UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock ATXG Nasdaq Capital Markets FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: June 30, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to _________________ Commission File ...

Garment Manufacturing Business - The company's garment manufacturing business operates through five wholly owned subsidiaries located in Guangdong province, China, with sufficient production capacity and skilled workers to meet high-quality control standards and timely delivery requirements[245] - The company's garment manufacturing segment aims to expand its customer base and improve profitability, leveraging its emphasis on quality and timely delivery[249] - For new garment manufacturing customers, orders require advances or deposits, while long-term customers receive payment terms of 30 to 180 days post-delivery[251] - Revenue from the garment manufacturing business decreased by $2.3 million (93.0%) in 2023, contributing only 2.2% of total revenue, down from 19.9% in 2022[268][271] - Raw materials cost for the garment manufacturing business decreased to 16.0% of revenue in 2023, down from 69.1% in 2022, due to reduced manufacturing during factory renovation[272] Logistics Services Business - The logistics business covers 86 cities in 11 provinces and 3 municipalities in China, with plans to develop 20 additional logistics routes in existing serving cities by 2024[246][249] - The logistics services segment plans to establish an efficient nationwide delivery and courier network in China, with current operations outsourced to contractors to maximize capacity and reduce costs[246][249] - Logistics services payments are collected 30 to 90 days after package receipt registration[251] - Logistics services revenue increased by $0.7 million (13.3%) in 2023, contributing 58.2% of total revenue, up from 42.0% in 2022[269] - Subcontracting fees for the logistics business decreased by $1.2 million (53.0%) in 2023, accounting for 23.2% of logistics revenue, down from 42.9% in 2022[274] - Gross profit margin for the logistics services business improved to 24.2% in 2023, up from 21.2% in 2022, primarily due to reduced subcontracting fees[277] - The logistics services segment generated income from operations of $0.28 million in FY2023, up from $0.24 million in FY2022[284] Property Management and Subleasing Business - The property management and subleasing business was restructured in February 2023, with the disposal of subsidiary DY to an independent third party at fair value, while retaining its business operations, customers, and suppliers[247][249] - Property management fees are collected monthly in advance[252] - Property management and subleasing revenue decreased by $1.2 million (27.4%) in 2023, contributing 39.0% of total revenue, down from 33.6% in 2022[269] - The property management and subleasing business reported income from operations of $0.27 million in FY2023, compared to $0.1 million in FY2022[284] Financial Performance and Revenue Recognition - Total revenue for the year ended March 31, 2023 decreased by $4.7 million (37.4%) compared to the previous year, primarily due to a decline in the garment manufacturing business[268] - Gross profit decreased by $222,193 (10.8%) in 2023, with the gross profit margin declining from 16.3% to 23.2%[271] - Operating expenses increased by $183,717 (8.7%) in 2023, with general and administrative expenses rising by $311,199 (16.3%)[279] - Net income increased significantly by $1,241,659 (1,591.9%) in 2023, driven by a fair value gain of $2,983,538[267] - General and administrative expenses increased by 16.3% to $2.2 million in FY2023 from $1.9 million in FY2022[283] - Net profit for FY2023 was $1.3 million, compared to $0.08 million in FY2022, with basic and diluted earnings per share of $0.04 and $0.00, respectively[287] - The company's revenue recognition follows a five-step model under ASC 606, recognizing revenue when control of goods or services is transferred to customers, typically upon delivery[257][259] Cash Flow and Financial Position - Net cash provided by operating activities decreased by $2.7 million to $(1,569,159) in FY2023, primarily due to lower net profit adjustments and cash outflows from operating assets and liabilities[290] - Net cash used in investing activities increased by $21.0 million to $(21,168,153) in FY2023, driven by $17.5 million in debt securities purchases and $2.5 million in long-term loan payments[291] - Net cash provided by financing activities increased by $23.2 million to $21,845,838 in FY2023, mainly due to $22.7 million from the IPO and $15.0 million from Notes and warrants issuance[292] - Cash on hand as of March 31, 2023, was $0.6 million, with restricted cash of $14.8 million, total current assets of $37.8 million, and current liabilities of $3.5 million[293] Economic and Market Conditions - The company faces economic uncertainty in China, with potential impacts on sales growth, operating margins, cash position, and accounts receivable collection due to pricing pressure and tightened credit conditions[253] Seasonal Business Trends - The company's business is seasonal, with higher garment sales in the second and third quarters and higher logistics revenue in the third and fourth quarters[250] Foreign Currency and Off-Balance Sheet Arrangements - Foreign currency translation gain for FY2023 was $0.2 million, compared to a loss of $(0.1) million in FY2022[294] - The company has no off-balance sheet arrangements as of March 31, 2023[295]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock ATXG Nasdaq Capital Market FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: December 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to _________________ Commission Fi ...

