ADDENTAX GROUP CORP.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND BUSINESS ACQUISITIONS

Addentax Group Corp. (the “Company”), through its consolidated subsidiaries (the Company and its consolidated subsidiaries, collectively, the “Group”), is engaged in garment manufacturing, logistics services, consulting services and financing services. The Company conducts its garment manufacturing and logistics services businesses primarily through its PRC operating subsidiaries, its consulting services business through Yingxi Industrial Chain Investment Co., Ltd. (“Yingxi HK”), and its financing services business through Time Is Loan Limited (“Time Is Loan”), a Hong Kong company and licensed money lender acquired on May 15, 2026.

As of June 30, 2026, the Company’s principal subsidiaries consisted of the following entities:

KMFG was acquired near the end of the fiscal year ended March 31, 2026. As of June 30, 2026, KMFG’s revenue contribution was not significant, and management does not currently present KMFG as a separate business line or reportable segment.

2. BASIS OF PRESENTATION

In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. All significant intercompany transactions and balances are eliminated in consolidation. However, the results of operations included in such financial statements may not necessarily be indicative of annual results.

The Company uses the same accounting policies in preparing quarterly and annual financial statements. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2026 filed with the Securities and Exchange Commission (“SEC”) on June 29, 2026 (“2026 Form 10-K”).

The results of the property management and subleasing business for the three months ended June 30, 2025 have been retrospectively reclassified to discontinued operations for all periods presented. The reclassification had no effect on consolidated net loss, comprehensive loss, total equity or cash flows for the prior-year period.

For the three months ended June 30, 2025, the property management and subleasing business classified as discontinued operations generated revenue of $154,600 and a loss, net of income taxes, of $261,166. No income tax expense or benefit was allocated to discontinued operations. The Company had no discontinued operations for the three months ended June 30, 2026.

Going Concern

As disclosed in the Company’s 2026 Form 10-K, the Company has a history of net losses and operating losses, which raised substantial doubt about its ability to continue as a going concern. During the three months ended June 30, 2026, the Company reported net income primarily as a result of a non-cash fair value gain on derivative liabilities; however, the Company continued to incur a loss from operations and negative cash flows from operating activities.

The Company’s ability to continue as a going concern depends on management’s ability to improve operating results, manage operating costs, collect receivables, develop its consulting and financing services businesses and obtain additional financing when necessary. Management continues to pursue these plans. There can be no assurance that these efforts will be successful or that additional financing will be available on acceptable terms, or at all. The unaudited condensed consolidated financial statements have been prepared on a going concern basis and do not include any adjustments that might result from the outcome of this uncertainty.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of the 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 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.

Stock-Based Compensation

The compensation expense for all share-based payment awards made to employees and directors, including stock options and restricted stock units (“RSUs”) is measured and recognized based on the fair value of the awards on the date of grant. The compensation expense, net of estimated forfeitures, is recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the award. The fair value of RSUs is determined based on the closing market price of our common stock on the date of grant.

Loan and interest income

Loans receivable are reported at amortized cost, net of an allowance for expected credit losses. Interest income is recognized over the contractual term of the loans based on the outstanding principal and the applicable contractual interest rate or effective yield, as appropriate. The Company places a loan on nonaccrual status when management determines that collection of contractual principal or interest is no longer reasonably assured and resumes interest accrual when the loan becomes current and management determines that collection of principal and interest is reasonably assured.

Allowance for expected credit losses

The allowance for expected credit losses on loans receivable represents management’s estimate of credit losses expected over the contractual life of the loans. Management estimates expected credit losses using relevant information regarding historical loss experience, borrower credit profiles, repayment and delinquency status, current portfolio conditions, collateral values, if applicable, and reasonable and supportable forecasts of future economic conditions. Loans with similar risk characteristics are evaluated on a collective basis, while loans that no longer share similar risk characteristics are evaluated individually. Loans are written off against the allowance when management determines that they are uncollectible in accordance with the Company’s policy.

There were no other changes to the Company’s significant accounting policies during the three months ended June 30, 2026.

