UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

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

For the fiscal year ended March 31, 2026

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

For the transition period from __________ to __________

Commission file number: 001-41478

ADDENTAX GROUP CORP.

(Exact name of registrant issuer as specified in its charter)

Kingkey 100, Block A, Room 4805, Luohu District, Shenzhen City, China 518000

Address of principal executive offices, including zip code

+ (86) 755 8233 0336

Registrant’s phone number, including area code

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

Securities registered pursuant to Section 12(g) of the Securities Exchange Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

☐ Yes ☒ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

☐ Yes ☒ No

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 for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ YES ☐ NO

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

☒ YES ☐ NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☒ No

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.

As of September 30, 2025, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the common stock held by non-affiliates of the registrant was approximately $11.3 million,   based on the closing price for the registrant’s common stock as quoted on the Nasdaq Capital Market on that date. Shares of common stock held by each director, each officer and each person who owns 10% or more of the outstanding common stock have been excluded from this calculation in that such persons may be deemed to be affiliates. The determination of affiliate status is not necessarily conclusive.

The registrant had 1,031,435 shares of its common stock outstanding as of June 29, 2026.  

DOCUMENTS INCORPORATED BY REFERENCE

No documents are incorporated by reference.

TABLE OF CONTENTS

Forward-looking statements

Statements made in this annual report on Form 10-K that are not historical or current facts are “forward-looking statements” made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the “Act”) and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “approximate” or “continue,” or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management’s best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

Financial information contained in this report and in our financial statements is stated in United States dollars and is prepared in accordance with United States generally accepted accounting principles.

Our shares of commons stock are shares of Addentax Group Corp. (“we,” “us,” “our,” the “Company” or “Addentax”), our Nevada holding company, which has no material operations of its own and conducts substantially all of its operations through the operating companies established in the People’s Republic of China, or the PRC, primarily Shenzhen Yingxi Industrial Chain Service Co., Ltd. (“YX”), our wholly owned subsidiary and its subsidiaries. We are not a Chinese operating company. We are a holding company and do not directly own any substantive business operations in China. Therefore, our investors will not directly hold any equity interests in our Chinese 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, par value $0.001 per share (“Common Stock”), including that it could cause the value of such securities to significantly decline or become worthless. For a detailed description of risks related to the holding corporate structure, see “Risk Factors—Risks Relating to Our Holding Company Structure” for detailed discussions.

Additionally, as we conduct substantially all of our operations through the operating companies established in the PRC, we are subject to certain legal and operational risks associated with our business operations in China. PRC laws and regulations governing our current business operations are sometimes vague and uncertain, and we face the risk that changes in the policies of the PRC government could have a significant impact upon the business we may be able to conduct in the PRC and the profitability of such business. Therefore, these risks arising from being associated with, based in or having substantially all of our operations through the operating companies established in China could cause the value of our securities to significantly decline or be worthless. Furthermore, these risks may result in a material change in our business operations or a complete hindrance of our ability to offer or continue to offer our securities to investors. Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. The business of our subsidiaries until the filing date of this annual report on Form 10-K is not subject to cybersecurity review with the Cyberspace Administration of China, or CAC, given that: (i) our products and services are offered not directly to individual users but through our institutional customers; (ii) we do not possess a large amount of personal information in our business operations; and (iii) data processed in our business does not have a bearing on national security and thus may not be classified as core or important data by the authorities. Further, we believe our newly established companies and our business plan will not change the above conclusion. In addition, based on our revenues for the most recent accounting year as provided by us and audited by HML PLT Pan-China Singapore PAC, we are not currently subject to merger control review by China’s anti-monopoly enforcement authority in connection with our existing corporate structure or operations. We also do not currently expect to engage in any transaction that would require a merger control filing under applicable PRC anti-monopoly laws and regulations. Currently, these statements and regulatory actions have had no impact on our daily business operation, our ability to accept foreign investments or our ability to list our securities on an U.S. or other foreign exchange. As of the date of this annual report, no effective laws or regulations in the PRC explicitly require us to seek approval from the China Securities Regulatory Commission (the “CSRC”) or any other PRC governmental authorities for our overseas listing, nor has our company or any of our subsidiaries received any inquiry, notice, warning or sanctions regarding our overseas listing from the CSRC or any other PRC governmental authorities. However, since these statements and regulatory actions are new, it is highly uncertain how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our daily business operation, the ability to accept foreign investments and list our securities on an U.S. or other foreign exchange. See “Risk Factors” beginning on page 17 for a discussion of these legal and operational risks and other information that should be considered before making a decision to purchase our Common Stock. 

As a holding company, our ability to pay dividends to our shareholders and to service any debt we may incur may depend upon dividends paid by our PRC Subsidiaries. Current PRC regulations permit our PRC Subsidiaries to pay dividends to us through Yingxi Industrial Chain Investment Co., Ltd. (“Yingxi HK”), our intermediate holding subsidiary in Hong Kong, only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our PRC Subsidiaries is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. As of the date of this annual report, we have had no transactions that involved the transfer of cash or assets throughout our corporate structure. The PRC Subsidiaries have not transferred cash or other assets to Addentax, including by way of dividends.  Addentax does not currently plan or anticipate transferring cash or other assets from our operations in China to any non-Chinese entity. As of the date of this annual report, no transfers, dividends, or distributions have been made to our investors.  

Trading in our securities may be prohibited under the Holding Foreign Companies Accountable Act, or the HFCAA, if the Public Company Accounting Oversight Board (United States) (the “PCAOB”) determines that it cannot inspect or investigate completely our auditor. Pursuant to the HFCAA, the PCAOB issued a Determination Report on December 16, 2021 which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (1) mainland China of the People’s Republic of China because of a position taken by one or more authorities in mainland China; and (2) Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in Hong Kong. On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong completely in 2022. The PCAOB vacated its previous 2021 determination that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. The PCAOB is continuing to demand complete access in mainland China and Hong Kong moving forward. The PCAOB has indicated that it will act immediately to consider the need to issue new determinations with the HFCAA, if needed. If the PCAOB in the future again determines that it is unable to inspect and investigate completely auditors in mainland China and Hong Kong, then companies audited by those auditors would be subject to a trading prohibition on U.S. markets pursuant to the Holding Foreign Companies Accountable Act and the Consolidated Appropriations Act. Our auditor, HML PLT, is an independent registered public accounting firm with the PCAOB, and as an auditor of publicly traded companies in the U.S., is subject to laws in the U.S. pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. HML PLT is based in Malaysia and there are no limitations in Malaysia on PCAOB inspections.   Should the PCAOB be unable to fully conduct an inspection of our auditor’s work papers in Malaysia, it will make it difficult to evaluate the effectiveness of our auditor’s audit procedures or equity control procedures. Investors may consequently lose confidence in our reported financial information and procedures or quality of the financial statements, which would adversely affect us and our securities. On December 23, 2022, the Accelerating Holding Foreign Companies Accountable Act, or the AHFCAA was enacted, which amended the HFCAA by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three and such act was signed into law on December 29, 2022, thus reducing the time before your securities may be prohibited from trading or delisted. The delisting or the cessation of trading of our Common Stock, or the threat of their being delisted or prohibited from being traded, may materially and adversely affect the value of your investment. The PCAOB continues to demand complete access in mainland China and Hong Kong moving forward and has resumed regular inspections since March 2023. Moreover, if trading in our securities is prohibited under the HFCAA in the future because the PCAOB determines that it cannot inspect or fully investigate our auditor at such future time, an exchange may determine to delist our securities.

PART I

Item 1. Business

Addentax Group Corp. was incorporated in the State of Nevada on October 28, 2014. We were originally incorporated to produce images on multiple surfaces, such as glass, leather, plastic, ceramic, textile, and others using a 3D sublimation vacuum heat transfer machine. We no longer pursue opportunities related to 3D printing positioning.

On December 28, 2016, we entered into a Sale and Purchase Agreement (“SPA”) with Yingxi Industrial Chain Group Co., Ltd. (“YICG”), a company incorporated under the laws of the Republic of Seychelles and principally engaged in garment manufacture, pursuant to which we agreed to acquire 100% of the equity interest in YICG in exchange for shares of the Company’s common stock. The acquisition was completed on September 25, 2017. Following the completion of the SPA, YICG became our wholly owned subsidiary, and YICG’s business became our business.

Unless the context otherwise requires, all references in this annual report on Form 10-K to “Addentax” refer to Addentax Group Corp., a holding company, and references to “we,” “us,” “our,” the “Registrant”, the “Company,” or “our company” refer to Addentax and/or its consolidated subsidiaries. Addentax Group Corp., our Nevada holding company, is the entity in which our investors are investing.

Corporate Structure

The following diagram illustrates our corporate structure as of the date of this annual report:

Note:

(1) The Company has initiated the process of divesting its subsidiary, Shantou Yi Bai Yi Garment Co., Ltd. (“YBY”). The Company no longer exercises control over YBY and, accordingly, has excluded YBY from its consolidated financial statements since July 2024. Although the Company remains the registered shareholder of YBY, it intends to complete a formal divestiture to clarify legal ownership. 

Our subsidiaries include (i) Yingxi Industrial Chain Group Co., Ltd., a Republic of Seychelles company (“YICG”); (ii) Yingxi Industrial Chain Investment Co., Ltd., a Hong Kong company (“Yingxi HK”); (iii) Yingxi Textile & Garments Co., Ltd., a PRC company; (iv) ShenzhenYingxi 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) Shenzhen Yingxi Peng Fa Logistic Co., Ltd., a PRC company (“PF”); (viii) Shenzhen Xin Kuai Jie Transportation Co., Ltd, a PRC company (“XKJ”) and (xi) Keemo Fashion Group Limited, a Nevada corporation (“KMFG”), and its subsidiaries. KMFG’s subsidiaries include GW Reader Holding Limited, Willing Read Culture Technology Co., Limited and GW Reader Sdn. Bhd.

“PRC Subsidiaries” refers to, collectively, YX, HSW, YS, PF and XKJ.

“WFOE” refers to Yingxi Textile & Garments Co., Ltd or “QYTG”, a wholly foreign-owned enterprise in China, which is indirectly wholly owned by Addentax Group Corp.

Effective July 2025, Shenzhen Yingxi Industrial Chain Services Co., Ltd, previously known as Shenzhen Qianhai Yingxi Industrial Chain Services Co., Ltd, changed its name to Shenzhen Yingxi Industrial Chain Services Co., Ltd due to a relocation of its registered address. The name change did not result in any material change to the subsidiary’s operations, financial position, or results.

Effective August 2025, Yingxi Textile & Garments Co., Ltd, previously known as Qianhai Yingxi Textile & Garments Co., Ltd, changed its name to Yingxi Textile & Garments Co., Ltd due to a relocation of its registered address. The name change did not result in any material change to the subsidiary’s operations, financial position, or results.

We have a fiscal year-end of March 31. The business office is located at Kingkey 100, Block A, Room 4805, Luohu District, Shenzhen City, China 518000. Our telephone number is +(86) 755 8233 0336.

Current Business

We are a Nevada holding company with no material operations of our own. We conduct substantially all of our operations through our operating companies established in the PRC, primarily YX, our wholly-owned subsidiary and its subsidiaries. We are not a Chinese operating company. We are a holding company and do not directly own any substantive business operations in China. Therefore, our investors will not directly hold any equity interests in our operating companies. Our holding company structure involves unique risks to investors. Chinese regulatory authorities could disallow our operating structure, which would likely result in a material change in our operations and/or the value of our Common Stock, including that it could cause the value of such securities to significantly decline or become worthless. Our holding company, Addentax Group Corp., is listed on the Nasdaq Capital Market under the symbol of “ATXG”. During the fiscal year ended March 31, 2026, our continuing operations primarily consisted of garment manufacturing, logistics services and consulting services.

Our garment manufacturing business consists of sales made principally to wholesalers located in the PRC. We have our own manufacturing facilities, with sufficient production capacity and skilled workers on production lines to ensure that we meet our high quality control standards and delivery requirements for our customers. We conduct our garment manufacturing operations through two wholly-owned subsidiaries, namely YX and YS, which are located in Guangdong province, China.

Our logistics business consists of delivery and courier services covering 45 cities in 10 provinces and 2 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 two wholly-owned subsidiaries, namely XKJ and PF, which are located in Guangdong province, China.

We provide business consulting and coordination services to customers seeking overseas wealth planning, insurance-related information and related cross-border service support. Our services primarily include customer consultation, appointment coordination, referral and liaison with third-party insurance brokers or other service providers, and related administrative support. We conduct our consulting service business through our wholly owned subsidiary, Yingxi HK, which is located in Hong Kong, China.

On March 30, 2026, we completed the acquisition of Keemo Fashion Group Limited (“KMFG”), a Nevada corporation with headquarters in Shenzhen, China. KMFG operates two core business segments: (i) an apparel and garment trading business focused on the wholesale distribution of men’s and women’s apparel to distributors primarily in China, sourcing directly from manufacturers without maintaining its own production facilities; and (ii) a digital publishing business conducted through its wholly owned subsidiary, GW Reader Sdn. Bhd. in Malaysia, which operates a mobile-based online fiction platform utilizing a pay-per-chapter microtransaction model for global readers. As of March 31, 2026, KMFG’s revenue contribution was not significant, and management does not currently present KMFG as a separate business line or reportable segment. Management will continue to monitor KMFG’s operations, revenue contribution and business development and will reassess the related disclosure and segment presentation as necessary in future periods.

Dispositions of Subsidiaries and Discontinued Operations

During the fiscal year ended March 31, 2026, we disposed of Dongguan Aotesi Garments Co., Ltd., a PRC company (“AOT”), and Dongguan Hongxiang Commercial Co., Ltd., a PRC company (“HX”). AOT was previously engaged in the garment manufacturing business and was disposed of to the local management of AOT on May 6, 2025. After the disposition, AOT became a third party to the Company. The Company carries on the garment manufacturing business through its remaining subsidiaries, and the disposition of AOT did not qualify as discontinued operations. HX was previously engaged in the property management and subleasing business and was disposed of to the local management of HX on July 1, 2025. After the disposition, HX became a third party to the Company. Following the disposition, the Company no longer conducts the property management and subleasing business through HX or any other subsidiary. The property management and subleasing business has been classified as discontinued operations in the Company’s consolidated financial statements. AOT and HX were no longer subsidiaries of the Company as of March 31, 2026 and as of the date of this annual report.

Competitive Strengths

We believe we have the following competitive strengths:

Cost-effective production. We have adopted a vertical integration production process. We produce garments in our own production facilities and employ our in-house transport teams to deliver garments to our customers. This one-stop service optimizes production efficiency and saves costs by lowering the cost per unit, thereby achieving economies of scale.

Stringent quality control process. As of March 31, 2026, we had seven employees in the production department that are responsible for conducting our quality control process. We implement a stringent quality control process which monitors various stages of our garment manufacturing business, including sampling checks of semi-finished products and finished products. We prepare inspection reports to address the quality problems and make recommendations to improve the quality of our products. During final product inspection, we pay special attention to the measurements, workmanship, ironing and packaging of our products to help best ensure that the quality of our products comply with the specifications, standards and requirements of our customers.

Strong design capabilities. Our design team works closely with our customers to understand their needs and make recommendations to them. Our design team also conducts market research and attends industry exhibitions to understand the latest market trends. As of March 31, 2026, our design team consisted of two members.

Extensive delivery network. Our logistics business has nine routes and covers 45 cities in 10 provinces and 2 municipalities in the PRC.

Integrated cross-border service ecosystem. Our consulting services are designed around a broader ecosystem that combines identity planning, children’s education planning, global real estate resources, insurance-related coordination and wealth management planning. This integrated service model allows us to identify customer needs at an earlier stage and create cross-service customer stickiness.

