Financial Analysis

5. BUSINESS COMBINATION On March 30, 2026, the Company completed the acquisition of 34,200,000 Shares of KMFG, a Nevada-incorporated company headquartered in Shenzhen, Peoples Republic of China. KMFG operates two core business segments: (i) an apparel and garment trading business focused on the wholesale distribution of mens and womens 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. The aggregate purchase price for the acquisition was approximately $ 5.5 million, which was satisfied through the transfer of a portion of an existing bond held by the Company. In connection with the consummation of the acquisition, the Company transferred a portion of such bond at closing, in the principal amount of approximately $ 5.5 million, to the Seller (or its designated counterparty) as consideration for the Shares. Following the completion of the acquisition, the Company holds approximately 62.18 % of the voting rights of the issued and outstanding shares of Keemo Fashion, on a fully diluted basis, and Keemo Fashion has become a controlled subsidiary of the Company. The Company recognized goodwill of $ 5,694,696 on this acquisition. The acquisition has been accounted …

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14. TAXATION (a) Enterprise Income Tax (EIT) The Company operates in multiple jurisdictions, including the Peoples Republic of China (PRC), Hong Kong, Seychelles and the United States, and is subject to the applicable tax laws in those jurisdictions. Yingxi Seychelles was incorporated in the Republic of Seychelles and, under the current laws of Seychelles, is not subject to income taxes. Yingxi HK is subject to Hong Kong Profits Tax. Under the two-tiered profits tax regime, the first HK$ 2 million of assessable profits is taxed at 8.25 %, with the remaining assessable profits taxed at 16.5 %. No provision for income taxes in Hong Kong has been made as Yingxi HK had no taxable income for the years ended March 31, 2026 and 2025. YX was incorporated in the PRC and is subject to an EIT tax rate of 25 %. No provision for income taxes in the PRC has been made as YX had no taxable income for the years ended March 31, 2026 and 2025. The Companys PRC operating subsidiaries are subject to the EIT Law of the PRC. The applicable statutory EIT rate is 25 %. Income taxes of the PRC subsidiaries were $ 4,106 and $ 4,649 for the years ended March 31, 2026 and 2025, respectively. The Companys parent entity, Addentax Group Corp., is a U.S. entity and is subject to the United States federal income tax. No provision for income taxes in the United States has been made as Addentax Group Corp. had no United States taxable income for the years ended March 31, 2026 and 2025. The reconciliation of inc …

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18. LEASES As a lessee Right-of-use asset and lease liabilities The Company implemented ASC 842, Leases, on April 1, 2019 using the modified retrospective approach and did not restate comparative periods. Under ASC 842, lease liabilities are recognized at the present value of future lease payments, with a corresponding right-of-use asset recognized for leases other than short-term leases. A single lease cost is recognized over the lease term on a generally straight-line basis. Cash payments for operating leases are classified as operating activities in the consolidated statements of cash flows. Prior to the disposal of HX on July 1, 2025, the Company leased its head office, plant, and dormitory under operating lease arrangements. The Company also leased several floors in a commercial building for its subleasing and property management services business. Certain leases included options to extend the lease term. The following table summarizes the components of lease expense: SCHEDULE OF LEASE EXPENSES 2026 2025 Operating lease cost 339,428 993,600 Short-term lease cost 126,419 131,520 Lease Cost 465,847 1,125,120 The following table summarizes supplemental information related to leases: SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASES 2026 2025 Cash paid for amounts included in the measurement of lease liabilities Operating cash flow used in operating leases $ 465,847 $ 1,125,120 Right-of-use assets obtained in exchange for new operating leases liabilities - Weighted aver …

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(p) Recently issued and adopted accounting pronouncements The Company reviews new accounting standards as issued by the Financial Accounting Standards Board, or FASB, and evaluates the potential impact of such standards on the Companys consolidated financial statements and related disclosures. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 requires enhanced disclosures about significant segment expenses and other segment items and applies to all public entities, including entities with a single reportable segment. The Company adopted ASU 2023-07 for the fiscal year ended March 31, 2026. The adoption of ASU 2023-07 did not have a material impact on the Companys consolidated financial position, results of operations or cash flows, but resulted in enhanced segment-related disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires enhanced income tax disclosures, including additional disaggregation of information in the rate reconciliation and income taxes paid by jurisdiction. The Company adopted ASU 2023-09 for the fiscal year ended March 31, 2026. The adoption of ASU 2023-09 did not have a material impact on the Companys consolidated financial position, results of operations or cash flows, but resulted in enhanced income tax-related disclosures. In November 2024, the FASB issued ASU 2024-03, Income St …

