Addentax(US:ATXG)2026-02-13 14:20Company Overview - Addentax Group Corp. operates primarily through its subsidiaries in China, focusing on garment manufacturing, logistics services, and property management[95]. - Addentax Group Corp. is listed on the Nasdaq Capital Market under the symbol "ATXG"[95]. Logistics Services - The logistics services segment currently covers 44 cities across 10 provinces and 2 municipalities in China, with plans to develop 20 additional logistics routes in 2026[107]. - Revenue from logistics services contributed approximately $971,059, or 99.5% of total revenue for the three months ended December 31, 2025, compared to $831,103, or 98.4% in 2024[136]. - Income from operations in the logistics services segment increased to $141,921 for the three months ended December 31, 2025, compared to $8,707 in 2024[148]. - The gross profit margin for logistics services improved to 30.3% in the three months ended December 31, 2025, from 22.2% in 2024[144]. - Revenue from the logistics services business contributed approximately $2.6 million, or 98.6% of total revenue for the nine months ended December 31, 2025, up from $2.3 million, or 70.2%, in 2024[157]. Garment Manufacturing - The garment manufacturing business aims to expand its customer base and improve profit margins, emphasizing quality and timely delivery[106]. - The company’s garment manufacturing operations are conducted through three wholly-owned subsidiaries located in Guangdong province, China[101]. - The garment manufacturing business reported a gross profit of $290 for the three months ended December 31, 2025, down from $5,620 in 2024, with a gross profit margin decline to 6.1%[143]. - The company’s garment manufacturing business generated a gross profit of $10,304 for the nine months ended December 31, 2025, down from $50,562 in 2024, with a gross margin increase to 27.4% from 18.8% due to external procurement[164]. Financial Performance - Total revenue for the three months ended December 31, 2025, increased by approximately $110,947, or 12.8%, to $975,823 compared to $864,876 in the same period of 2024[133]. - Gross profit for the three months ended December 31, 2025, was $294,913, representing a 55.1% increase from $190,167 in 2024[145]. - Loss from operations decreased to $68,793 for the three months ended December 31, 2025, from $150,035 in 2024, reflecting a 54.1% improvement[133]. - Total revenue for the nine months ended December 31, 2025, increased by $71,985, or 2.8%, to $2,622,869, driven primarily by a $0.30 million increase in logistics services revenue[155]. - The gross profit for the nine months ended December 31, 2025, was $710,474, representing a gross margin of 27.1%, down from $925,725 and 36.3% in 2024, primarily due to increased costs and competitive pricing strategies[165]. - Loss from operations for the nine months ended December 31, 2025, was $873,516, a significant increase of 78.1% compared to a loss of $490,574 in 2024[171]. - The company incurred a net loss of approximately $4.2 million for the three months ended December 31, 2025, compared to a net loss of approximately $1.1 million for the same period in 2024, with a basic and diluted loss per share of $0.45 and $0.19, respectively[152]. - The company incurred a net loss of approximately $4.7 million for the nine months ended December 31, 2025, compared to a net loss of $3.0 million for the same period in 2024, with basic and diluted loss per share of $0.50 and $0.53, respectively[175]. Expenses and Taxation - General and administrative expenses increased by approximately 13.9% to $354,597 for the three months ended December 31, 2025, from $311,383 in 2024[147]. - Operating expenses increased by 11.8% to $1,583,990 for the nine months ended December 31, 2025, compared to $1,416,299 in 2024[166]. - The income tax expense for the three months ended December 31, 2025, was $248, significantly lower than $3,116 in 2024[149]. - Income tax expense for the nine months ended December 31, 2025, was $1,082, a decrease from $4,643 in 2024, as the company had no taxable income in the PRC[172]. Cash Flow and Financial Position - Net cash used in operating activities was approximately $1.1 million for the nine months ended December 31, 2025, a decrease of approximately $1.9 million compared to cash provided by operating activities of $0.8 million in 2024[176]. - Net cash used in investing activities was approximately $0.28 million for the nine months ended December 31, 2025, which is $0.13 million more than the $0.15 million used in 2024[177]. - Net cash provided by financing activities was approximately $1.3 million for the nine months ended December 31, 2025, compared to cash used of $1.0 million in 2024, reflecting a difference of approximately $0.34 million[178]. - As of December 31, 2025, the company had cash on hand of approximately $0.2 million, total current assets of approximately $27.9 million, and current liabilities of approximately $1.3 million[179]. - The company expects to fund operations through revenue generated by its business, proceeds from prior fundraising activities, and capital contributions from its CEO[179]. Economic Environment - Economic uncertainty in China has led to increased pricing pressure, impacting sales growth and operating margins[115]. - The company has experienced no significant impact on the timeliness of receivable collections despite economic challenges[115]. - The logistics services business is more vulnerable to shipping delays during the Chinese New Year due to traffic and port congestion[110]. Other Financial Information - The company disposed of its property management subsidiary, HX, in July 2025, resulting in an income of $6,857 from the disposal[105]. - As of December 31, 2025, the company has a total of 56,238 square meters of floor space for property management[104]. - The company reported a fair value loss of $4,140,772 for the nine months ended December 31, 2025, compared to a loss of $1,045,448 in 2024, reflecting a 296.1% increase[154]. - The foreign currency translation loss for the nine months ended December 31, 2025, was approximately $(0.12) million, compared to a gain of $0.06 million in 2024[181]. - The company has no off-balance sheet arrangements that could affect its financial condition as of December 31, 2025[182].