Targeted access to high-net-worth customer groups. Our consulting services focus on mainland China and Hong Kong middle-to-high income families, customers seeking Hong Kong or overseas settlement, and cross-border business owners with global asset allocation needs. Through education and identity planning services, we seek to reach customers with stronger payment capability and cross-border service needs.

Experienced consulting team. Our business consulting management team includes personnel with years of insurance sales and service experience. The team has experience in customer communication, overseas insurance configuration, wealth management planning, education planning and related cross-border advisory scenarios.

Digital and private-domain operation capabilities. We use digital tools, including CRM tools, order management tools and plan preparation tools, to improve service efficiency. We also intend to use private-domain customer management, customer seminars and other customer engagement activities to maintain long-term customer relationships.

Business Strategies

Key elements of our business and growth strategies include the following:

Sales of raw materials. We intend to enter into exclusive agreements with textile and garment suppliers in Southeast China to be their exclusive agent and supply their textiles and garments to our customers. To execute this plan, we intend to set up several retailers for the sales of textiles and garments to retail customers and supply the textiles and garments exclusively to various high-end fashion brands.   We expect to continue supplier discussions, customer development and preliminary cooperation arrangements over the next 12 to 24 months. The implementation of this initiative will depend on market demand, supplier terms, customer requirements and the execution of definitive commercial arrangements.

Development of our own brands. We intend to develop our own brands that focus on fast fashion with teenagers being our primary target customers. We plan to adopt a low-cost strategy at the early stage and improve the quality of our products after increasing our market share. We have completed trademark registration for our own brand and are currently advancing early-stage brand development, product planning and preliminary marketing activities. We expect to continue developing our own brand strategy over the next 12 months, including product design, channel development and marketing initiatives. The timing and scale of any commercial launch will depend on market response, available operating resources and the development of suitable sales channels, including online platforms, cooperative retailers and other distribution channels.

Expand our delivery network. As of March 31, 2026, we provided logistics services to over 45 cities in 10 provinces and 2 municipalities in the PRC. We expect to develop 20 additional logistics routes in existing serving cities and improve the Company’s profits by the end of 2026.  

Develop international logistics services and warehousing services. We intend to develop international logistics services for customers located all over the world and international warehousing services.

Develop consulting services. We intend to develop our consulting services as an asset-light service business, focusing on overseas insurance configuration, wealth management planning, identity planning, education planning and related cross-border service coordination.

Consulting-driven transformation. In response to market and regulatory changes affecting insurance referral and commission arrangements, we intend to emphasize higher value-added consulting services rather than relying primarily on high upfront referral commissions. We intend to expand service-fee-based identity planning, education planning and related advisory services to diversify revenue sources.

Digital tools and private-domain customer management. We intend to improve consultant efficiency through digital tools, CRM systems and automated plan preparation tools. At the same time, we intend to maintain high-net-worth customer relationships through private-domain customer management, offline seminars, education-related activities and other customer engagement initiatives.

Develop integrated cross-border services. We intend to build a one-stop ecosystem combining identity planning, education planning, overseas property resources, insurance-related coordination and wealth management consulting, with the goal of increasing cross-service customer conversion and customer lifetime value.

Compliance-oriented business development. We intend to develop the consulting service line under a compliance-oriented approach, including premium collection controls, referral fee settlement controls, documentation review and internal approval procedures.

Our garment manufacturing business

We manufacture garments for various high-end fashion brands through our wholly-owned subsidiaries, YX and YS, which are located in Guangdong province, the PRC.

Operations

Our customer relationship team is responsible for cultivating and maintaining our relationship with customers. Our design team works closely with our customer relationship team to understand our customers’ needs and make recommendations to them based on their designs. Our fabric team leverages our experience in fabric sourcing as well as our understanding of fabric features to recommend the types of fabric to be used in our customers’ products. Our fabric team may also suggest alternative fabrics to our customers. Our fabric team works with our research and development team to understand fabric types and aims to identify different fabric we source and improve the quality and comfort of the fabric we produce. Our product and technical team are mainly responsible for development samples of products, preparing structural and production guidance of products as well as producing paper patterns for our garment production team. Upon order confirmation from our customers, our customer relationship team informs our fabric team to carry out raw material sourcing.

We source finished fabric and yarns from our suppliers for garment production. The procedures for fabric production are normally divided into the following stages: (i) spinning; (ii) weaving or knitting; (iii) dyeing or printing; and (iv) finishing. Generally, our fabric team requires four to six weeks to source raw materials from our suppliers.

Our garment production team is responsible for producing garments based on the raw materials we source. The major stages involved in garment production include: (i) paper patterning; (ii) fabric cutting; (iii) sewing; (iv) interim quality inspection; (v) trimming; (vi) washing; and (vii) ironing.

Seasonality

We generally receive more purchase orders during our second and third quarters and fewer manufacture orders during May and June.

Credit period

For our long-term and established customers with good payment track records, we generally provide payment terms between 30 to 180 days following the delivery of finished goods. For our new customers, we generally require advances or deposits to be made when placing orders.

Our logistics business

We pack products and provide logistics service to our customers through our wholly-owned subsidiaries, XKJ and PF which are located in Guangdong province, the PRC. Our in-house logistics teams deliver to approximately 10 provinces and 2 municipalities in the PRC. Where a customer is located in an area not covered by our delivery fleet or where our in-house logistics teams are fully engaged, we will outsource delivery to third-party contractors. We believe outsourcing allows us to maximize our delivery capacity and improve inventory flexibility while minimizing capital expenditures, such as shipping costs and the costs of additional drivers during low seasons.

Our logistics services

We provide comprehensive logistics services to our customers, which include storage, transportation, warehousing, handling, packaging and order processing. We also provide customs declaration and tax clearance services to our customers who export goods overseas.

Our network

We have 114 logistics points and they are located in 10 provinces and 2 municipalities which cover 45 cities in the PRC.

Our internal management

Our management in the logistics business is responsible for setting out business strategies and managing the daily operation. Specifically, they have regular meetings with different departments, conduct inspections and supervise the finance department, operation department and administration department.

Seasonality

We generally receive more delivery orders in our third and fourth quarters and are more vulnerable to shipping delays in the PRC during the Chinese New Year due to traffic and port congestion, border crossing delays and customs clearance issues.

Credit period

We generally require payments from the customers between 30 to 90 days following their acknowledgement of receipt of goods.

Our consulting services

Our consulting services are designed to provide customers with advisory, referral, coordination and administrative support in connection with overseas insurance configuration, wealth management planning, identity planning, education planning and related cross-border service needs. We do not underwrite insurance products, issue insurance policies, collect insurance premiums on behalf of insurance companies or assume insurance underwriting risk.

Operations

Our service process generally includes customer consultation, appointment arrangement, communication and coordination with third-party insurance brokers or other service providers based on customer needs, coordination of the application process, communication of underwriting and payment status information from the relevant insurance company or broker to the customer, and follow-up administrative support until the relevant policy or service arrangement becomes effective.

Network and digital tools

We use internal CRM tools, order management systems and automated plan preparation tools to improve service efficiency and customer management.

Seasonality

Management expects relatively stronger customer activity during June to September, October to December, holidays and weekends, while January to March is generally expected to be a traditional slower season due to the Chinese New Year period. Actual seasonality may vary based on customer demand, market conditions, regulatory developments and the availability of third-party service providers.

Credit period

The credit period for our consulting services is generally 30 to 60 days, depending on the service arrangement, customer relationship, settlement cycle with third-party service providers and internal credit review.

Collection policy

As a referral and consulting service provider, we do not directly collect customer insurance premiums. Premiums must be paid by customers directly to the relevant insurance company’s designated bank account or official payment gateway. Employees are prohibited from privately collecting customer cash or receiving customer premium payments into personal accounts. Referral fee payments, where applicable, are processed only after the Company receives the relevant settlement from the insurance broker or service provider and completes internal review of policy status, compliance and applicable commission calculations.

Customers and Suppliers

Customers

Our customer base is diverse. Our customers are as follows: (i) our customers in the garment manufacturing business are mainly garment wholesalers and retailers, (ii) our customers in the logistics business are mainly trading companies and logistic companies, and (iii) our customers in the consulting service business primarily include mainland China and Hong Kong middle-to-high income families, individuals considering Hong Kong or overseas settlement, customers with children’s education planning needs, and cross-border business owners seeking global asset allocation and wealth management-related consulting services. For the fiscal year ended March 31, 2026, four customers accounted for approximately 21.0%, approximately 13.7%, approximately 12.4% and approximately 10.6% of our total revenue, respectively. For the years ended March 31, 2025, two customers accounted for approximately 15.9% and approximately 15.5% of our total revenue, respectively. Other than the foregoing, no customer accounted for more than 10% of our total revenue during the periods presented.

Suppliers

We procure our garments through various textile companies in our garment manufacturing business. For our logistics business, we procure from packing companies and transportation companies. For our consulting service business, our third-party service providers and cooperation partners include insurance companies, insurance brokers, immigration law firms, overseas real estate developers, international schools and education consulting institutions. These parties may serve as service providers, referral partners or cross-industry cooperation partners. We act as a consulting, referral and coordination service provider and do not assume the role of insurer or underwriter. For the fiscal year ended March 31, 2026, two suppliers accounted for approximately 13.3% and approximately 10.5% of our total cost, respectively. For the fiscal year ended March 31, 2025, one supplier accounted for approximately 12.0% of our total cost. Other than the foregoing, no supplier accounted for more than 10% of our total costs during the periods presented.

Inventory

Garment manufacturing business. We maintain our raw materials in our storage facilities. We review our inventory levels in order to identify slow-moving materials and broken assortments.

Logistics business. Since we deliver products as soon as we receive orders from customers, we do not operate distribution centers and hence do not need to carry a significant amount of inventory.

Consulting services. Our consulting service line is a service business and does not hold physical inventory.

Intellectual Property

Our intellectual property portfolio consists primarily of trademarks, copyrighted logo designs and domain names used in connection with our business operations and corporate branding.

As of the date of this annual report, we, through our subsidiary YX, own 36 trademark registrations in the PRC. These registrations primarily protect the “Addentax” and “ATXG” brands, as well as related logo marks, across multiple classes of goods and services associated with our business activities. We, through our subsidiary YX, also own registered copyrights relating to certain logo designs and maintain domain names that support our business operations, marketing activities and online presence.

We seek to protect our intellectual property through trademark and copyright registrations, contractual arrangements and applicable intellectual property laws. We believe that our trademarks, logo designs and domain names support our brand recognition and business development efforts.

Competition

While the PRC remains one of the world’s largest clothing manufacturers with significant production capacity, management believes that increasing labor costs, excess production capacity in certain sectors, and trade barriers in certain jurisdictions have reduced the competitiveness of some PRC-based apparel manufacturers.

The principal competitive factors in the garment manufacturing market include:

The principal competitive factors in the logistics market include:

The principal competitive factors in the consulting service market include:

We believe we compete favorably with our competitors on the basis of our market position, customer base, service coordination capability and integrated cross-border service resources. However, the business consulting and insurance referral market is highly competitive and subject to changing regulatory and market conditions. We compete with traditional insurance brokers and agents, banks, wealth management institutions, family offices, tax planning firms, immigration and education consulting firms, technology platforms and other cross-border service providers.

Employees

As of March 31, 2026, we had approximately 61 employees and there was no labor union established by our employees. The following table sets out a breakdown of the number of employees by function as of March 31, 2026:

According to PRC regulations, we must participate in various employee social security plans organized by local governments, including pension, unemployment insurance, childbirth insurance, work-related injury insurance, medical insurance and housing insurance. We are also required under PRC law to contribute to the Housing Provident Fund (“HPF”) at specified percentages of the salaries, bonuses and certain allowances of our employees, up to a maximum amount specified by competent local government authorities from time to time.

For our employees in Hong Kong, we are required to participate in the Mandatory Provident Fund, or MPF, scheme in accordance with applicable Hong Kong laws and regulations. Under the MPF system, both the employer and the eligible employee are generally required to make mandatory contributions to an MPF scheme based on a prescribed percentage of the employee’s relevant income, subject to the applicable statutory minimum and maximum relevant income levels. We make MPF contributions for our eligible Hong Kong employees in accordance with applicable Hong Kong statutory requirements.

We believe that we maintain a good working relationship with our employees, and to date we have not experienced any significant labor disputes.  

Recent Developments

Disposition of Property Management and Subleasing Business

On June 30, 2025, the Company disposed of its property management and subleasing business conducted through Dongguan Hongxiang Commercial Co., Ltd. Following the disposition, the Company no longer conducts the property management and subleasing business as part of its continuing operations. The results of the property management and subleasing business have been classified as discontinued operations in the Company’s consolidated financial statements.

Acquisition of Keemo Fashion Group Limited

On February 17, 2026, the Company entered into a stock purchase agreement to acquire 34,200,000 shares of common stock of Keemo Fashion Group Limited, or KMFG, from Guang Wen Global Limited. The aggregate purchase price for the acquisition was approximately $5.5 million and was satisfied through the transfer of a portion of an existing bond held by the Company.

On March 30, 2026, the Company completed the acquisition of KMFG. Following the completion of the acquisition, the Company holds approximately 62.18% of the voting rights of the issued and outstanding shares of KMFG on a fully diluted basis, and KMFG became a controlled subsidiary of the Company. KMFG’s revenue contribution was not significant as of March 31, 2026, and management does not currently present Keemo Fashion as a separate material operating segment.

Reverse Stock Split

On March 19, 2026, following stockholder approval at the Company’s 2025 annual meeting of stockholders held on January 30, 2026, the Board of Directors approved a reverse stock split of the Company’s Common Stock at a ratio of 1-for-15. The Company filed a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of the State of Nevada on March 24, 2026. The reverse stock split became effective at 12:01 a.m. Eastern Time on March 30, 2026, and the Company’s Common Stock began trading on the Nasdaq Capital Market on a reverse-split adjusted basis under the same trading symbol, “ATXG,” on March 30, 2026.

Acquisition of Time Is Loan Limited

On May 15, 2026, we completed the transaction contemplated by a Share Exchange Agreement dated April 22, 2026 (the “First Share Exchange Agreement”), by and among the Company, Yingxi HK, Time Is Loan Limited, a company incorporated under the laws of Hong Kong, and Ms. OR Shan Shan. Pursuant to the First Share Exchange Agreement, Yingxi HK acquired 100% of the equity interests of Time Is Loan Limited from Ms. OR Shan Shan in exchange for the issuance of 137,790 shares of Common Stock of the Company to Ms. OR Shan Shan.

Time Is Loan Limited is a Hong Kong-based licensed money lender principally engaged in the provision of consumer and commercial lending services.

Acquisition of Riches Family Office Limited

On June 15, 2026  , we completed the transaction contemplated by a Share Exchange Agreement dated May 15, 2026 (the “Second Share Exchange Agreement”), by and among the Company, Yingxi HK, Riches Family Office Limited, a company incorporated under the laws of Hong Kong (“Riches Family”), Riches FO Holdings Limited (“Riches FO”), a company incorporated under the laws of Hong Kong and the sole shareholder of Riches Family, and Mr. Wu Rui, our Chief Operating Officer and the sole shareholder of Riches FO. Pursuant to the Second Share Exchange Agreement, Yingxi HK acquired 41.67% of the issued and outstanding equity interests of Riches Family from Riches FO in exchange for the issuance by the Company of 33,500 shares of its Common Stock to Mr. Wu Rui.