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6. RELATED PARTY TRANSACTIONS SCHEDULE OF RELATED PARTIES RELATIONSHIP WITH COMPANY Name of Related Parties Relationship with the Company Zhida Hong President, CEO, and a director of the Company Hongye Financial Consulting (Shenzhen) Co., Ltd. A company controlled by CEO, Mr. Zhida Hong Bihua Yang A legal representative of XKJ Jinlong Huang Management of HSW Yinping Ding Management of HSW & YS Wu Rui and Riches Affiliated Parties (1) Mr. Wu Rui is the Chief Operating Officer of the Company. The Riches Affiliated Parties are affiliated with Mr. Wu Rui and were involved in the Companys related-party share exchange transaction. KMFGs related parties KMFGs shareholders, directors and related parties (1) For purposes of this section, Riches Affiliated Parties refers to Riches FO Holdings Limited, Riches Family Office Limited and Riches Elite Technology (Shenzhen) Co., Ltd. Riches FO Holdings Limited is controlled by Mr. Wu Rui, the Companys Chief Operating Officer, and was the seller in the Companys related-party share exchange transaction involving Riches Family Office Limited. Riches Elite Technology (Shenzhen) Co., Ltd. is the operating subsidiary of Riches Family Office Limited. The Company leases Shenzhen XKJ office rent-free from Bihua Yang. Hongye Financial Consulting (Shenzhen) Co., Ltd. provided guarantee to the consideration receivable of transfer of a debt security to a third party. On May 15, 2026, the Company entered into a Share Exchange Agreement with Yingxi Ind …

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15. CONSOLIDATED SEGMENT DATA Segment information is consistent with how management reviews the businesses, makes investing and resource allocation decisions and assesses operating performance. The segment data presented reflects this segment structure. The Company reports financial and operating information in the following three segments: (a) Garment manufacturing . Including manufacturing and distribution of garments; (b) Logistics services . Providing logistic services; (c) Consulting. Providing consulting and advisory services, including insurance consulting and related customer service support. The property management and subleasing business was disposed of during the year and was not included as a continuing operating segment in the current year segment assessment. The Company also provides general corporate services to its segments and these costs are reported as Corporate and other. Selected information in the segment structure is presented in the following tables: SCHEDULE OF SEGMENT REPORTING FOR REVENUE Revenues from external customers 2026 2025 Year ended March 31, Revenues from external customers 2026 2025 Garments manufacturing segment 40,911 283,042 Logistics services segment 3,176,771 3,018,325 Consulting 2,153,501 - Others - - Property management and subleasing - 879,547 Total of reportable segments 5,371,183 4,180,914 Corporate and other - - Total consolidated revenue $ 5,371,183 $ 4,180,914 Income (loss) from operations by segment for year ended March 31, …

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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Use of Estimates The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from those estimates. (b) Principles of Consolidation The consolidated financial statements include the accounts of the Company and all subsidiaries, as discussed above. A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting powers; or has the power to appoint or remove the majority of the members of the board of directors; or to cast a majority of votes at the meeting of directors; or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. All significant intercompany balances and transactions have been eliminated in consolidation. (c) Business Combinations and Goodwill The Company accounts for business combinations in accordance with ASC 805, Business Combinations, using the acquisition method of accounting. The Company first evaluate …

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22. SUBSEQUENT EVENTS The Company evaluated subsequent events through June 29, 2026 , the date on which the consolidated financial statements were available to be issued. Equity Incentive Awards On March 24, 2026, the Compensation Committee approved fully vested share awards under the Companys 2024 Equity Incentive Plan to certain executive officers. The grant date for the awards was April 8, 2026, and the awards were fully vested and non-forfeitable as of such date. After giving effect to the Companys one-for-fifteen reverse stock split that became effective on March 30, 2026, the awards consisted of 66,667 shares of Common Stock to Wu Rui, the Companys Chief Operating Officer, and 12,222 shares of Common Stock to Hong Zhida, the Companys President, Chief Executive Officer, Secretary and Director. Acquisition of Time Is Loan Limited On April 22, 2026, Yingxi Industrial Chain Investment Co., Ltd. (Yingxi HK), the Companys wholly owned Hong Kong subsidiary, entered into a Share Exchange Agreement with the sole shareholder of Time Is Loan Limited (Time Is Loan), a Hong Kong company, to acquire 100 % of the equity interests in Time Is Loan. As consideration, the Company agreed to issue 137,790 shares of its common stock to the seller. On May 15, 2026, the acquisition was completed. As of the date these consolidated financial statements were available to be issued, the Company is evaluating the accounting impact of the acquisition, and accordingly, the financial effects of the ac …

SubsequentEventsTextBlock · excerpt; the full note is in the filing