Recently issued accounting pronouncements

In November 2025, the FASB issued ASU 2025-08, Financial Instruments—Credit Losses (Topic 326): Purchased Loans. ASU 2025-08 expands the gross-up approach for accounting for acquired loans to certain purchased seasoned loans. The amendments are effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

Management has not identified any other recently issued accounting standards that are expected to have a material impact on the Company’s condensed consolidated financial statements or related disclosures.

**4. BUSINESS COMBINATION **

On May 15, 2026, the Company completed the transaction contemplated by the Share Exchange Agreement dated April 22, 2026 (the “Share Exchange Agreement”), by and among the Company, Yingxi Industrial Chain Investment Co., Ltd (“Yingxi HK”), a wholly owned subsidiary of the Company incorporated under the laws of Hong Kong, Time Is Loan Limited, a company incorporated under the laws of Hong Kong, and Ms. OR Shan Shan, the Seller. Pursuant to the Share Exchange Agreement, Yingxi HK acquired 100% of the equity interests of Time Is Loan Limited from the Seller in exchange for the issuance of 137,790 shares of common stock of the Company, par value $0.001 per share to the Seller.

Time Is Loan provides consumer and commercial lending services in Hong Kong. Its principal products include short-term unsecured personal loans and, where applicable, collateral-backed loans and lending arrangements with other licensed credit providers.

The Company recognized goodwill of $200,442 on this acquisition. The acquisition has been accounted for under the acquisition method of accounting in accordance with ASC 805, “Business Combinations”. The results of Time Is Loan Limited’s operations have been included in the consolidated financial statements since its acquisition date.

The following table summarizes the fair values of the assets acquired and liabilities assumed as of the date of acquisition. This table represents the initial accounting for the acquisition. These provisional amounts may be adjusted in the measurement period (that will not exceed one year from the acquisition):

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

5. RELATED PARTY TRANSACTIONS

The Company leases XKJ’s office rent-free from Bihua Yang.

Hongye Financial Consulting (Shenzhen) Co., Ltd. provided a guarantee to the consideration receivable for the transfer of a debt security to a third party.

On May 15, 2026, the Company entered into a Share Exchange Agreement with Yingxi Industrial Chain Investment Co., Ltd., Riches Family Office Limited, Riches FO Holdings Limited and Mr. Wu Rui, the Company’s Chief Operating Officer and sole shareholder of Riches FO Holdings Limited.

Pursuant to the agreement, Yingxi HK agreed to acquire 41.67% of the issued and outstanding equity interests of Riches Family Office Limited from Riches FO Holdings Limited in exchange for the issuance by the Company of 33,500 shares of Common Stock to Mr. Wu Rui. The transaction constitutes a related-party transaction and was approved by the Audit Committee and the Board of Directors on May 15, 2026.

The Company had the following related party balances as of June 30, 2026 and March 31, 2026:

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

6. DEBT SECURITIES HELD-TO-MATURITY

The Company purchased a note issued by a third-party investment company on August 24, 2022 with a principal amount of $17.5 million. The note bears interest at a rate of 2.5% per annum and is renewable on an annual basis. The debt is guaranteed by Hongye Financial Consulting (Shenzhen) Co., Ltd., a company controlled by the Company’s CEO, Mr. Hong Zhida.

As of June 30, 2026 and March 31, 2026, accrued coupon interest receivable amounted to $437,500 and $437,500, respectively.

On March 30, 2026, the Company completed the acquisition of 62.18% of the outstanding ordinary shares of Keemo Fashion Group Limited (“KMFG”). As consideration for the acquisition, the Company transferred a portion of the note with a principal amount of approximately $5.5 million to the seller. Following the transfer, the remaining principal balance of the debt security held by the Company was $12.0 million as of March 31, 2026 and remained unchanged as of June 30, 2026.

7. INVENTORIES

Inventories consist of the following as of June 30, and March 31, 2026:

8. ADVANCES TO SUPPLIERS

The Company has made advances to third-party suppliers in advance of receiving inventory parts. These advances are generally made to expedite the delivery of required inventory when needed and to help to ensure priority and preferential pricing on such inventory. The amounts advanced to suppliers are fully refundable on demand.