Government Regulations

Our garment manufacturing and logistics services businesses are conducted primarily through our PRC operating subsidiaries and are subject to relevant PRC laws, regulations and industry policies applicable to garment manufacturing, logistics services, transportation, employment, taxation and other areas. On June 25, 2025, HSW had its business license revoked by the Dongguan Market Supervision and Administration Bureau due to HSW’s failure to engage in business activities at its registered address for more than six consecutive months. As confirmed by our PRC counsel, except for HSW, each of our PRC subsidiaries in operation holds and maintains a valid business license issued by the local market supervision and administration bureau, and has received all requisite permissions and approvals in order to conduct and operate our business. Based on our understanding of the PRC laws and regulations, our PRC businesses hold all the business licenses issued and approved from the relevant local authorities and other administrative license required by its business, and do not require any other permissions or approvals to operate their PRC business operations. As of the date of this annual report, except as disclosed in this annual report, none of our PRC Subsidiaries has been denied or punished by relevant governmental authorities due to its business qualifications. The PRC government may, however, from time to time, adopt new laws, regulations, policies or implementation measures applicable to our PRC operating businesses, which may increase our compliance costs or make it more difficult for us to operate successfully in the PRC. Please see the section entitled “Risk Factors” for further details.

Our consulting service business is conducted through Yingxi HK, our Hong Kong subsidiary. The consulting service business primarily involves consulting, referral, coordination and administrative support services in connection with overseas wealth planning, insurance-related information and related cross-border service support. To the extent our consulting service involves insurance, wealth management, immigration, education or other regulated industries, we may be subject to applicable laws and regulations in Hong Kong and other relevant jurisdictions, including requirements relating to insurance intermediary activities, referral arrangements, personal data protection, anti-money laundering, customer due diligence and related compliance matters. We rely on third-party insurance brokers and other service providers, where applicable, to provide regulated products or services to customers. Any changes in applicable laws and regulations, or any failure by us or our third-party service providers to comply with such requirements, could adversely affect our consulting service business.

The PRC government encourages small to medium-sized companies in traditional industries, such as garment manufacturing and logistics services, to modernize their business models through technological upgrades and improved operational efficiency. We intend to continue monitoring applicable regulatory developments in the PRC and Hong Kong and to adjust our business practices as necessary to comply with applicable laws and regulations.

PRC Limitation on Overseas Listing and Share Issuances 

Currently, each of our PRC Subsidiaries holds and maintains a business license issued by the local market supervision and administration bureau, and has received all requisite permissions and approvals in order to conduct and operate our business. Based on our understanding of the PRC laws and regulations, our PRC businesses hold all the business licenses issued and approved from the relevant local authorities and other administrative license required by its business, and do not require any other permissions or approvals to operate their PRC business operations. As of the date of this annual report, none of our PRC Subsidiaries has been denied or punished by relevant governmental authorities due to its business qualifications. In addition, we and our non-PRC subsidiaries have also received all requisite permissions and approvals in order to conduct and operate our business.

In order to promote domestic enterprises to carry out overseas capital market activities in accordance with law and compliance, the CSRC issued the “Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies” and five supporting guidelines (collectively referred to as the Overseas Listing Filing Rules) on February 17, 2023, and took effect on March 31, 2023. The Overseas Listing Filing Rules clarify the relevant rules of the Chinese government on the management of overseas issuance, including but not limited to (i) Initial public offerings or listings in overseas markets shall be filed with the CSRC within 3 working days after the relevant application is submitted overseas. Subsequent securities offerings of an issuer in the same overseas market where it has previously offered and listed securities shall be filed with the CSRC within 3 working days after the offering is completed. Subsequent securities offerings and listings of an issuer in other overseas markets than where it has offered and listed shall be filed as initial public offerings; (ii) A negative list that prohibits overseas offering and listing; (iii) The reporting obligations of the issuer after filing, such as the change of control, voluntary or mandatory delisting and other major changes after overseas issuance or listing, the issuer should bear the obligation to report to the CSRC; (iv) Legal liability, such as failure to fulfill the filing procedures, or violation of relevant regulations in overseas listing, the CSRC shall order rectification, issue warnings to such domestic company, and impose a fine of between RMB 1,000,000 and RMB 10,000,000. Directly liable persons-in-charge and other directly liable persons shall be warned and each imposed a fine of between RMB 500,000 and RMB 5,000,000.

According to the Overseas Listing Filing Rules, the company, as an enterprise that has been listed on the Nasdaq Capital Market before the new regulations come into effect, does not need to apply to the CSRC for filing immediately. If it is issued and listed in other overseas markets, it shall be filed in accordance with relevant regulations. On April 29, 2024, the Company entered into two private placement agreements with certain individual investors for 330,000 shares of Common Stock each at a unit price of $0.98 per share and for a total of $646,800. After the transactions, we shall be filed with the CSRC within three working days after the issuance of shares is completed. The Company has submitted the filing application to the China Securities Regulatory Commission. As of June 29, 2026, the application is still pending.   Accordingly, the Company’s overseas issuances and subsequent additional issuances comply with the relevant provisions of the overseas listing filing regulation. As the overseas listing filing process has not yet been completed, the outcome and subsequent requirements remain uncertain. As a result, we cannot assure you that we will be able to complete all requirement for our future issuance in a timely manner and fully comply with the relevant new rules, if any. In addition, we cannot guarantee that we will not be subject to greater regulatory scrutiny or subsequent interference by the Chinese government.

Transfers of Cash to and from our Subsidiaries 

We are a Nevada holding company with no material operations of our own. We conduct substantially all of our operations through the operating companies established in the PRC, primarily Shenzhen Yingxi Industrial Chain Service Co., Ltd. (“YX”), our wholly owned subsidiary and its subsidiaries. We are not a Chinese operating company. We are a holding company and do not directly own any substantive business operations in China. As a result, although other means are available for us to obtain financing at the holding company level, Addentax’s ability to pay dividends to its shareholders and to service any debt it may incur may depend upon dividends paid by our PRC Subsidiaries. If any of our subsidiaries incurs debt on its own in the future, the instruments governing such debt may restrict its ability to pay dividends to Addentax. In addition, our PRC Subsidiaries are required to make appropriations to certain statutory reserve funds, which are not distributable as cash dividends except in the event of a solvent liquidation of the companies.

Current PRC regulations permit our PRC Subsidiaries to pay dividends to us through Yingxi HK, our intermediate holding subsidiary in Hong Kong, only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our PRC Subsidiaries is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation.

The PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any. Furthermore, if our PRC Subsidiaries incur debt on their own in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments.

Cash dividends, if any, on our Common Stock will be paid in U.S. dollars. If we are considered a PRC tax resident enterprise for tax purposes, any dividends we pay to our overseas shareholders may be regarded as China-sourced income and as a result may be subject to PRC withholding tax at a rate of up to 10.0%.

In order for us to pay dividends to our shareholders, we will rely on the distribution of dividends, through the WFOE, to Yingxi HK from our PRC Subsidiaries. As of the date of this annual report, none of our PRC Subsidiaries has distributed any dividends to Yingxi HK.

Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC enterprise. However, the 5% withholding tax rate does not automatically apply and certain requirements must be satisfied, including without limitation that (a) the Hong Kong enterprise must be the beneficial owner of the relevant dividends; and (b) the Hong Kong enterprise must directly hold no less than 25% share ownership in the PRC enterprise during the 12 consecutive months preceding its receipt of the dividends. In current practice, a Hong Kong enterprise must obtain a tax resident certificate from the Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot assure you that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to dividends to be paid by our WFOE to its immediate holding company, Yingxi HK. As of the date of this annual report, we have not applied for the tax resident certificate from the relevant Hong Kong tax authority. Yingxi HK intends to apply for the tax resident certificate when WFOE plans to declare and pay dividends to Yingxi HK.

As of the date of this annual report, we have had no transactions that involved the transfer of cash or assets throughout our corporate structure. The PRC Subsidiaries have not transferred cash or other assets to Addentax, including by way of dividends. However, to the extent cash in the business is in the PRC/Hong Kong or is in our PRC or Hong Kong subsidiaries, there can be no assurance that the PRC government will not intervene or impose restrictions or limitations on the ability of Addentax or Addentax’s subsidiaries to transfer cash. As a result, such funds may not be available to fund operations or for other use outside of the PRC or Hong Kong. Addentax does not currently plan or anticipate transferring cash or other assets from our operations in China to any non-Chinese entity. We intend to retain most, if not all, of available funds and any future earnings after this offering to the development and growth of our business in China. As of the date of this annual report, no transfers, dividends, or distributions have been made to our investors. Further, our management is directly supervising cash management. Our finance department is responsible for establishing the cash management policies and procedures among our departments and the operating entities. Each department or operating entity initiates a cash request by putting forward a cash demand plan, which explains the specific amount and timing of cash requested, and submitting it to designated management members of our Company, based on the amount and the use of cash requested. The designated management member examines and approves the allocation of cash based on the sources of cash and the priorities of the needs, and submits it to the cashier specialists of our finance department for a second review. Other than the above, we currently do not have other cash management policies or procedures that dictate how funds are transferred nor a written policy that addresses how we will handle any limitations on cash transfers due to PRC law.

Holding Foreign Company Accountable Act

Trading in our securities may be prohibited under the Holding Foreign Companies Accountable Act, or the HFCAA, if the PCAOB determines that it is unable to inspect or investigate completely our independent registered public accounting firm.

The HFCAA and related regulations require the SEC to prohibit the trading of securities of an issuer if the issuer is identified as a “Commission-Identified Issuer” for two consecutive years because the PCAOB is unable to inspect or investigate completely the issuer’s registered public accounting firm due to a position taken by an authority in a foreign jurisdiction. If our securities were subject to a trading prohibition under the HFCAA, Nasdaq may determine to delist our securities, and the market price and liquidity of our Common Stock could be materially and adversely affected.

On December 16, 2021, the PCAOB issued a determination that it was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong because of positions taken by authorities in those jurisdictions. On December 15, 2022, the PCAOB announced that it had voted to vacate its previous determinations with respect to mainland China and Hong Kong. As of the date of this annual report, the PCAOB has not issued any determination that would cause us to be identified as a Commission-Identified Issuer under the HFCAA.

Our independent registered public accounting firm for the fiscal year ended March 31, 2026 is HML PLT. HML PLT is headquartered in Malaysia and is registered with the PCAOB. We do not believe that HML PLT is currently subject to any PCAOB determination regarding an inability to inspect or investigate completely registered public accounting firms because of a position taken by an authority in a foreign jurisdiction.

However, the PCAOB may in the future determine that it is unable to inspect or investigate completely registered public accounting firms in one or more foreign jurisdictions, including if there are changes in applicable laws, regulations or governmental positions. If the PCAOB were to determine in the future that it cannot inspect or investigate completely our auditor, or if we were to engage a registered public accounting firm that is subject to such a determination, we could be identified as a Commission-Identified Issuer under the HFCAA. If we were so identified for two consecutive years, our securities would be subject to a trading prohibition under the HFCAA, and Nasdaq may determine to delist our securities. Any such trading prohibition or delisting, or the threat thereof, could materially and adversely affect the value of your investment.

Item 1A. Risk Factors

You should carefully consider the risks described below and elsewhere in this annual report on Form 10-K, which could materially and adversely affect our business, results of operations or financial condition. Our business faces significant risks and the risks described below may not be the only risks we face. Additional risks not presently known to us or that we currently believe are immaterial may materially affect our business, results of operations, or financial condition. If any of these risks occur, the trading price of our Common Stock could decline, and you may lose all or part of your investment. You should consider our business and prospects in light of the challenges we face, including the ones discussed in this section. In the event that any of the events described in the risk factors below occur, it could have a material adverse effect on our operations and cash flow and cause the value of our securities to decline in value or become worthless.

Risks Associated with Our Company

Our success depends on our customers’ ability to market and sell their products manufactured by us.

All of our customers in our garment manufacturing business are garment wholesalers and retailers. Consequently, our business and results of operations are directly affected by the demand of their end customers for their products supplied by us. Drastic changes in consumer preferences are beyond our control and will affect the demand for certain products supplied by us. We may not be able to anticipate and respond to such changes in consumer preferences in a timely manner. If the sales of our customers’ products decrease or do not grow as we expect, our customers may decrease the volume or purchase price of their orders, which could materially and adversely affect our business, financial condition and results of operations.

Our future expansion plans are subject to uncertainties and risks.

We have set out our future business plans in the “Business Strategies” section in this report. The implementation of such future plans requires us to effectively manage our sales, procurement, new logistics points and other aspects of our operations. If we fail to effectively and efficiently implement our future plans, we may not be successful in achieving desirable and profitable results. Even if we effectively and efficiently implement our future plans, there may be other unexpected events or factors that prevent us from achieving the desirable and profitable results from the implementation of our future plans, such as changes in our ability to comply with local rules and regulations or any delays or difficulties in obtaining the necessary licenses and approvals from local governments. Our business, financial condition, results of operations and growth prospects may be materially and adversely affected if our future expansion plans fail to achieve positive results.

If we are unable to create brand influence, we may face difficulties in attracting new business partners and clients.

Our brand is still being nurtured. It is of critical importance that we create and develop brand awareness in our industry in order to attract new clients and business partners. Our major competitors have built well-known brands and continue to increase their influence. Our failure to create and develop brand awareness for any reason may result in a material adverse effect on our business, operational results, and financial position.

Our ability to adequately protect our trade names, trademarks, copyrights and domain names could adversely affect our brand images and ability to expand our business.

We believe that our trade names, trademarks, copyrighted logo designs and domain names are important assets and an element of our brand development strategy. We have obtained trademark registrations and copyright registrations in China in connection with our business and maintain domain names for corporate, branding and business development purposes. There can be no assurance that we will be able to adequately protect these intellectual property rights or prevent unauthorized use of our brands, logos, websites, domain names or other intellectual property by third parties. Any infringement, misappropriation or other unauthorized use of our intellectual property could adversely affect our brand image, reputation and customer relationships, which could in turn have a material adverse effect on our business, results of operations, financial condition and cash flows.

We may be impacted by our ability to adequately source, distribute and sell merchandise and other materials in China.

We face a variety of other risks generally associated with doing business in China. For example:

We also rely upon third-party transportation providers for certain of our product shipments, including shipments to and from our distribution centers to our customers. Our utilization of these delivery services for shipments is subject to risks, including increases in labor costs and fuel prices, which would increase our shipping costs, and associate strikes and inclement weather, which may impact our transportation providers’ ability to provide delivery services that adequately meet our shipping needs.

Future price increases in raw materials or changes in the supply of raw materials may materially and adversely affect our business, financial condition and results of operations.

The purchase of raw materials accounted for a substantial amount of our total purchases. The price of finished fabric and yarns can be volatile and affected by factors such as weather, industry demand and supply. We cannot assure you that we can fully pass on the increased cost in raw materials to our customers. Future price increases in raw materials or changes in the supply of raw materials may materially and adversely affect our business, financial condition and results of operations.

A significant portion of our revenue is derived from major customers or sales channels, and the loss of any significant customer or sales channel may materially and adversely affect our financial condition and results of operations.

For the year ended March 31, 2026, our garment manufacturing revenue was generated through multiple sales channels. Offline sales, product promotion/giveaway sales, Taobao platform sales, WeChat platform sales, accessory sales and Douyin platform sales accounted for approximately 50.2%, 30.4%, 12.2%, 5.4%, 1.1% and 0.6%, respectively, of the Company’s total garment manufacturing revenue. Accordingly, the Company’s garment manufacturing revenue for the year ended March 31, 2026 was more diversified by sales channel and was not dependent on a single individual customer in the same manner as in prior periods.

For the year ended March 31, 2026, 3 customers accounted for approximately 34.6%, 30.7% and 18.6%, respectively, of the Company’s total garment manufacturing revenue. For the year ended March 31, 2025, two customers accounted for approximately 73.9% and 22.1%, respectively, of the Company’s total garment manufacturing revenue.

For the year ended March 31, 2026, three customers accounted for approximately 22.7%, 17.6% and 12.4%, respectively, of the Company’s total logistics services revenue. For the year ended March 31, 2025, two customers accounted for approximately 16.7% and 14.3%, respectively, of the Company’s total logistics services revenue.

