~ from revenue, fund raising from ~~IPO proceedings~~our initial public offering proceeds and capital contributions from ~~the CEO.~~ 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.

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,~~last year, RMB ~~continued to appreciate~~depreciated against the U.S. dollar. As of September 30, ~~2022,~~2023, the market foreign exchange rate was RMB ~~7.116~~7.28 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 six months ended September 30, ~~2022~~2023 and ~~2021~~2022 was approximately ~~$0.2~~$0.09 million and ~~$(0.03)~~$0.2 million respectively.

We have no off-balance sheet arrangements (as that term is defined in Item 303(a)(4)(ii) of Regulation S-K) as of September 30, ~~2022~~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.

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~~September 30, ~~2022.~~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.

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.

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.

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.

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

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.

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

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

Large accelerated filer ☐	Accelerated filer ☐

Non-accelerated filer ☒	Smaller reporting company ☒

Emerging growth ☒

	PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	~~F-3~~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	16

Item 4.	Controls and Procedures	16

	PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	17

Item 1A.	Risk Factors	17

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17

Item 3.	Defaults Upon Senior Securities	17

Item 4.	Mine Safety Disclosures	17

Item 5.	Other Information	17

Item 6.	Exhibits	17

Condensed Consolidated Balance sheets as of September 30, ~~2022~~2023 (unaudited) and March 31, ~~2022 (unaudited)~~2023 (audited)	~~F-4~~F-2
Condensed Consolidated Statements of Income and Comprehensive Income for the ~~Six~~three and six months ended ~~June~~September 30, 2023 and 2022 ~~and 2021~~ (unaudited)	~~F-5~~F-3
Condensed Consolidated Statements of Changes in Equity for the three and six months ended September 30, 2023 and 2022 ~~and 2021~~ (unaudited)	~~F-6~~F-4
Condensed Consolidated Statements of Cash Flows for the six months ended September 30, 2023 and 2022 ~~and 2021~~ (unaudited)	~~F-7~~F-5
Notes to Condensed Consolidated Financial Statements for the three and six months ended September 30, 2023 and 2022 ~~and 2021~~ (unaudited)	~~F-8~~F-6 – ~~F-16~~F-15

	September 5, 2023
Cash in bank	$	226,162
Other receivables		705,510
Fixed assets, net		58,493
Long-term prepayments		192,391
Advance from customers		(89,616	)
Payroll payable		(19,239	)
Other tax payable		(4,633	)
Other payables		(629,602	)
Net book value at acquisition date		439,466
Gain on bargain purchase		(996	)
Purchase price	$	438,470

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 ~~Shenzhen Xin Kuai Jie Transportation Co., Ltd (“XKJ”), a wholly subsidiary of our Company~~XKJ
Dewu Huang		A legal representative of ~~Shantou Yi Bai Yi Garments Co., Ltd (“YBY”), a wholly-owned subsidiary of our Company~~YBY
Jinlong Huang		~~A spouse~~Management of ~~legal representative of Dongguan Heng Sheng Wei Garments Co., Ltd (“HSW”), a wholly owned subsidiary of our Company~~
~~Huilin Chen~~		~~A legal representative of Shenzhen Yingxi Peng Fa Logistic Co., Ltd (“PF”), a wholly-owned subsidiary of our Company~~HSW

Related party borrowings		September 30, 2022		March 31, 2022
Zhida Hong (1)	$	1,334,995	$	3,297,951
Huilin Chen		702		-
Bihua Yang (2)		18,433		31,738
Dewu Huang		1,012,052		212,290
Jinlong Huang		102,945		153,010
	$	2,469,127	$	3,694,989

	(1)	Being ~~interest free loan as financial support from~~cash advance to Zhida Hong to ~~daily operation~~pay for new brand development fee of the Company.

	(2)	Being ~~financial support from Bihua Yang for XKJ’s daily operation.~~

	~~(3)~~	~~Being~~ interest free ~~advanced~~ loan as financial support from Dewu Huang to pay for ~~YBY’s~~ daily ~~operation.~~operating expenditures of YBY.

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

	(b)	Logistics services. Providing logistic services; and

	(c)	~~Epidemic prevention supplies~~~~. Including manufacturing, distribution and trading of epidemic prevention supplies.~~

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

	September 30, 2022	March 31, 2022
Long-Lived Assets
China	5,028,480	7,397,932

	●	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.

	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
	$	15,000,000

	(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.

	Three Months Ended September 30,										Changes in 2022
	2022					2021					compared to 2021
	(In U.S. dollars, except for percentages)
Revenue	$	2,144,019		100.0	%	$	2,757,832		100	%	$	(613,813	)	(22.3	)%
Cost of revenues		(1,578,858	)	(73.6	)%		(2,287,407	)	(82.9	)%		708,549		31.0	%
Gross profit		565,161		26.4	%		470,425		17.1	%		94,736		20.1	%
Operating expenses		(495,009	)	(23.1	)%		(508,688	)	(18.4	)%		13,679		(2.7	)%
Income from operations		70,152		3.3	%		(38,263	)	(1.4	)%		108.415		(283.3	)%
Other income, net		22,973		1.1	%		75,764		2.7	%		(52,791	)	(69.7	)%
Net finance cost		(447	)	(0.0	)%		(521	)	(0.0	)%		74		(14.2	)%
Income tax expense		(9,461	)	(0.4	)%		(4,959	)	(0.2	)%		(4,502	)	90.8	%
Net income (loss)	$	83,217		3.9	%	$	32,021		1.2	%	$	51,196		159.9	%

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)~~

Addentax Group Corp.

Date: November 14, ~~2022~~2023	By:	/s/ Hong Zhida
		Hong Zhida
		President, Chief Executive Officer and Director,
		(Principal Executive Officer)

Date: November 14, ~~2022~~2023	By:	/s/ Huang Chao
		Huang Chao
		Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)