The Company reviews a supplier’s credit history and background information before advancing a payment. If the financial condition of its suppliers were to deteriorate, resulting in an impairment of their ability to deliver goods or provide services, the Company would recognize bad debt expense in the period they are considered unlikely to be collected.

9. PREPAYMENTS AND OTHER RECEIVABLES

Prepayments and other receivables consist of the following as of June 30 and March 31, 2026:

10. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of the following as of June 30 and March 31, 2026:

Depreciation expense for the three months ended June 30, 2026 and 2025 was $20,384 and $18,055, respectively.

11. INVESTMENT IN AN ASSOCIATED COMPANY

The Company holds a 41.67% equity interest in Riches Family Office Limited (“Riches Family”) and accounts for the investment under the equity method of accounting. The Company completed the acquisition of its interest in Riches Family on June 15, 2026. The Company recognizes its proportionate share of the post-acquisition results of Riches Family in its condensed consolidated statements of operations. No impairment loss was recognized in connection with the investment during the three months ended June 30, 2026.

The carrying amounts as at June 30, 2026 and March 31, 2026 are as follows:

Details of the associated company are as follows:

The summarized financial information of the associated company is as follows:

Movement of the carrying value of investment in the associated company:

12. SHORT-TERM BANK LOAN

In August 2019, HSW entered into a facility agreement with Agricultural Bank of China and obtained a line of credit, which allows the Company to borrow up to approximately $147,140 (RMB 1,000,000) for daily operations. The loans are guaranteed at no cost by the legal representative of HSW. As of June 30, 2026, the Company has borrowed $138,938 (RMB 944,255) (March 31, 2026: $136,593) under this line of credit with various annual interest rates from 4.34% to 4.9%. The outstanding loan balance was due on September 30, 2021. The Company was not able to renew the loan facility with the bank. The Company is negotiating with the bank on repayment schedule of the loan balance and interest payable.

In February 2023, XKJ entered into a facility agreement with China Construction Bank and obtained a line of revolving credit, which allows the Company to borrow up to approximately $1,324,263 (RMB 9,000,000) for daily operations, with Loan Prime Rate of the day prior to the draw down day. The loans are guaranteed by the legal representative of XKJ at no cost. As of June 30, 2026, the Company has borrowed $581,204 (RMB 3,950,000) (March 31, 2026: $535,231 (RMB 3,700,000)) under this line of credit with annual interest rate of 3.9%. The revolving credit facility was renewed in November 2025 and the new expiration date will be November 25, 2028..

13. TAXATION

The Company operates in multiple jurisdictions, including the People’s 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 three months ended June 30, 2026 and 2025.

YX was incorporated in the PRC and is subject to the EIT tax rate of 25%. No provision for income taxes in the PRC has been made as YX had no taxable income for the three months ended June 30, 2026 and 2025.

The Company’s 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 $2 and $764 for the three months ended June 30, 2026 and 2025, respectively.

YX’s parent entity, Addentax Group Corp. is a U.S. entity and is subject to the United States federal income tax. No provision for income taxes in the United States has been made as Addentax Group Corp. had no U.S. taxable income for the three months ended June 30, 2026 and 2025.

The reconciliation of income taxes computed at the PRC statutory tax rate applicable to the PRC, to income tax expenses are as follows:

Deferred tax assets had not been recognized in respect of any potential tax benefit that may be derived from non-capital loss carry forward and property and equipment due to past negative evidence of previous cumulative net losses and uncertainty upon restructuring. The management will continue to assess at each reporting period to determine the realizability of deferred tax assets.

In accordance with the relevant taxation laws in the PRC, the normal VAT rate for domestic sales is 13%, which is levied on the invoiced value of sales and is payable by the purchaser. Companies are required to remit the VAT they collect to the tax authority. A credit is available whereby VAT paid on purchases can be used to offset the VAT due on sales.

For services, the applicable VAT rate is 9% under the relevant tax category for logistic company, except the branch of PF enjoyed the preferential VAT rate of 3% in 2026 and 2025. The Company is required to pay the full amount of VAT calculated at the applicable VAT rate of the invoiced value of sales as required. A credit is available whereby VAT paid on gasoline and toll charges can be used to offset the VAT due on service income.