For the year ended March 31, 2026, three customers accounted for approximately 53.6%, 31.6% and 13.4%, respectively, of the Company’s total consulting service revenue. The Company did not generate consulting service revenue during the year ended March 31, 2025.

Our customers are not obligated to continue to purchase products or services from us at any specific level or at all. If any of our significant customers reduce their orders, delay payments, terminate their business relationship with us, or if we are unable to obtain replacement customers or sales channels on commercially reasonable terms, our revenue, business operations and financial performance may be materially and adversely affected.

We are exposed to concentration risk due to reliance on major suppliers and service providers for the supply of our products and services, and any shortage, delay or disruption may significantly impact our business and results of operations.

During the years ended March 31, 2026 and 2025, approximately 45.7% and 41.4%, respectively, of the Company’s total purchases and service procurement were from the Company’s five largest suppliers and service providers. Our business, financial condition and results of operations may depend on the continued supply of products or services from our largest suppliers and service providers and on our ability to maintain stable relationships with them. Any significant disruption in supply, deterioration in supplier relationships, increase in supplier costs, or shortage or delay in the supply of materials or services may have a material adverse effect on our business and results of operations.

For consulting service, the Company may also rely on third-party referral partners, channel partners, insurance brokers or other cooperating service providers to support customer coordination and service fulfillment. Any material disruption in these relationships, or any failure by such third parties to provide services in a timely and compliant manner, could adversely affect the Company’s consulting service business.

Any labor shortages, increased labor costs or other factors affecting labor supply for our production materials may materially and adversely affect our business operations.

We rely on skilled workers to a significant extent as our production process in our garment manufacturing business is labor intensive in nature. Our business performance relies on the steady supply of relatively low cost labor in the PRC. There is no guarantee that our supply of labor will not be disrupted or that our labor costs will not increase. If we fail to retain our existing labor resources and/or recruit sufficient labor in a timely manner, we may not be able to accommodate sudden increases in demand for our products.

Labor costs are affected by the demand for and supply of labor and economic factors, such as the inflation rate and costs of living. Labor costs may further increase in the future due to a shortage of skilled labor and growing industry demands. The failure to identify and recruit replacement staff immediately following the unexpected loss of skilled workers could reduce our competitiveness. In addition, we expect continued increases in labor costs in the PRC. In these circumstances, our business, financial condition, results of operations and prospects could be materially and adversely affected.

We may be impacted by our ability to attract, develop and retain qualified associates and manage labor-related costs.

We believe our competitive advantage is providing a positive, engaging and satisfying experience for each customer, which requires us to have highly trained and engaged associates. Our success depends in part upon our ability to attract, develop and retain a sufficient number of qualified associates, including skill intensive labor. The turnover rate in the textile industry is generally high, and qualified individuals of the requisite caliber and number needed to fill these positions may be in short supply in our operations. Competition for such qualified individuals or changes in labor laws could require us to incur higher labor costs. Our inability to recruit a sufficient number of qualified individuals in the future may delay planned delivery of finished products or affect the speed with which we expand. Delayed deliveries, significant increases in associate turnover rates or significant increases in labor-related costs could have a material adverse effect on our results of operations, financial condition and cash flows.

We may be impacted by our vendors’ ability to manufacture and deliver raw materials in a timely manner, meet quality standards and comply with applicable laws and regulations.

We purchase raw materials from third-party vendors. Factors outside our control, such as production or shipping delays or quality problems, could disrupt merchandise deliveries and result in lost sales, cancellation charges or excessive markdowns.

In addition, quality problems could result in a product liability judgment or a widespread product recall that may negatively impact our sales and profitability for a period of time depending on product availability, competition reaction and consumer attitudes. Even if the product liability claim is unsuccessful or is not fully pursued, the negative publicity surrounding any assertions could adversely impact our reputation with existing and potential customers and our brand image.

Our business could also suffer if our third-party vendors fail to comply with applicable laws and regulations. While our internal and vendor’s operating guidelines promote ethical business practices and our associates visit and monitor the operations of our third-party vendors, we do not control these vendors or their practices. The violation of labor, environmental or other laws by third-party vendors used by us, or the divergence of a third-party vendor’s or partner’s labor or environmental practices from those generally accepted as ethical or appropriate, could interrupt or otherwise disrupt the shipment of finished products to us or damage our reputation.

Large and similar sized competitors could steal our market share by offering lower prices.

We endeavor to provide the highest possible quality service to our clients at the best possible price, however, large and similar sized competitors might steal some of our market share by offering lower prices, causing us to lose some of our clients. If this happens, we might not be able to generate adequate revenues and may soon find ourselves lacking the capital that is required to continue operations.

If we are unable to attract additional customers and clients to purchase our services or products (and future products we may develop or sell), it will have a negative effect on our ability to generate the revenue.

We currently have a limited number of clients and customers. We have identified additional potential clients, but we cannot guarantee that we will be able to secure them as clients. Even if we obtain additional clients and customers, there is no guarantee that we will be able develop products and/or services that our clients and customers will want to purchase. If we are unable to attract enough customers and clients to purchase services (and any products we may develop or sell) it will have a negative effect on our ability to generate the revenue that is necessary to operate or expand our business. The lack of sufficient revenue will have a negative effect on the ability of our Company to continue operations and could force us to cease operations.

We may be adversely affected by the performance of third-party contractors.

We engage third-party contractors to carry out logistics services. We endeavor to engage third-party companies with a strong reputation and track record, high performance reliability and adequate financial resources. However, any such third-party contractor may still fail to provide satisfactory logistics services at a level of quality or within the timeframe required by us or our customers. While we generally require our logistics contractors to fully reimburse us for any losses arising from delay in delivery or non-delivery, our results of operation and financial condition may be adversely affected if any of the losses are not borne by them. If the performance of any third-party contractor is not satisfactory, we may need to replace such contractor or take other remedial actions, which could adversely affect the cost structure and delivery schedule of our products and thus have a negative impact on our reputation, financial position and business operations. In addition, as we are expanding our business into other geographical locations in the PRC, there may be a shortage of third-party contractors that meet our quality standards and other selection criteria in such locations and, as a result, we may not be able to engage a sufficient number of high-quality third-party contractors in a timely manner, which may adversely affect our delivery schedules and delivery costs and hence our business, results of operations and financial conditions.

We rely on certain third-party contractors for portions of our logistics services, and any shortage, delay or disruption in subcontractor services may adversely affect our logistics operations.

The Company engages certain subcontractors to support its logistics business from time to time. For the years ended March 31, 2026 and 2025, subcontracting fees paid or payable to our largest subcontractor represented approximately 7.3% and 5.2%, respectively, of total cost of revenues for our logistics services segment. Based on these percentages, management does not believe that the Company was heavily reliant on any single subcontractor during these periods. However, our logistics business may still be affected if subcontractors are unable or unwilling to provide services to us on commercially acceptable terms, or if there is any shortage, delay or disruption in subcontractor services.

We have not experienced any material disputes with our subcontractors, and we believe we maintain good relationships with our logistics service providers. If we are unable to engage suitable subcontractors when needed or maintain stable relationships with our logistics service providers, our logistics business, results of operations and financial condition may be adversely affected.

If we are unable to control the reliance of third-party contractors efficiently and effectively, our business prospects and results of operations may be materially and adversely affected.

We engage subcontractors to carry out certain logistics services. Subcontracting fees for our logistics business accounted for approximately 8.9% and 5.5% of our total logistics services revenue for the years ended March 31, 2026 and 2025, respectively. If any of our significant subcontractors are unable or unwilling to provide services to us on commercially acceptable terms, or if there is any shortage, delay or disruption in subcontractor services, our logistics business, results of operations and financial condition may be materially and adversely affected.

Our insurance may not be sufficient.

We carry insurance that we consider adequate in regard to the nature of the covered risks and the costs of coverage. We are not fully insured against all possible risks, nor are all such risks insurable.

Our consulting service line is newly developed and may not generate sustainable revenue or profitability.

During the fiscal year ended March 31, 2026, we commenced a consulting service line. This business has a limited operating history and remains subject to significant uncertainty. Our ability to generate revenue from consulting services depends on our ability to attract and retain customers, maintain service quality, retain qualified personnel, coordinate effectively with third-party service providers, manage customer relationships and comply with applicable laws and regulations. If we are unable to successfully develop this business, our results of operations, financial condition and business prospects may be materially and adversely affected.

Our consulting services may be affected by regulatory and licensing risks relating to insurance referral and related services.

Our consulting services may involve referrals, coordination or administrative support relating to insurance, wealth management, identity planning, education planning or other cross-border services. These areas may be subject to licensing, regulatory, compliance, anti-money laundering, data protection and consumer protection requirements in relevant jurisdictions. We depend on third-party licensed service providers, including insurance companies and insurance brokers, where applicable. If we, our employees, referral partners or third-party service providers fail to comply with applicable regulatory requirements, or if a relevant license, approval or cooperation arrangement is suspended, terminated or not renewed, we may be unable to provide related services or receive related fees, and our business, results of operations and reputation may be materially and adversely affected.

Changes in commission structures or referral fee arrangements may reduce our revenue and cash flows. The revenue and cash flow of our consulting service line may be affected by changes in referral fee, commission payment or settlement arrangements among insurance companies, insurance brokers, referral parties and service providers. If referral fees are reduced, capped, deferred or paid over a longer period, our short-term revenue, working capital, cash flow and ability to invest in business development may be adversely affected. We may not be able to offset such impact by increasing consulting service fees or expanding non-insurance consulting revenue.

We depend on customer trust, third-party service providers and private-domain customer resources for our consulting business.

The success of our consulting business depends on our reputation, customer trust, private-domain customer resources, service quality and relationships with third-party service providers. Negative publicity, customer complaints, service failures, disputes with third-party service providers, data leakage or failure to protect customer information may harm our reputation and adversely affect our ability to attract or retain customers.

Our business depends on the continued contributions made by Mr. Hong Zhida, as our key executive officer, the loss of whom may result in a severe impediment to our business.

Our success is dependent upon the continued contributions made by our CEO, President and Chairman of the Board of Directors of the Company, Mr. Hong Zhida. We rely on his expertise in business operations when we are developing new products and services. The Company has no “Key Man” insurance to cover the resulting losses in the event that any of our officer or directors should die or resign.

If Mr. Hong Zhida cannot serve the Company or is no longer willing to do so, the Company may not be able to find alternatives in a timely manner or at all. This would likely result in severe damage to our business operations and would have an adverse material impact on our financial position and operational results. To continue as a viable operation, the Company may have to recruit and train replacement personnel at a higher cost.

Additionally, if Mr. Hong Zhida joins our competitors or develops similar businesses that are in competition with our Company, our business may also be negatively impacted.

Our future success depends on our ability to attract and retain qualified long-term staff to fill management, technology, sales, marketing, and customer services positions. We have a great need for qualified talent, but we may not be successful in attracting, hiring, developing, and retaining the talent required for our success.

We may be adversely impacted by certain compliance or legal matters.

We, along with third parties we do business with, are subject to complex compliance and litigation risks. Actions filed against us from time to time include commercial, tort, intellectual property, customer, employment, wage and hour, data privacy, securities, anti-corruption and other claims, including purported class action lawsuits. The cost of defending against these types of claims against us or the ultimate resolution of such claims, whether by settlement or adverse court decision, may harm our business. Further, potential claimants may be encouraged to bring lawsuits based on a settlement from us or adverse court decisions against us. We cannot currently assess the likely outcome of such suits, but if the outcome were negative, it could have a material adverse effect on our reputation, results of operations, financial condition and cash flows.

In addition, we may be impacted by litigation trends, including class action lawsuits involving consumers and shareholders, that could have a material adverse effect on our reputation, the market price of our Common Stock, results of operations, financial condition and cash flows.

Unauthorized disclosure, destruction or modification of data, through cybersecurity breaches, computer viruses or otherwise or disruption of our services could expose us to liability, protracted and costly litigation and damage our reputation.

Our business involves the collection, storage, processing and transmission of customers’ business data. An increasing number of organizations, including large merchants and businesses, other large technology companies, financial institutions and government institutions, have disclosed breaches of their information technology, or IT, systems, some of which have involved sophisticated and highly targeted cybersecurity attacks, including on portions of their websites or infrastructure. We may also be subjected to breaches of cybersecurity by hackers. Threats may derive from human error, fraud or malice on the part of employees or third parties, or may result from accidental technological failure. Concerns about cybersecurity are increased when we transmit information. Electronic transmissions can also be subjected to cybersecurity attacks, interception or loss. Also, computer viruses and malware can be distributed and spread rapidly over the internet and could infiltrate our systems or those of our associated participants, which can impact the confidentiality, integrity and availability of information, and the integrity and availability of our products, services and systems, among other effects. Denial of service or other cybersecurity attacks could be targeted against us for a variety of purposes, including interfering with our products and services or creating a diversion for other malicious activities. These types of actions and attacks could disrupt our delivery of products and services or make them unavailable, which could damage our reputation, force us to incur significant expenses in remediating the resulting impacts, expose us to uninsured liabilities, subject us to lawsuits, fines or sanctions, distract our management or increase our costs of doing business.

Our encryption of data and other protective measures may not prevent unauthorized access or use of sensitive data. A breach of our system or that of one of our associated participants may subject us to material losses or liability. A misuse of such data or a cybersecurity breach could harm our reputation and deter customers from using our products and services, thus reducing our revenue. In addition, any such misuse or breach could cause us to incur costs to correct the breaches or failures, expose us to uninsured liabilities, increase our risk of regulatory scrutiny, subject us to lawsuits, result in the imposition of material penalties and fines under applying laws or regulations.

We cannot assure that there are written agreements in place with every associated participant or that such written agreements will prevent the unauthorized use, modification, destruction or disclosure of data or enable us or our customers to obtain reimbursement in the event we should suffer incidents resulting in unauthorized use, modification, destruction or disclosure of data. Any unauthorized use, modification, destruction or disclosure of data could result in protracted and costly litigation, which could have a material and adverse effect on our business, financial condition and results of operations.

Cybersecurity attack incidents are increasing in frequency and evolving in nature and include, but are not limited to, installation of malicious software, unauthorized access to data and other electronic security breaches that could lead to disruptions in systems, unauthorized release of confidential or otherwise protected information and the corruption of data. Given the unpredictability of the timing, nature and scope of information technology disruptions, there can be no assurance that the procedures and controls we employ will be sufficient to prevent security breaches from occurring and we could be subject to manipulation or improper use of our systems and networks or financial losses from remedial actions, any of which could have a material and adverse effect on our business, financial condition and results of operations.

Failure to make adequate contributions to various employee benefits plans as required by PRC regulations may subject us to penalties. 

Companies operating in China are required to participate in various government sponsored employee benefit plans, including certain social insurance, housing funds and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of employees up to a maximum amount specified by the local government from time to time at locations where they operate their businesses. The requirement of employee benefit plans has not been implemented consistently by the local governments in China given the different levels of economic development in different locations. As of March 31, 2026, we have made adequate employee benefit payments in strict compliance with the relevant PRC regulations for and on behalf of our employees. 

There is no guarantee that we will not fail in making adequate employee benefit payments in strict compliance with applicable PRC labor related laws and regulations in the future. Our failure in making contributions to various employee benefits plans in strict compliance with applicable PRC labor related laws and regulations may subject us to late payment penalties, and we could also be required to make up the contributions for these plans as well as to pay late fees and fines. If we are subject to late fees or fines in relation to the underpaid employee benefits, our financial condition and results of operations may be adversely affected.

U.S. regulatory bodies may be limited in their ability to conduct investigations or inspections of the operations of our operating subsidiaries in mainland China. 