```markdown PART I – FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) Unaudited financial statements for the nine months ended December 31, 2021, show net income from cost reductions, despite asset declines and substantial going concern doubt [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Summary (as of Dec 31, 2021 vs. Mar 31, 2021) | Metric | December 31, 2021 | March 31, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | $4,827,884 | $7,997,482 | | **Total Assets** | $13,014,718 | $18,424,084 | | **Total Current Liabilities** | $9,430,568 | $12,428,415 | | **Total Liabilities** | $13,036,526 | $18,505,582 | | **Total Equity (Deficit)** | ($21,808) | ($81,498) | - The company's financial position shows a decrease in both **total assets** and **total liabilities** from March 31, 2021, to December 31, 2021 Notably, **cash and cash equivalents** decreased from **$1.85 million** to **$0.51 million**[10](index=10&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Statement of Operations Summary (Nine months ended Dec 31) | Metric | 2021 | 2020 | | :--- | :--- | :--- | | **Revenues** | $9,835,733 | $21,014,064 | | **Cost of Revenues** | ($8,314,149) | ($22,776,087) | | **Gross Profit (Loss)** | $1,521,584 | ($1,762,023) | | **Income (Loss) from Operations** | $10,761 | ($3,593,015) | | **Net Income (Loss)** | $122,587 | ($3,560,206) | | **Basic and Diluted EPS** | $0.00 | ($0.14) | - For the nine months ended December 31, 2021, the company's revenue decreased by over **50%** year-over-year However, a **significant reduction** in the **cost of revenues** led to a swing from a **gross loss** in 2020 to a **gross profit** in 2021, resulting in a **net income** of **$122,587** compared to a **net loss** of **$3.56 million** in the prior year[11](index=11&type=chunk)[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary (Nine months ended Dec 31) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | $383,825 | ($3,782,116) | | **Net cash used in investing activities** | ($176,268) | ($1,094,344) | | **Net cash (used in) provided by financing activities** | ($1,543,573) | $4,718,213 | | **Net (Decrease) Increase in Cash** | ($1,336,016) | ($158,247) | - **Cash flow from operations** turned positive in the nine months ended Dec 31, 2021, a **significant improvement** from a large cash use in the prior year However, **financing activities** resulted in a **net cash outflow** of **$1.54 million**, a reversal from a **large inflow** in 2020, contributing to an overall decrease in **cash and cash equivalents**[18](index=18&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - The company operates in four segments: garment manufacturing, logistics services, property leasing, and **epidemic prevention supplies**, primarily in the PRC[21](index=21&type=chunk)[51](index=51&type=chunk) - There is **substantial doubt** about the company's ability to continue as a **going concern** due to a **net current liability** of **$4.6 million** and a **total equity deficit** of **$21,808** as of December 31, 2021 The company is dependent on financial support from its CEO[26](index=26&type=chunk)[28](index=28&type=chunk) - As of December 31, 2021, the company had **significant related party borrowings** of **$3.54 million**, with **$3.21 million** due to the CEO, Zhida Hong These borrowings are **unsecured**, **non-interest bearing**, and **repayable on demand**[34](index=34&type=chunk)[35](index=35&type=chunk) Segment Revenue (Nine months ended Dec 31, 2021) | Segment | Revenue from External Customers | | :--- | :--- | | Garment manufacturing | $2,488,173 | | Logistics Services | $4,144,604 | | Property management and leasing | $3,202,956 | | Epidemic prevention supplies | $0 | | **Total** | **$9,835,733** | - For the nine months ended December 31, 2021, one customer in the garment segment accounted for **24.8%** of total revenue The company also has **high supplier concentration** in its segments[66](index=66&type=chunk)[68](index=68&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **53.2% revenue decrease** to discontinued epidemic supplies, offset by other segment growth, resulting in **net income** despite lower revenue, but highlights ongoing **going concern uncertainties** [Business Overview](index=20&type=section&id=Business%20Overview) - The company operates through four business segments: Garment manufacturing, Logistics services, Property management and subleasing, and **Epidemic prevention supplies**[73](index=73&type=chunk) - Business objectives include expanding the customer base in garment manufacturing, establishing a nationwide delivery network for logistics, and increasing the occupancy rate to over **70%** for the property management business[78](index=78&type=chunk)[79](index=79&type=chunk) [Results of Operations for the three months ended December 31, 2021 and 2020](index=23&type=section&id=Results%20of%20Operations%20for%20the%20three%20months%20ended%20December%2031%2C%202021%20and%202020) Q3 Performance Summary (Three months ended Dec 31) | Metric | 2021 | 2020 | Change (%) | | :--- | :--- | :--- | :--- | | **Revenue** | $2,791,470 | $3,411,552 | (18.2)% | | **Gross