The SEC, the U.S. Department of Justice and other U.S. authorities may also have difficulties in bringing and enforcing actions against us or our directors or executive officers in mainland China. The SEC has stated that there are significant legal and other obstacles to obtaining information needed for investigations or litigation in mainland China. Mainland China adopted a revised securities law that became effective on March 1, 2020, Article 177 of which provides, among other things, that no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the territory of mainland China. Further, the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Administrative Measures”) provide that overseas securities regulatory authorities may conduct investigations or evidence collection relating to mainland China companies’ overseas offering and listing activities through the assistance of the CSRC under relevant cross-border securities regulatory cooperation mechanisms. Accordingly, without regulatory cooperation between the U.S. and China, no entity or individual in mainland China may provide documents and information relating to securities business activities to overseas regulators when it is under direct investigation or evidence discovery conducted by overseas regulators, which could present significant legal and other obstacles to obtaining information needed for investigations and litigation conducted outside of mainland China.

We are required to fulfill the Trial Administrative Measures filing procedures and report relevant information to the CSRC; and, since further interpretation and implementation of the new regulations are still required, we cannot assure you that we will be able to complete the filings for any future offerings, and fully comply with the relevant new rules on a timely basis, if at all. 

On July 6, 2021, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Strictly and Lawfully Cracking Down Illegal Securities Activities to crack down on illegal activities in the securities market and promote the high-quality development of the capital market (the “Opinions”), which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the capital market laws of mainland China.

On December 24, 2021, the CSRC published the Provisions of the State Council on the Administration of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comment) (the “Draft Administrative Provisions”) and the Administrative Measures for the Filing of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comment) (the “Draft Filing Measures”). The Draft Administrative Provisions and the Draft Filing Measures lay out requirements for filing and include unified regulation management, strengthening regulatory coordination, and cross-border regulatory cooperation.

On February 17, 2023, the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Administrative Measures”), which came into force on March 31, 2023. On the same date, the CSRC circulated the Guidance Rules on CSRC’s official website. The Trial Administrative Measures refine the regulatory system by subjecting both direct and indirect overseas offering and listing activities to the CSRC filing-based administration. The Trial Administrative Measures, together with the relevant guidance rules reiterate the basic principles of the Draft Administrative Provisions and Draft Filing Measures and impose substantially the same requirements for the overseas securities offering and listing by domestic enterprises, and clarified and emphasized several aspects, which include, but are not limited to: (i) comprehensive determination of the “indirect overseas offering and listing by domestic companies of mainland China” in compliance with the principle of “substance over form” and particularly, an issuer will be required to undertake the filing procedures under the Trial Administrative Measures if the following criteria are met at the same time: a) 50% or more of the issuer’s operating revenue, total profit, total assets or net assets, as documented in its audited consolidated financial statements for the most recent accounting year, is accounted for by domestic companies in mainland China, and b) the main parts of the issuer’s business activities are conducted in mainland China, or its main places of business are located in mainland China, or the senior managers in charge of its business operation and management are mostly Chinese citizens or domiciled in mainland China; (ii) a negative list of types of issuers banned from listing or offering overseas, such as issuers under investigation for crimes or major violations of the law, or whose overseas offering and listing may endanger national security, or whose controlling shareholders and the actual controller have been convicted of crimes, such as corruption, bribery, embezzlement, misappropriation of property or undermining the order of the socialist market economy during the latest three years; (iii) issuers’ compliance with foreign investment, network security, data security, and other national security laws, regulations and relevant provisions; (iv) issuers’ filing and reporting obligations, such as the obligation to file with the CSRC after it submits an application for initial public offering to competent overseas regulators, and the obligation to file with the CSRC after it completes subsequent offerings in the same overseas market and to report to the CSRC within 3 working days on material events including change of control or voluntary or mandatory delisting of the issuer; and (v) the CSRC’s authority to fine both issuers and their relevant shareholders for failure to comply with the Trial Administrative Measures, including failure to comply with the filing procedures or filing with materials on false, misleading statements or material omissions. As the Trial Administrative Measures are newly-issued, there remains uncertainty regarding their interpretation and implementation. Therefore, we cannot assure you that we will be able to complete the filings for any future offerings and fully comply with the relevant new rules on a timely basis, if at all.

We are exposed to liabilities relating to environmental protection and safety laws and regulations.

Our operations are subject to comprehensive and frequently changing laws and regulations relating to environmental protection and health and safety. The discharge of waste and pollutants from our manufacturing operations into the environment may give rise to liabilities that may require us to incur costs to remedy such discharge. If we violate such laws or regulations, we may be required to implement corrective actions and could be subject to civil or criminal fines or penalties or other sanctions.

However, we cannot assure you that any environmental laws adopted in the future will not materially increase our operating costs and other expenses. We cannot assure you that we will not have to make significant capital or operating expenditures in the future in order to comply with existing or new laws and regulations or that we will comply with applicable environmental laws at all times. Such violations or liability could have a material adverse effect on our business, financial condition and results of operations.

If our employees do not maintain a strong work ethic and comply with our code of ethics, including our confidentiality requirements, their actions may negatively influence our business and reputation.

Employees with good professional ethics are important for any company’s development. An employee might, either intentionally or unintentionally, disclose confidential information about our Company or our clients and particularly unscrupulous employees might endeavor to sell material information to industry competitors. Furthermore, our employees will develop relationships with our business partners and clients, and may acquire information that could be used to harm their business interests. If this should happen, our partners and clients might lose faith in our Company. While we can never eliminate these ethical risks entirely, we will attempt to reduce the likelihood of breaches of trust and mitigate their impacts of it by hiring highly professional employees and establishing strong internal information management systems.

We also plan to establish a series of policies to reduce the likelihood of such events.

However, in the event that any employee discloses confidential information about our Company or our clients or sells material information to industry competitors, it could have a material adverse effect on our reputation, operations and cash flow.

We face risks associated with future Chinese regulations.

Currently there are no government regulations in China regarding our type of services. The Chinese government encourages small-medium sized traditional industry companies to conduct business model transformation and technology updates, which may help companies gain more competitive advantages in international markets.

Other than the required adherence to general business laws and regulatory disclosures, our services are not affected by any specific additional Chinese government regulations. However, this does not preclude the possibility that China may institute regulations that will make it difficult or impossible for us to operate successfully, if at all, in the future. If that occurs, we may have to focus our business on companies located outside China. This could cause our results of operations to be materially adversely affected, reduce our revenues and cause the value of our securities to decline in value.

We may require additional financing in the future and our operations could be curtailed if we are unable to obtain required additional financing when needed.

We may need to obtain additional debt or equity financing to fund future capital expenditures. While we do not anticipate seeking additional financing in the immediate future, any additional equity may result in dilution to the holders of our outstanding shares of capital stock. Additional debt financing may include conditions that would restrict our freedom to operate our business, such as conditions that:

We cannot guarantee that we will be able to obtain any additional financing on terms that are acceptable to us, or at all.

Natural disasters and other events beyond our control could materially adversely affect us.

Natural disasters or other catastrophic events may cause damage or disruption to our operations, international commerce and the global economy, and thus could have a strong negative effect on us. Our business operations are subject to interruption by natural disasters, fire, power shortages, pandemics and other events beyond our control. This may result in delivery delays, malfunctioning of facilities or shutdown of logistic points. Such events could make it difficult or impossible for us to deliver our products and services to our customers and could decrease demand for our services. In the past, there was no significant disruption of operation at our production facilities and logistic points. However, we cannot assure you that the production facilities and logistic points will always operate normally in the future. 

As we are no longer an emerging growth company, we are subject to increased reporting, compliance and governance requirements, which may increase our costs and divert management’s attention from our business.

We are no longer an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As a result, we are subject to additional reporting, disclosure, internal control, governance and other requirements applicable to public companies that are not emerging growth companies.

Compliance with these requirements has increased and may continue to increase our legal, accounting, auditing, investor relations and other compliance costs. In addition, management and other personnel are required to devote a greater amount of time and resources to compliance initiatives, disclosure obligations, internal control assessments and corporate governance matters, which may divert their attention from the operation and growth of our business.

Among other things, we may be required to incur additional expenses to maintain and enhance our internal control over financial reporting, disclosure controls and procedures, and corporate governance practices. If we are unable to comply with applicable reporting and regulatory requirements in a timely and cost-effective manner, or if we identify deficiencies in our internal controls or disclosure controls, we may be subject to regulatory scrutiny, enforcement actions, litigation, reputational harm, or a loss of investor confidence, any of which could adversely affect our business, financial condition, results of operations and the market price of our Common Stock.

General Risks Associated with Business Operations in China

The PRC government may intervene or influence our business operations at any time or may exert more control over offerings conducted overseas and foreign investment in China based issuers, which could result in a material change in our business operations and/or the value of our securities. Additionally, the governmental and regulatory interference could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. 

Recent statements by the Chinese government have indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investments in China-based issuers. For example, the PRC has proposed new rules that would require companies collecting or holding large amounts of data to undergo a cybersecurity review prior to listing in foreign countries, a move that would significantly tighten oversight over China based internet giants. The Cybersecurity Review Measures that took effect from February 15, 2022 stipulate that an internet platform operator who possesses more than 1 million users’ personal information must report to the Office of Cybersecurity Review for a cybersecurity review when seeking listings in other nations.

On February 24, 2023, the CSRC, Ministry of Finance of the People’s Republic of China, National Administration of State Secrets Protection, and National Archives Administration of China, have jointly released the Provisions on Strengthening Confidentiality and Archives Administration in Respect of Overseas Issuance and Listing of Securities by Domestic Enterprises, which provide that a domestic company that seeks to offer and list its securities in an overseas market shall strictly abide by applicable PRC laws and regulations, enhance legal awareness of keeping state secrets and strengthening archives administration, institute a sound confidentiality and archives administration system, and take necessary measures to fulfill confidentiality and archives administration obligations. The above proposed provisions and rules are enacted, the relevant filing procedures of the CSRC and other governmental authorities may be required in connection with this offering. On July 7, 2022, CAC promulgated the Measures for the Security Assessment of Data Cross-border Transfer, effective on September 1, 2022, which requires the data processors to apply for data cross-border security assessment coordinated by the CAC under the following circumstances: (i) any data processor transfers important data to overseas; (ii) any critical information infrastructure operator or data processor who processes personal information of over 1 million people provides personal information to overseas; (iii) any data processor that has cumulatively provides personal information to overseas and has already provided personal information of more than 100,000 people or sensitive personal information of more than 10,000 people to overseas since January 1st of the previous year; and (iv) other circumstances under which the data cross-border transfer security assessment is required as prescribed by the CAC.

Since the majority of our operations are located in the PRC, our business may be subject to PRC laws relating to the collection, use, sharing, retention, security, and transfer of confidential and private information, such as personal information and other data. As of the date of this annual report, these new laws and guidelines have not impacted the Company’s ability to conduct its business, accept foreign investments, or list and trade on a U.S. or other foreign exchange. The business of our subsidiaries until this Form 10K are not subject to cybersecurity review with the Cyberspace Administration of China, or CAC, given that: (i) our products and services are offered not directly to individual users but through our institutional customers; (ii) we do not possess a large amount of personal information in our business operations; and (iii) data processed in our business does not have a bearing on national security and thus may not be classified as core or important data by the authorities. Further, we believe our newly established companies and our business plan will not change the above conclusion. However, there remains uncertainty as to how the Cybersecurity Review Measures will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures. If any such new laws, regulations, rules, or implementation and interpretation comes into effect, we will take all reasonable measures and actions to comply and to minimize the adverse effect of such laws on us. Any non-compliance could result in penalties or other significant legal liabilities.

We cannot assure you that PRC regulatory agencies, including the CAC, would take the same view as we do, and there is no assurance that we can fully or timely comply with such laws. In the event that we are subject to any mandatory cybersecurity review and other specific actions required by the CAC, we face uncertainty as to whether any clearance or other required actions can be timely completed, or at all. Given such uncertainty, we may be further required to suspend our relevant business, shut down our website, or face other penalties, which could materially and adversely affect our business, financial condition, and results of operations. Any future action by the PRC government and companies whose foreign securities offerings are subject to review by the CSRC or the CAC could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and could cause the value of such securities to significantly decline or be worthless.

Our independent registered public accounting firm’s audit documentation related to their audit reports included in this annual report on Form 10-K include audit documentation located in the PRC. Our Common Stock may be delisted or prohibited from being traded in the U.S. under the HFCAA if the PCAOB is unable to inspect or investigate completely our independent registered public accounting firm or relevant audit documentation and, as such, you may be deprived of the benefits of such inspection which could result in limitations or restrictions to our access to the U.S. capital markets. The delisting or the cessation of trading of our Common Stock, or the threat of their being delisted or prohibited from being traded, may materially and adversely affect the value of your investment.

Our independent registered public accounting firm issued an audit opinion on the financial statements included in our annual report on Form 10-K for the fiscal year ended March 31, 2026. As an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, our auditor is required by the laws of the United States to undergo regular inspections by the PCAOB.

Our independent registered public accounting firm for the fiscal year ended March 31, 2026 is HML PLT. HML PLT is registered with the PCAOB and is headquartered in Malaysia. We do not believe that HML PLT is currently subject to any PCAOB determination regarding an inability to inspect or investigate completely registered public accounting firms because of a position taken by an authority in a foreign jurisdiction. Accordingly, as of the date of this annual report, we do not believe that we are currently subject to a trading prohibition under the Holding Foreign Companies Accountable Act, or the HFCAA, as a result of the PCAOB’s inability to inspect or investigate our auditor.

Inspections of certain other firms that the PCAOB has conducted outside of China have identified deficiencies in those firms’ audit procedures and quality control procedures, which may be addressed as part of the inspection process to improve future audit quality. The PCAOB is currently able to conduct inspections of audit firms located in mainland China and Hong Kong and conduct inspections of U.S. audit firms where audit work papers are located in mainland China. The audit workpapers for our PRC operations are located in the PRC.

In addition, as part of a continued regulatory focus in the United States on access to audit and other information currently protected by national law, in particular China’s, in June 2019, a bipartisan group of lawmakers introduced bills in both houses of Congress that would require the SEC to maintain a list of issuers for which the PCAOB is not able to inspect or investigate an auditor report issued by a foreign public accounting firm. The Ensuring Quality Information and Transparency for Abroad-Based Listings on our Exchanges (EQUITABLE) Act prescribes increased disclosure requirements for such issuers and, beginning in 2025, the delisting from national securities exchanges such as Nasdaq of issuers included for three consecutive years on the SEC’s list. On May 20, 2020, the U.S. Senate passed S. 945, the HFCAA. The HFCAA was approved by the U.S. House of Representatives on December 2, 2020. On December 18, 2020, the former U.S. president signed into law the HFCAA. In essence, the HFCAA requires the SEC to prohibit foreign companies from listing securities on U.S. securities exchanges if a company retains a foreign accounting firm that cannot be inspected by the PCAOB for three consecutive years, beginning in 2021. The enactment of the HFCAA and any additional rulemaking efforts to increase U.S. regulatory access to audit information could cause investor uncertainty for affected issuers, including us, and the market price of our securities could be adversely affected, and we could be delisted if it is unable to cure the situation to meet the PCAOB inspection requirement in time. On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCAA. We will be required to comply with these rules if the SEC identifies it as having a “non-inspection” year under a process to be subsequently established by the SEC. The SEC is assessing how to implement other requirements of the HFCAA, including the listing and trading prohibition requirements described above.

Furthermore, on June 22, 2021, the U.S. Senate passed the AHFCAA and on December 29, 2022, the Consolidated Appropriations Act was signed into law by President Biden, which contained, among other things, an identical provision to AHFCAA and amended the HFCAA by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time before your securities may be prohibited from trading or delisted. On September 22, 2021, the PCAOB adopted a final rule implementing the HFCAA, which provides a framework for the PCAOB to use when determining, as contemplated under the HFCAA, whether the Board is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction. On December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCAA. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions.

On December 2, 2021, the SEC adopted amendments to finalize rules implementing the submission and disclosure requirements in the HFCAA. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB is unable to inspect or investigate completely because of a position taken by an authority in a foreign jurisdiction.

On December 16, 2021, the PCAOB issued a report on its determinations that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong because of positions taken by mainland China and Hong Kong authorities in those jurisdictions, and identifies the registered public accounting firms in mainland China and Hong Kong that are subject to such determinations. The PCAOB has made such designations as mandated under the HFCAA. Pursuant to each annual determination by the PCAOB, the SEC will, on an annual basis, identify issuers that have used non-inspected audit firms and thus are at risk of such suspensions in the future.

On August 26, 2022, the CSRC, the Ministry of Finance of the PRC, and the PCAOB signed a Statement of Protocol, or the Protocol, governing inspections and investigations of audit firms based in China and Hong Kong. On December 15, 2022, the PCAOB announced that it has completed a test inspection of two selected auditing firms in mainland China and Hong Kong and has voted to vacate its previous Determination Report, which concluded in December 2021 that the PCAOB could not inspect or investigate completely registered public accounting firms based in mainland China or Hong Kong. On December 23, 2022, the AHFCAA was enacted, which amended the HFCAA by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three and such act was signed into law on December 29, 2022.

On December 29, 2022, the Consolidated Appropriations Act was signed into law by President Biden, which contained, among other things, an identical provision to AHFCAA and amended the HFCAA by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three.

The PCAOB continues to demand complete access in mainland China and Hong Kong moving forward and has resumed regular inspections since March 2023. Should the PCAOB be unable to fully conduct inspections of our auditors’ work papers in the PRC, it will make it more difficult to evaluate the effectiveness of our auditor’s audit procedures or quality control procedures and you may be deprived of the benefits of such inspection, which could result in limitation or restriction to our access to the U.S. capital markets, and our securities may be delisted or prohibited from trading if the PCAOB determines that it cannot inspect or investigate completely our auditor under the HFCAA. Investors may consequently lose confidence in our reported financial information and procedures and the quality of our financial statements, which would adversely affect us.

To the extent cash in the business is in the PRC or a PRC entity, the funds may not be available to fund operations or for other use outside of the PRC due to interventions in or the imposition of restrictions and limitations on the ability of our Company or our subsidiaries by the PRC government to transfer cash.

Relevant PRC laws and regulations permit the companies in the PRC to pay dividends only out of their distributable profits, if any, as determined in accordance with PRC accounting standards and regulations. Additionally, each of the companies in the PRC are required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. These reserves are not distributable as cash dividends. In order for us to pay dividends to our stockholders, we will rely on the distribution of dividends, through the WFOE, to Yingxi HK from our PRC Subsidiaries.

Our cash dividends, if any, will be paid in U.S. dollars. If we are considered a tax resident enterprise of the PRC for tax purposes, any dividends we pay to our overseas shareholders may be regarded as China-sourced income and as a result may be subject to PRC withholding tax. See “Risk Factors – General Risks Associated with Business Operation in China - We may be treated as a resident enterprise for PRC tax purposes under the PRC Enterprise Income Tax Law, and we may therefore be subject to PRC income tax on our global income” in our annual report on Form 10-K for the fiscal year ended March 31, 2026.

The PRC government also imposes controls on the convertibility of RMB into foreign currencies and, in certain cases, the remittance of currency out of the PRC. The majority of our income is received in RMB and shortages in foreign currencies may restrict our ability to pay dividends or other payments, or otherwise satisfy our foreign currency denominated obligations, if any. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures from trade-related transactions, can be made in foreign currencies without prior approval from SAFE as long as certain procedural requirements are met. Registration, approval or filing from appropriate government authorities is required if RMB is converted into foreign currency and remitted out of the PRC to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may, at its discretion, impose restrictions on access to foreign currencies for current account transactions and if this occurs in the future, we may not be able to pay dividends in foreign currencies to our shareholders.

As a result of the above, to the extent cash in the business is in the PRC or a PRC entity, such funds or assets may not be available to fund operations or for other use outside of the PRC, due to interventions in or the imposition of restrictions and limitations on the ability of us, or our subsidiaries by the PRC government to transfer cash.

You may have difficulty enforcing judgments against us.

We are a Nevada corporation. However, a substantial portion of our operations and assets are located outside the United States, primarily in the PRC and Hong Kong. In addition, certain of our directors and executive officers reside outside the United States. Although certain of our independent directors are located in the United States, it may still be difficult for investors to effect service of process within the United States upon our directors, officers or assets located outside the United States, or to enforce judgments obtained in U.S. courts against such persons or assets, including judgments based upon the civil liability provisions of the U.S. federal securities laws.

In addition, there is uncertainty as to whether the courts of the PRC would recognize or enforce judgments of U.S. courts against us or our directors or executive officers. As a result, investors may have difficulty enforcing claims or judgments against us or such persons based on U.S. federal securities laws or other laws of the United States.

Foreign exchange fluctuations may affect our business.

We accept the payment for services in Chinese Yuan (CNY or RMB), Hong Kong Dollars (HKD), and U.S. Dollars (USD). Therefore, foreign exchange fluctuations may influence our business in unpredictable ways.

The value of the Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economic conditions and the foreign exchange policy adopted by the PRC government. For instance, in August 2015, the People’s Bank of China, or PBOC, changed the way it calculates the mid-point price of Renminbi against the U.S. dollar, requiring the market-makers who submit for reference rates to consider the previous day’s closing spot rate, foreign-exchange demand and supply as well as changes in major currency rates. In 2016 and 2017, the value of the Renminbi depreciated approximately 7.2% and appreciated 6.3% against the U.S. dollar, respectively. From April 2024 through the end of March 2025, the value of the Renminbi depreciated by approximately 1.2% against the U.S. dollar. It is difficult to predict how market forces or PRC or U.S. government policy, including any interest rate increases by the Federal Reserve, may impact the exchange rate between the Renminbi and the U.S. dollar in the future. There remains significant international pressure on the PRC government to adopt a more flexible currency policy, including from the U.S. government, which has threatened to label China as a “currency manipulator,” which could result in greater fluctuation of the Renminbi against the U.S. dollar.

A substantial percentage of our revenues and costs are denominated in Renminbi, and a significant portion of our assets are also denominated in Renminbi. We are a holding company and we rely on dividends, loans and other distributions on equity paid by our operating subsidiaries in China. Any significant fluctuations in the value of the Renminbi may materially and adversely affect our liquidity and cash flows. Appreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amount we would receive. Conversely, to the extent that we need to convert U.S. dollars into Renminbi for our operations, appreciation of the Renminbi against the U.S. dollar would have an adverse effect on the Renminbi amount we would receive.

Inflation could pose a risk to our business.

Inflation is an important factor that must be considered as we move forward. A change in the rate of inflation could influence the profits that we generate from our business. When the rate of inflation rises, the operational costs of running our company would increase, such as labor costs, raw materials and public utilities, affecting our ability to provide our services at competitive prices. An increase in the rate of inflation would force our clients to search for other service providers, causing us to lose business and revenue.

Changes in the policies, regulations, rules and the enforcement of laws of the PRC government may be quick with little advance notice and could have a significant impact upon the business we may be able to conduct in the PRC and the profitability of such business.

The PRC’s economy is in a transition from a planned economy to a market oriented economy subject to five-year and annual plans adopted by the central government that set national economic development goals. Policies of the PRC government can have significant effects on the economic conditions of the PRC. The PRC government has confirmed that economic development will follow the model of a market economy. Under this direction, we believe that the PRC will continue to strengthen its economic and trading relationships with foreign countries and business development in the PRC will follow market forces. While we believe that this trend will continue, we cannot assure you that this will be the case. Changes in policies, regulations, rules and the enforcement of laws by the PRC government, which changes may be quick with little advance notice, could adversely affect our interests by, among other factors: changes in laws, regulations or the interpretation thereof, confiscatory taxation, restrictions on currency conversion, imports or sources of supplies, or the expropriation or nationalization of private enterprises. Although the PRC government has been pursuing economic reform policies for more than two decades, we cannot assure you that the government will continue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership, social or political disruption, or other circumstances affecting the PRC’s political, economic and social environment.

There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations.

Most of our operations are conducted in the PRC, and are governed by PRC laws, rules and regulations. Our PRC Subsidiaries are subject to laws, rules and regulations applicable to foreign investment in China. The PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions may be cited for reference but have limited precedential value.

In 1979, the PRC government began to promulgate a comprehensive system of laws, rules and regulations governing economic matters in general. The overall effect of legislation over the past four decades has significantly enhanced the protections afforded to various forms of foreign investment in China. However, China has not developed a fully integrated legal system, and recently enacted laws, rules and regulations may not sufficiently cover all aspects of economic activities in China or may be subject to significant degree of interpretation by PRC regulatory agencies and courts. In particular, because these laws, rules and regulations are relatively new, and because of the limited number of published decisions and the non-precedential nature of these decisions, and because the laws, rules and regulations often give the relevant regulator significant discretion in how to enforce them, the interpretation and enforcement of these laws, rules and regulations involve uncertainties and can be inconsistent and unpredictable. Therefore, it is possible that our existing operations may be found not to be in full compliance with relevant laws and regulations in the future. In addition, the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all, and which may have a retroactive effect. As a result, we may not be aware of our violation of these policies and rules until after the occurrence of the violation.

Any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management attention. Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy than in more developed legal systems. These uncertainties may impede our ability to enforce the contracts we have entered into and could materially and adversely affect our business, financial condition and results of operations.

PRC regulations regarding acquisitions impose significant regulatory approval and review requirements, which could make it more difficult for us to pursue growth through acquisitions.

Under the PRC Anti-Monopoly Law, any concentration of undertakings (including share or asset acquisitions that result in the acquisition of control or decisive influence over another business operator) involving operations within the PRC must be pre-notified to the State Administration for Market Regulation (“SAMR”), the central PRC anti-monopoly enforcement authority, if the combined turnover of all participating undertakings in the preceding fiscal year meets the statutory turnover thresholds set by the State Council. No such concentration may be implemented prior to clearance from SAMR.

In addition, on August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce (“MOFCOM”), the State-Owned Assets Supervision and Administration Commission of the State Council (“SASAC”), the State Taxation Administration(“STA”) the SAMR,,CSRC, and the SAFE, jointly adopted the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, which came into effect on September 8, 2006 and was amended on June 22, 2009. Under the M&A Rules, the approval of MOFCOM must be obtained in circumstances where overseas companies established or controlled by PRC enterprises or residents acquire domestic companies affiliated with such PRC enterprises or residents. Applicable PRC laws, rules and regulations also require certain merger and acquisition transactions to be subject to security review.

Our business may be subject to a variety of PRC laws and other obligations regarding cybersecurity and data protection. 

Our business may be subject to PRC laws relating to the collection, use, sharing, retention, security, and transfer of confidential and private information, such as personal information and other data. These laws continue to develop, and the PRC government may adopt other rules and restrictions in the future. Non-compliance could result in penalties or other significant legal liabilities.

Pursuant to the PRC Cybersecurity Law, which was promulgated by the Standing Committee of the National People’s Congress on November 7, 2016, took effect on June 1, 2017, and was amended on October 28, 2025 (the “Amended CSL”), with the amendments taking effect on January 1, 2026, personal information and important data collected and generated by a critical information infrastructure operator in the course of its operations in China must be stored in China, and if a critical information infrastructure operator purchases internet products and services that affects or may affect national security, it should be subject to cybersecurity review by the Cyberspace Administration of China (“CAC”). Due to the lack of further interpretations, the exact scope of “critical information infrastructure operator” remains unclear.

On April 13, 2020, twelve Chinese government agencies jointly promulgated the Measures for Cybersecurity Review, which became effective on June 1, 2020, set forth the cybersecurity review mechanism for critical information infrastructure operators, and provided that critical information infrastructure operators who intend to purchase internet products and services that affect or may affect national security shall be subject to a cybersecurity review. The CAC subsequently released a revised draft of the Measures for Cybersecurity Review for public consultation on 10 July 2021; the formal revised version was issued on December 28, 2021 and entered into force on February 15, 2022. The revised Measures expanded the scope of cybersecurity review by imposing a mandatory pre-listing filing obligation with CAC on internet platform operators holding personal information of in excess of one million users that plan to pursue overseas listings. On June 10, 2021, the Standing Committee of the National People’s Congress promulgated the PRC Data Security Law, which took effect in September 2021. The Data Security Law provides for a security review procedure for the data activities that may affect national security.

Furthermore, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severe and Lawful Crackdown on Illegal Securities Activities, which was available to the public on July 6, 2021. These opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies. These opinions proposed to take effective measures, such as promoting the construction of relevant regulatory systems, to deal with the risks and incidents facing China-based overseas-listed companies and the demand for cybersecurity and data privacy protection. As these laws, opinions and the draft measures were recently issued, official guidance and interpretation of these remain unclear in several respects at this time, and the PRC government authorities may have wide discretion in the interpretation and enforcement of these laws, opinions and the draft measures. Therefore, it is uncertain whether the future regulatory changes would impose additional restrictions on our business.

The Data Security Law also sets forth the data security protection obligations for entities and individuals conducting data processing activities, including that no entity or individual may acquire such data by stealing or other illegal means, and the collection and use of such data should not exceed the necessary limits The costs of compliance with, and other burdens imposed by, PRC Cybersecurity Law and any other cybersecurity and related laws may limit the use and adoption of our products and services and could have an adverse impact on our business. Further, if the enacted version of the Cybersecurity Review Measures mandates clearance of cybersecurity review and other specific actions to be completed by companies like us, we face uncertainties as to whether such clearance can be timely obtained, or at all.

We are not be subject to the cybersecurity review by the CAC for overseas public offerings of our securities to foreign investors, given that: (i) our products and services are offered not directly to individual users but through our institutional customers; (ii) we do not possess a large amount of personal information in our business operations; and (iii) data processed in our business does not have a bearing on national security and thus may not be classified as core or important data by the authorities. Further, we believe our newly established companies and our business plan will not change the above conclusion. However, there remains uncertainty as to how the Draft Measures will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Draft Measures. If any such new laws, regulations, rules, or implementation and interpretation comes into effect, we will take all reasonable measures and actions to comply and to minimize the adverse effect of such laws on us.

We cannot assure you that PRC regulatory agencies, including the CAC, would take the same view as we do, and there is no assurance that we can fully or timely comply with such laws. In the event that we are subject to any mandatory cybersecurity review and other specific actions required by the CAC, we face uncertainty as to whether any clearance or other required actions can be timely completed, or at all. Given such uncertainty, we may be further required to suspend our relevant business, shut down our website, or face other penalties, which could materially and adversely affect our business, financial condition, and results of operations.

PRC regulations relating to investments in offshore companies by PRC residents may subject our PRC-resident beneficial owners or our PRC Subsidiaries to liability or penalties, limit our ability to inject capital into our PRC Subsidiaries or limit our PRC Subsidiaries’ ability to increase their registered capital or distribute profits.

SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, on July 4, 2014, which replaced the former circular commonly known as “SAFE Circular 75” promulgated by SAFE on October 21, 2005. SAFE Circular 37 requires PRC residents to register with local branches of SAFE in connection with their direct establishment or indirect control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents’ legally owned assets or equity interests in domestic enterprises or offshore assets or interests, referred to in SAFE Circular 37 as a “special purpose vehicle.” SAFE Circular 37 further requires amendment to the registration in the event of any significant changes with respect to the special purpose vehicle, such as increase or decrease of capital contributed by PRC individuals, share transfer or exchange, merger, division or other material event. In the event that a PRC shareholder holding interests in a special purpose vehicle fails to fulfill the required SAFE registration, the PRC Subsidiaries of that special purpose vehicle may be prohibited from making profit distributions to the offshore parent and from carrying out subsequent cross-border foreign exchange activities, and the special purpose vehicle may be restricted in its ability to contribute additional capital into its PRC Subsidiaries. Moreover, failure to comply with the various SAFE registration requirements described above could result in liability under PRC law for evasion of foreign exchange controls.

We have notified substantial beneficial owners of shares of Common Stock who we know are PRC residents of their filing obligation, and pursuant to SAFE Circular 37, we have periodically filed and updated the above-mentioned foreign exchange registration on behalf of certain employee shareholders who we know are PRC residents. However, we may not be aware of the identities of all of our beneficial owners who are PRC residents. We do not have control over our beneficial owners and cannot assure you that all of our PRC-resident beneficial owners will comply with SAFE Circular 37 and subsequent implementation rules. The failure of our beneficial owners who are PRC residents to register or amend their SAFE registrations in a timely manner pursuant to SAFE Circular 37 and subsequent implementation rules, or the failure of future beneficial owners of our company who are PRC residents to comply with the registration procedures set forth in SAFE Circular 37 and subsequent implementation rules, may subject the beneficial owners or our PRC Subsidiaries to fines and legal sanctions. On February 13, 2015, SAFE promulgated a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or SAFE Notice 13, which became effective on June 1, 2015. Pursuant to SAFE Notice 13, entities and individuals are required to apply for foreign exchange registration of foreign direct investment and overseas direct investment, including those required under the SAFE Circular 37, with designated domestic banks, instead of SAFE. The designated domestic banks will directly review the applications and conduct the registration.

Furthermore, since it is unclear how those new SAFE regulations, and any future regulation concerning offshore or cross-border transactions, will be interpreted, amended and implemented by the relevant PRC government authorities, we cannot predict how these regulations will affect our business operations or future strategy. Failure to register or comply with relevant requirements may also limit our ability to contribute additional capital to our PRC Subsidiaries and limit our PRC Subsidiaries’ ability to distribute dividends to our company. These risks may have a material adverse effect on our business, financial condition and results of operations.

We may be treated as a resident enterprise for PRC tax purposes under the PRC Enterprise Income Tax Law, and we may therefore be subject to PRC income tax on our global income.

Under the PRC Enterprise Income Tax Law and its implementing rules, both of which came into effect on January 1, 2008, enterprises established under the laws of jurisdictions outside of China with “de facto management bodies” located in China may be considered PRC tax resident enterprises for tax purposes and may be subject to the PRC enterprise income tax at the rate of 25% on their global income. “De facto management body” refers to a managing body that exercises substantive and overall management and control over the production and business, personnel, accounting books and assets of an enterprise. The State Administration of Taxation issued the Notice Regarding the Determination of Chinese-Controlled Offshore-Incorporated Enterprises as PRC Tax Resident Enterprises on the basis of de facto management bodies, or Circular 82, on April 22, 2009. Circular 82 provides certain specific criteria for determining whether the “de facto management body” of a Chinese-controlled offshore-incorporated enterprise is located in China. Although Circular 82 only applies to offshore enterprises controlled by PRC enterprises, not those controlled by foreign enterprises or individuals, the determining criteria set forth in Circular 82 may reflect the State Administration of Taxation’s general position on how the “de facto management body” test should be applied in determining the tax resident status of offshore enterprises, regardless of whether they are controlled by PRC enterprises. If we were to be considered a PRC resident enterprise, we would be subject to PRC enterprise income tax at the rate of 25% on our global income. In such case, our profitability and cash flow may be materially reduced as a result of our global income being taxed under the Enterprise Income Tax Law. We believe that none of our entities outside of China is a PRC resident enterprise for PRC tax purposes. However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body.”

Restrictions on currency exchange may limit our ability to utilize our PRC revenue effectively.

We are a Nevada holding company with no material operations of our own. We conduct substantially all of our operations through the operating companies established in the PRC, primarily YX, our wholly owned subsidiary and its subsidiaries. We are a holding company and do not directly own any substantive business operations in China. Substantially all of our revenue is denominated in Renminbi. The Renminbi is currently convertible under the “current account,” which includes dividends, trade and service-related foreign exchange transactions, but requires approval from or registration with appropriate government authorities or designated banks under the “capital account,” which includes foreign direct investment and loans, including loans we may secure from our onshore subsidiaries. Currently, one of our PRC Subsidiaries, which is a wholly-foreign owned enterprise, may purchase foreign currency for settlement of “current account transactions,” including payment of dividends to us, without the approval of SAFE by complying with certain procedural requirements. However, the relevant PRC governmental authorities or the local bank may limit or eliminate our ability to purchase foreign currencies in the future for current account transactions.

Since 2016, PRC governmental authorities have imposed more stringent restrictions on outbound capital flows, including heightened scrutiny over “irrational” overseas investments for certain industries, as well as over four kinds of “abnormal” offshore investments, which are:

On January 26, 2017, SAFE promulgated the Circular on Further Improving Reform of Foreign Exchange Administration and Optimizing Genuineness and Compliance Verification, which tightened the authenticity and compliance verification of cross-border transactions and cross-border capital flow, including requiring banks to verify board resolutions, tax filing forms and audited financial statements before wiring foreign invested enterprises’ foreign exchange dividend distribution of over US$50,000. In addition, the Outbound Investment Sensitive Industry Catalogue (2018) lists certain sensitive industries that are subject to NDRC pre-approval requirements prior to remitting investment funds offshore, which subjects us to increased approval requirements and restrictions with respect to our overseas investment activity. Since a significant amount of our PRC revenue is denominated in Renminbi, any existing and future restrictions on currency exchange may limit our ability to utilize revenue generated in Renminbi to fund our business activities outside of the PRC, make investments, service any debt we may incur outside of China or pay dividends in foreign currencies to our shareholders.

The disclosures in our reports and other filings with the SEC and our other public pronouncements are not subject to the scrutiny of any regulatory bodies in the PRC.

We are regulated by the SEC and our reports and other filings with the SEC are subject to SEC review in accordance with the rules and regulations promulgated by the SEC under the Securities Act and the Exchange Act. Our SEC reports and other disclosure and public pronouncements are not subject to the review or scrutiny of any PRC regulatory authority. For example, the disclosure in our SEC reports and other filings are not subject to the review by China Securities Regulatory Commission, a PRC regulator that is responsible for oversight of the capital markets in China. Accordingly, you should review our SEC reports, filings and our other public pronouncements with the understanding that no local regulator has done any review of us, our SEC reports, other filings or any of our other public pronouncements.

Introduction of new laws or changes to existing laws by the PRC government may adversely affect our business.

The PRC legal system is a codified legal system made up of written laws, regulations, circulars, administrative directives and internal guidelines. Unlike common law jurisdictions like the U.S., decided cases (which may be taken as reference) do not form part of the legal structure of the PRC and thus have no binding effect on subsequent cases with similar issues and fact patterns. Furthermore, in line with its transformation from a centrally-planned economy to a more free market-oriented economy, the PRC government is still in the process of developing a comprehensive set of laws and regulations. As the legal system in the PRC is still evolving, laws and regulations or the interpretation of the same may be subject to further changes. For example, the PRC government may impose restrictions on the amount of service fees that may be payable by municipal governments to wastewater and sludge treatment service providers. Also, the PRC central and municipal governments may impose more stringent environmental regulations which would affect our ability to comply with, or our costs to comply with, such regulations. Such changes, if implemented, may adversely affect our business operations and may reduce our profitability.

Substantial doubt exists regarding our ability to continue as a going concern.

We have a history of operating losses and have incurred significant net losses in recent years. We incurred net losses of approximately $4.0 million and $5.1 million for the fiscal years ended March 31, 2026 and 2025, respectively. As discussed in Note 2(b) to our consolidated financial statements, these conditions raise substantial doubt about our ability to continue as a going concern within one year after the date our consolidated financial statements are issued.

Our ability to continue as a going concern depends on our ability to successfully execute our business plan, improve operating results, generate positive cash flows from operations, manage operating costs, collect accounts receivable, and obtain additional financing when needed. Management is pursuing initiatives to expand the Company’s garment manufacturing, logistics services and consulting services businesses, improve operating efficiencies and control costs; however, there can be no assurance that these efforts will be successful.

If we are unable to generate sufficient revenue, achieve profitability, or obtain additional financing on acceptable terms, or at all, we may be required to reduce, delay or discontinue certain business activities, sell assets, restructure our operations, or seek additional strategic alternatives. Any such actions could materially and adversely affect our business, financial condition, results of operations and the value of our common stock. Furthermore, the existence of substantial doubt regarding our ability to continue as a going concern may make it more difficult for us to obtain financing, enter into commercial arrangements, attract customers, retain employees and maintain relationships with suppliers and other business partners.

Geopolitical conflicts involving the United States, Israel, Iran and other parties in the Middle East could adversely affect our business, financial condition and results of operations.

Ongoing armed conflicts and heightened geopolitical tensions involving the United States, Israel, Iran and other parties in the Middle East have created significant uncertainty in global economic, political and financial markets. The continuation or escalation of these conflicts, including potential disruptions to international shipping routes, energy supplies and global trade, could adversely affect global economic conditions and increase market volatility.

These events have contributed, and may continue to contribute, to fluctuations in commodity prices, fuel and transportation costs, inflation, interest rates, foreign exchange rates and capital markets conditions. In addition, the conflicts could result in cyberattacks, sanctions, export controls, supply chain disruptions, disruptions in the availability or pricing of inventory and raw materials, or other adverse effects on global commerce.

Although we currently do not maintain operations in the Middle East, the indirect effects of geopolitical instability, military conflict and related economic uncertainty could adversely affect our business operations, financial condition, results of operations and ability to access capital markets. The extent, duration and ultimate impact of these conflicts remain uncertain and cannot be predicted.

Risks Relating to Our Holding Company Structure

Substantial uncertainties exist with respect to the interpretation and implementation of the newly enacted Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations. 

On March 15, 2019, the PRC National People’s Congress approved the Foreign Investment Law, which came into effect on January 1, 2020 and replaces the trio of existing laws regulating foreign investment in the PRC, namely, the Sino-Foreign Equity Joint Venture Enterprise Law, the Sino-Foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-Invested Enterprise Law, together with their implementation rules and ancillary regulations and become the legal foundation for foreign investment in the PRC. Meanwhile, the Implementation Regulation of the Foreign Investment Law and the Measures for Reporting of Information on Foreign Investment came into effect as of January 1, 2020, which clarified and elaborated the relevant provisions of the Foreign Investment Law.

The Foreign Investment Law sets out the basic regulatory framework for foreign investments and establishes a system of pre-entry national treatment with a negative list for foreign investments, pursuant to which (i) the foreign investment negative list specifies prohibited industrial sectors, into which foreign investors are not permitted to make any investment;(ii) foreign investment into restricted sectors set out in the negative list must comply with applicable statutory access conditions and complete relevant approval or filing procedures as required by law; and(iii) all business sectors not included on the foreign investment negative list shall grant foreign investors and foreign-invested enterprises pre-establishment and post-establishment treatment no less favourable than that accorded to domestic Chinese investors and domestic enterprises. The Foreign Investment Law also sets forth necessary mechanisms to facilitate, protect and manage foreign investments and proposes to establish a foreign investment information reporting system, through which foreign investors or foreign-invested enterprises are required to submit initial report, report of changes, report of deregistration and annual report relating to their investments to the Ministry of Commerce, or MOFCOM, or its local branches.

Although our operating structure is legal and permissible under the current Chinese law and regulations, including the Foreign Investment Law, 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.

We may rely on dividends and other distributions on equity paid by our PRC Subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC Subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business. 

We are a Nevada holding company and we rely principally on dividends and other distributions on equity from our PRC Subsidiaries for our cash requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders for services of any debt we may incur. If our PRC Subsidiaries incur debt on its own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other distributions to us. Under PRC laws and regulations, our PRC Subsidiaries, which are wholly foreign-owned enterprises, may pay dividends only out of their respective accumulated profits as determined in accordance with PRC accounting standards and regulations. In addition, each of our PRC subsidiaries is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve fund, until the aggregate amount of such fund reaches 50% of its registered capital. Such reserve funds cannot be distributed to us as dividends. At its discretion, a wholly foreign-owned enterprise may allocate a portion of its after-tax profits based on PRC accounting standards to an enterprise expansion fund, or a staff welfare and bonus fund.

A portion of our revenue was generated by our PRC Subsidiaries in RMB, which is not freely convertible into other currencies. As a result, any restriction on currency exchange may limit the ability of our PRC Subsidiaries to use their Renminbi revenues to pay dividends to us.

The PRC government may continue to strengthen its foreign exchange regulatory controls, and more restrictions and substantial vetting process may be put forward by SAFE for cross-border transactions falling under both the current account and the capital account. Any limitation on the ability of our PRC Subsidiaries to pay dividends or make other kinds of payments to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.

In addition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC-resident enterprises are incorporated.

PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds of our offerings to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business. 

We are an offshore holding company conducting our operations in China through our PRC Subsidiaries. We may in the future make loans or provide guarantee to our PRC Subsidiaries subject to the approval or registration from governmental authorities and limitation of amount, or we may make additional capital contributions to our wholly foreign-owned subsidiary in China. Any loans to our wholly foreign-owned subsidiaries in China, which are treated as foreign-invested enterprise under PRC law, are subject to foreign exchange loan registrations. In addition, a foreign-invested enterprise, or FIE, shall use its capital pursuant to the principle of authenticity and self-use within its business scope. Under the Notice of the State Administration of Foreign Exchange on Matters Concerning the Deepening of Reform in the Administration of Foreign Exchange for Cross-border Investment and Financing, which amended by SAFE and became effective on September 12, 2025, The use of foreign exchange income under capital, foreign debt, and the RMB funds obtained from their settlement by non-financial enterprises shall follow the principles of authenticity and self-use. Such funds shall not be used (i) directly or indirectly for expenditures prohibited by national laws and regulations; (ii) unless otherwise expressly provided, such funds shall not be used directly or indirectly for securities investment or other investment and wealth management (except for wealth management products and structured deposits with a risk rating not higher than level two); (iii)such funds shall not be used to grant loans to non-affiliated enterprises (except where the business scope expressly permits).

In light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, if at all, with respect to future loans by us to our PRC Subsidiaries or with respect to future capital contributions by us to our PRC Subsidiaries. If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds from our offerings and to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

Risks Related to our Common Stock

The market price of our shares is likely to be highly volatile and subject to wide fluctuations in response to factors such as:

In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of the shares.

We may never be able to pay dividends and are unlikely to do so.

To date, we have not paid, nor do we intend to pay in the foreseeable future, dividends on our Common Stock, even if we become profitable. Earnings, if any, are expected to be used to advance our activities and for working capital and general corporate purposes, rather than to make distributions to stockholders. Since we are not in a financial position to pay dividends on our Common Stock and future dividends are not presently being contemplated, investors are advised that return on investment in our Common Stock is restricted to an appreciation in the share price. The potential or likelihood of an increase in share price is uncertain.

In addition, under Nevada law, we may only pay dividends subject to our ability to service our debts as they become due and provided that our assets will exceed our liabilities after the dividend. Our ability to pay dividends will therefore depend on our ability to generate sufficient profits. Further, because of the various rules applicable to our operations in China and the regulations on foreign investments as well as the applicable tax law, we may be subject to further limitations on our ability to declare and pay dividends to our shareholders.

Shareholders may be diluted significantly through our efforts to obtain financing and satisfy obligations through the issuance of securities.