Profit** | $467,754 | $461,428 | 1.4% | | **Loss from Operations** | ($27,676) | ($288,526) | 90.4% | | **Net Income (Loss)** | $11,619 | ($303,581) | 103.8% | - The **18.2% decrease** in Q3 2021 revenue was mainly due to a **$2.3 million** drop in the garment manufacturing business because of **factory re-decoration** This was partially offset by growth in logistics and property management services[98](index=98&type=chunk)[100](index=100&type=chunk) - The company shifted from a **net loss** of **$0.3 million** in Q3 2020 to a **net income** of **$11,619** in Q3 2021, driven by a **significant reduction** in **operating expenses**, particularly **selling expenses** which fell by **80.2%**[98](index=98&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) [Results of Operations for the nine months ended December 31, 2021 and 2020](index=30&type=section&id=Results%20of%20Operations%20for%20the%20nine%20months%20ended%20December%2031%2C%202021%20and%202020) Nine-Month Performance Summary (ended Dec 31) | Metric | 2021 | 2020 | Change (%) | | :--- | :--- | :--- | :--- | | **Revenue** | $9,835,733 | $21,014,064 | (53.2)% | | **Gross Profit (Loss)** | $1,521,584 | ($1,762,023) | (186.4)% | | **Income (Loss) from Operations** | $10,761 | ($3,593,015) | 100.3% | | **Net Income (Loss)** | $122,587 | ($3,560,206) | 103.4% | - The **significant 53.2% revenue decrease** for the nine-month period was primarily because there was **no revenue** from the **epidemic prevention supplies business**, which had contributed **$11.9 million** (**56.5%** of total) in the same period of 2020[124](index=124&type=chunk)[127](index=127&type=chunk) - Despite the **revenue drop**, the company turned a **$3.6 million net loss** in the first nine months of 2020 into a **$0.1 million net income** in 2021 This was driven by the elimination of the high-cost, loss-making epidemic supplies business and **improved profitability** in logistics and property management[123](index=123&type=chunk)[140](index=140&type=chunk)[143](index=143&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=34&type=section&id=Financial%20Condition%2C%20Liquidity%20and%20Capital%20Resources) - As of December 31, 2021, the company had approximately **$0.5 million** in cash, **$4.8 million** in **total current assets**, and **$9.5 million** in **current liabilities**, indicating a **significant working capital deficit**[150](index=150&type=chunk) - The company's financial condition raises **substantial doubt** about its ability to continue as a **going concern** It relies on **cash flow from operations** and **capital contributions** from the CEO to finance operations and meet obligations[150](index=150&type=chunk) - **Net cash from financing activities** saw a **$6.2 million negative swing**, from a **$4.7 million inflow** in 2020 to a **$1.5 million outflow** in 2021, mainly because there were no proceeds from stock issuance and an increase in net repayment of **related party borrowings**[145](index=145&type=chunk)[149](index=149&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable as the company qualifies as a smaller reporting company - The company is **not required** to provide **quantitative and qualitative disclosures about market risk** because it is a smaller reporting company[155](index=155&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective as of December 31, 2021, due to **material weaknesses** in **internal financial reporting controls**, with no material changes reported - An evaluation by management concluded that the company's **disclosure controls and procedures** were **not effective** as of December 31, 2021[157](index=157&type=chunk) - There were no changes in the company's **internal control over financial reporting** during the quarter that materially affected, or are reasonably likely to materially affect, these controls[158](index=158&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any legal proceedings that would materially affect its business, financial condition, or operations - The company reports **no material legal proceedings**[160](index=160&type=chunk) [Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, Addentax Group Corp. is not required to provide information for this item - Disclosure of **risk factors** is **not required** as the company is a smaller reporting company[161](index=161&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - **None reported**[161](index=161&type=chunk) [Defaults Upon Senior Securities](index=38&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - **None reported**[161](index=161&type=chunk) [Other Information](index=38&type=section&id=Item%205.%20Other%20Information) There is no other information required to be disclosed that was not previously reported - **No other information to disclose**[161](index=161&type=chunk) [Exhibits](index=38&type=section&id=Item%206.%20Exhibits) The report includes certifications by the Principal Executive and Financial Officers, along with Interactive Data Files (XBRL) - Exhibits filed with this report include Section 302 and 906 **certifications** and the **Interactive Data File (XBRL)**[162](index=162&type=chunk) ```