Wherever possible, our board of directors will attempt to use non-cash consideration to satisfy obligations. In many instances, we believe that the non-cash consideration will consist of shares of our Common Stock, warrants to purchase shares of our Common Stock or other securities. Our board of directors has authority, without action or vote of the shareholders, to issue all or part of the authorized but unissued shares of Common Stock or warrants to purchase such shares of Common Stock. In addition, we may attempt to raise capital by selling shares of our Common Stock, possibly at a discount to market in the future. These actions will result in dilution of the ownership interests of existing shareholders and may further dilute Common Stock book value, and that dilution may be material. Such issuances may also serve to enhance existing management’s ability to maintain control of us, because the shares may be issued to parties or entities committed to supporting existing management.

If our Common Stock were delisted from Nasdaq and became subject to the SEC’s penny stock rules, the liquidity and marketability of our Common Stock could be adversely affected.

Our Common Stock is listed on the Nasdaq Capital Market. As a result, our Common Stock is generally exempt from the SEC’s penny stock rules, notwithstanding that the market price of our Common Stock may trade below $5.00 per share. However, if our Common Stock were delisted from Nasdaq and traded in the over-the-counter market, and if our Common Stock did not qualify for an applicable exclusion from the SEC’s penny stock rules, broker-dealers may be subject to additional sales practice requirements in connection with transactions in our Common Stock. These requirements could make it more difficult for investors to buy or sell our Common Stock and could adversely affect the liquidity and market price of our Common Stock.

Future issuances of our Common Stock upon conversion of convertible securities or exercise of warrants may dilute our existing stockholders and adversely affect the market price of our Common Stock.

We have previously issued convertible notes, warrants and other equity-linked securities, and we may issue additional shares of Common Stock or equity-linked securities in the future in connection with financings, acquisitions, compensation arrangements or other corporate purposes. To the extent any outstanding convertible securities or warrants are converted or exercised, or to the extent we issue additional shares of Common Stock or securities convertible into or exercisable for shares of Common Stock, our existing stockholders may experience substantial dilution.

We may require additional capital in the future to develop our business operations and pursue our strategic objectives. Any additional capital raised through the sale of equity or equity-linked securities may dilute our stockholders’ ownership percentages and may adversely affect the market price of our Common Stock. The terms of any securities issued by us in future capital transactions may be more favorable to new investors and may include preferences, superior voting rights, warrants or other derivative securities, any of which may further dilute the interests of our existing stockholders.

In addition, sales of a significant number of shares of our Common Stock, or the perception that such sales may occur, could adversely affect the market price of our Common Stock and make it more difficult for us to raise capital through future equity or equity-linked financings. We may also incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we issue, such as convertible notes, warrants or equity awards, which may adversely affect our financial condition and results of operations.

Future sales of substantial amounts of the shares of Common Stock by existing stockholders could adversely affect the price of our Common Stock.

If we or our existing stockholders, our directors or their affiliates or certain of our executive officers, sell a substantial number of our Common Stocks in the public market, including the Resale Shares once issuable upon exercise of the PIPE Warrants and the Placement Agent Warrants, the market price of our Common Stock could decrease significantly. The perception in the public market that we or our stockholders might sell our Common Stock could also depress the market price of our Common Stock and could impair our future ability to obtain capital, especially through an offering of equity securities.

The market price of our Common Stock may be subject to fluctuation and you could lose all or part of your investment.

Our Common Stock is listed on the Nasdaq Capital Market. The market price of our Common Stock has been, and may continue to be, volatile. The market price of our Common Stock may fluctuate as a result of a number of factors, some of which are beyond our control, including, but not limited to:

These factors and any corresponding price fluctuations may materially and adversely affect the market price of our Common Stock and result in substantial losses being incurred by our investors. In the past, following periods of market volatility, public company stockholders have often instituted securities class action litigation. If we were involved in securities litigation, it could impose a substantial cost upon us and divert the resources and attention of our management from our business.

Item 1B. Unresolved Staff Comments

Not applicable to smaller reporting companies.

Item 1C. Cybersecurity

Risk Management and Strategy

Cybersecurity Governance

Item 2. Properties

Our principal executive office is located at Kingkey 100, Block A, Room 4805, Luohu District, Shenzhen City, China 518000. The prior lease for this office expired on July 31, 2025 and has not been renewed. The Company currently uses this office space without separate rental charge through an arrangement with a company controlled by Mr. Hong Zhida, our Chief Executive Officer. We also lease properties in the PRC from independent third parties which serve as our manufacturing factory, dormitory and additional offices for our garment manufacturing and logistics businesses. Following the disposal of HX on July 1, 2025, the Company no longer conducts property management and subleasing business as part of its continuing operations.

As of the date of this annual report, we also have 114 logistics points and they are located in 10 provinces and 2 municipalities in the PRC. These logistics service points are operated through cooperation arrangements with local logistics service providers and are not leased properties of the Company. We believe that the offices, warehouses and factory that we currently lease are adequate to meet our needs for the foreseeable future.

Item 3. Legal Proceedings

From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. We are not presently a party to any legal proceedings that in the opinion of our management, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition, or cash flows.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchasers of Equity Securities

Market Information

Our Common Stock is currently traded on the Nasdaq Capital Market under the symbol “ATXG.”

Holders of Record

As of June 29, 2026, there were 1,031,435 shares of Common Stock issued and outstanding held by a total of 428 shareholders of record, not including beneficial holders whose shares are held in names other than their own.

Dividends

We have not paid any cash dividends on our Common Stock, and our board of directors currently intends to retain future earnings, if any, to fund the operations and growth of our business. Any determination by our board of directors to pay dividends in the future to stockholders will be dependent upon our operational results, financial condition, capital requirements, business projections, general business conditions, statutory and regulatory restrictions, and any other factors deemed appropriate by our board of directors.

In addition, our ability to pay dividends may be subject to restrictions under applicable PRC laws and regulations and the ability of our subsidiaries to distribute funds to us. See “Item 1. Business — Transfers of Cash to and from our Subsidiaries.”

Securities Authorized for Issuance under Equity Compensation Plans

For information on securities authorized for issuance under our existing equity compensation plan, see Item 12 under the heading “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”

Recent Sales of Unregistered Securities

During the fiscal year ended March 31, 2026, there were no sales of unregistered securities that were required to be reported pursuant to Item 701 of Regulation S-K and that were not previously disclosed in a Current Report on Form 8-K or Quarterly Report on Form 10-Q.

Recent Purchases of Equity Securities  

None.

Item 6. [Reserved]

Item 7. 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 years ended March 31, 2026 and 2025 should be read in conjunction with the Financial Statements and corresponding notes included in this annual report on Form 10-K. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations, and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Risk Factors and Special Note Regarding Forward-Looking Statements in this report. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” “target”, “forecast” and similar expressions to identify forward-looking statements.

Overview

Our Business

We are a Nevada holding company with no material operations of our own. We conduct substantially all of our operations through our operating companies established in the PRC, primarily YX, our wholly-owned subsidiary and its subsidiaries. We are not a Chinese operating company. We are a holding company and do not directly own any substantive business operations in China. Therefore, our investors will not directly hold any equity interests in our operating companies. Our holding company structure involves unique risks to investors. Chinese regulatory authorities could disallow our operating structure, which would likely result in a material change in our operations and/or the value of our Common Stock, including that it could cause the value of such securities to significantly decline or become worthless. Our holding company, Addentax Group Corp., is listed on the Nasdaq Capital Market under the symbol of “ATXG”. During the fiscal year ended March 31, 2026, our continuing operations primarily consisted of garment manufacturing, logistics services and consulting services.

Our garment manufacturing business consists of sales made principally to wholesalers located in the PRC. We have our own manufacturing facilities, with sufficient production capacity and skilled workers on production lines to ensure that we meet our high quality control standards and delivery requirements for our customers. We conduct our garment manufacturing operations through three wholly-owned subsidiaries, namely YX and YS, which are located in Guangdong province, China.

Our logistics business consists of delivery and courier services covering 45 cities in 10 provinces and 2 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 two wholly-owned subsidiaries, namely XKJ and PF, which are located in Guangdong province, China.

We provide business consulting and coordination services to customers seeking overseas wealth planning, insurance-related information and related cross-border service support. Our services primarily include customer consultation, appointment coordination, referral and liaison with third-party insurance brokers or other service providers, and related administrative support. We conduct our consulting service business through our wholly owned subsidiary, Yingxi HK, which is located in Hong Kong, China.

On March 30, 2026, we completed the acquisition of KMFG, a Nevada corporation with headquarters in Shenzhen, China. KMFG operates two core business segments: (i) an apparel and garment trading business focused on the wholesale distribution of men’s and women’s apparel to distributors primarily in China, sourcing directly from manufacturers without maintaining its own production facilities; and (ii) a digital publishing business conducted through its wholly owned subsidiary, GW Reader Sdn. Bhd. in Malaysia, which operates a mobile-based online fiction platform utilizing a pay-per-chapter microtransaction model for global readers. As of March 31, 2026, KMFG’s revenue contribution was not significant, and management does not currently present KMFG as a separate business line or reportable segment. Management will continue to monitor KMFG’s operations, revenue contribution and business development and will reassess the related disclosure and segment presentation as necessary in future periods.

Dispositions of Subsidiaries and Discontinued Operations

During the fiscal year ended March 31, 2026, we disposed of Dongguan Aotesi Garments Co., Ltd., a PRC company (“AOT”), and Dongguan Hongxiang Commercial Co., Ltd., a PRC company (“HX”). AOT was previously engaged in the garment manufacturing business and was disposed of to the local management of AOT on May 6, 2025. After the disposition, AOT became a third party to the Company. The Company carries on the garment manufacturing business through its remaining subsidiaries, and the disposition of AOT did not qualify as discontinued operations. HX was previously engaged in the property management and subleasing business and was disposed of to the local management of HX on July 1, 2025. After the disposition, HX became a third party to the Company. Following the disposition, the Company no longer conducts the property management and subleasing business through HX or any other subsidiary. The property management and subleasing business has been classified as discontinued operations in the Company’s consolidated financial statements. AOT and HX were no longer subsidiaries of the Company as of March 31, 2026 and as of the date of this annual report.

Business Objectives

Garment Manufacturing Business

We believe the strength of our garment manufacturing business is mainly due to our consistent emphasis on exceptional quality and timely delivery. The primary business objective for our garment manufacturing segment is to expand our customer base and improve our profit.

Logistics Services Business

The business objective and future plan for our logistics services segment is to establish an efficient logistics system and to build a nationwide delivery and courier network in China. As of March 31, 2026, we provided logistics services to over 45 cities in approximately 10 provinces and 2 municipalities. We expect to develop 20 additional logistics routes in existing serving cities and improve the Company’s profit in the year 2026.

Consulting Services Business

The business objective of our consulting service line is to provide advisory, referral, coordination and administrative support services in connection with overseas insurance configuration, wealth management planning, identity planning, education planning and related cross-border service needs. We intend to develop this business as an asset-light service business with an emphasis on high-value consulting services, digital tools and private-domain customer management.

Seasonality of Business

Garment Manufacturing Business

We generally receive more purchase orders during our second and third quarters and fewer manufacture orders during May and June.

Logistics Services Business

We generally receive more delivery orders in our third and fourth quarters and are more vulnerable to shipping delays in the PRC during Chinese New Year due to traffic and port congestion, border crossing delays and customs clearance issues.

Consulting Services Business

Management expects relatively stronger customer activity during June to September, October to December, holidays and weekends, while January to March is generally expected to be a traditional slower season due to the Chinese New Year period. Actual seasonality may vary based on customer demand, market conditions, regulatory developments and the availability of third-party service providers.

Collection Policy

Garment manufacturing Business

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

Logistics Services Business

For logistics services, we generally receive payments from the customers between 30 to 90 days following the date of the registration of our receipt of packages.

Consulting Services Business

For consulting services, the credit period is generally 30 to 60 days, depending on the service arrangement, customer relationship, settlement cycle with third-party service providers and internal credit review. We do not directly collect customer insurance premiums. Premiums must be paid by customers directly to the relevant insurance company’s designated bank account or official payment gateway.

Economic Uncertainty

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

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

Critical Accounting Estimates

The preparation of our consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures in the consolidated financial statements and accompanying notes. Management evaluates its estimates on an ongoing basis based on historical experience, current conditions and other assumptions that management believes are reasonable under the circumstances. Actual results could differ from those estimates.

Management believes that the following accounting estimates involve a significant level of judgment or estimation uncertainty and are important to an understanding of our financial condition and results of operations. Management has discussed significant audit matters, including accounting estimates and related financial statement disclosures, with the Audit Committee in connection with the annual audit process.

Goodwill and Impairment Assessment

As a result of the acquisition of KMFG during the fiscal year ended March 31, 2026, the Company recognized goodwill in its consolidated financial statements. Goodwill represents the excess of the purchase consideration over the estimated fair value of identifiable net assets acquired and liabilities assumed in a business combination. The determination of goodwill requires management to make judgments and assumptions regarding the fair value of assets acquired and liabilities assumed, including assumptions related to future cash flows, discount rates, useful lives, market conditions and other valuation inputs.

The Company evaluates goodwill for impairment at least annually, and more frequently if events or changes in circumstances indicate that the carrying amount of goodwill may not be recoverable. The impairment assessment requires management to make estimates and assumptions regarding future operating results, cash flows, discount rates, market conditions and the Company’s ability to execute its business plans. If actual results are lower than management’s expectations, or if there are adverse changes in business, market or economic conditions, the Company may be required to recognize impairment charges, which could materially affect the Company’s results of operations and financial condition.

Going Concern Assessment

The Company has incurred net losses and has used cash in operating activities. Management evaluates whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued. This assessment requires management to consider the Company’s liquidity, working capital, operating results, cash flows, debt obligations, available financing sources and management’s plans to mitigate adverse conditions.

Management’s going concern assessment involves significant judgment, including assumptions regarding the Company’s ability to improve operating results, manage operating costs, collect receivables, obtain additional financing if necessary, and execute its business plans. Changes in these assumptions or the Company’s ability to execute its plans could affect management’s going concern assessment and related disclosures.

Results of Operations for the years ended March 31, 2026 and 2025

The following tables summarize our results of operations for the years ended March 31, 2026 and 2025. 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.

Revenue

Total revenue for the year ended March 31, 2026 significantly increased by approximately $1.2 million, or approximately 28.6%, as compared with the year ended March 31, 2025. The increase was mainly due to revenue generated from the newly established business segment of consulting services.

Revenue generated from our garment manufacturing business contributed approximately $0.04 million, or approximately 0.8%, of our total revenue for the year ended March 31, 2026. Revenue generated from the segment contributed approximately $0.3 million, or approximately 6.8%, of our total revenue for the year ended March 31, 2025. The relatively low level of sales was mainly due to insufficient customer base. In addition, order volumes from the remaining customers were lower than in prior periods, while newly developed customers remained in the early stages of business development and had not yet generated significant sales.

Revenue generated from our logistics services business contributed approximately $3.2 million, or approximately 59.1%, of our total revenue for the year ended March 31, 2026. Revenue generated from the segment contributed approximately $3.0 million, or approximately 72.2%, of our total revenue for the year ended March 31, 2025. The increase of approximately $0.2 million was mainly due to market volatility.

Revenue generated from our property management and subleasing business was Nil for the year ended March 31, 2026. The segment was disposed of on July 1, 2025. The revenue from this segment before disposal has been reclassified as discontinued operations. Revenue generated from our property management and subleasing business contributed approximately $0.9 million, or approximately 21.0%, of our total revenue for the year ended March 31, 2025.

Revenue generated from our newly established business segment of consulting service contributed approximately $2.2 million, or 40.1% of our total revenue for the year ended March 31, 2026.

Cost of revenue