The Company’s consulting service is conducted through Yingxi HK, the Company’s Hong Kong subsidiary. Hong Kong does not impose value-added tax, goods and services tax or sales tax. Accordingly, the consulting service conducted through Yingxi HK is not subject to VAT in Hong Kong.

14. CONSOLIDATED SEGMENT DATA

Segment information is consistent with how the Company’s chief operating decision maker (“CODM”) reviews the businesses, makes investing and resource allocation decisions and assesses operating performance. The Company’s CODM is the Chief Executive Officer. The CODM assesses the performance of the Company’s reportable segments and allocates resources primarily based on income (loss) from operations. The segment data presented reflects this segment structure. The Company reports financial and operating information in the following four segments:

The Company also provides general corporate services to its segments and these costs are reported as “Corporate and other”.

Selected information in the segment structure is presented in the following tables:

Revenues from continuing operations by segment for the three months ended June 30, 2026 and 2025 are as follows:

Income (loss) from continuing operations by segment for the three months ended June 30, 2026 and 2025 are as follows:

Other segment items from continuing operations by segment for the three months ended June 30, 2026 and 2025 are as follows:

Total assets by segment as of June 30 and March 31, 2026 are as follows:

Geographical Information

The Company operates predominantly in China. In presenting information on the basis of geographical location, revenue is based on the geographical location of customers and long-lived assets are based on the geographical location of the assets.

15. FINANCIAL INSTRUMENTS

On January 4, 2023, the Company entered into a series of agreements with certain accredited investors, pursuant to which the Company received net proceeds of $15,000,000 in consideration of the issuance of:

The Warrants are considered a freestanding instrument issued together with the Convertible Notes and measured at their issuance date fair value. Proceeds received were first allocated to the Warrants based on their initial fair value. The initial fair value of the Warrants was $3.9 million. The Warrants were marked to the market with the changes in the fair value of warrant recorded in the consolidated statements of operations and comprehensive loss. As of June 30, 2026, the balance of the Warrants was approximately $1.5 million (March 31, 2026: $4.1 million).

The Convertible Notes are classified as a liability and are subsequently stated at amortized cost with any difference between the initial carrying value and the repayment amount as interest expenses using the effective interest method over the period from the issuance date to the maturity date. The embedded conversion feature should be bifurcated and separately accounted for using fair value, as this embedded feature is considered not clearly and closely related to the debt host. The bifurcated conversion feature was recorded at fair value with the changes recorded in the consolidated statements of operations and comprehensive loss. The initial fair value of the embedded conversion feature was $1.2 million. As of June 30 and March 31, 2026, the fair value of the conversion option was both $Nil.

The Company determined that the other embedded features do not require bifurcation as they either are clearly and closely related to the Convertible Notes or do not meet the definition of a derivative.

The total proceeds of the Convertible Notes and the Warrants, net of issuance cost, of $15.0 million were received by the Company in January 2023, and allocated to each of the financial instruments as follows:

In January 2023, the Company also granted to the placement agent a warrant as partial payment of an agency fee to purchase 0.7 million shares of Common Stock of the Company. The warrant matures infive years with an exercise price of $1.25 subject to adjustments under different conditions. The warrant was recognized as a derivative liability with an initial fair value of $0.168 million.

The Company’s Convertible Notes’ obligations were as the following for the three months ended June 30, 2026 and 2025:

There were no Convertible Notes outstanding during the three months ended June 30, 2026. During the three months ended June 30, 2025, $2.3 million of Convertible Notes was converted into approximately 4.3 million shares of Common Stock, with an average effective conversion price of $0.5363 per share.

The Company’s derivative liabilities were as the following for the three months ended June 30, 2026 and 2025:

16. LEASE

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:

The following table summarizes supplemental information related to leases:

The Company had no operating lease liabilities as of June 30, 2026 and no operating lease liabilities for the following five years and thereafter, as Dongguan Hongxiang Commercial Co., Ltd. (“HX”), the Company’s former property management and subleasing subsidiary, was disposed of on July 1, 2025.

As a lessor

The Company subleased its leased commercial building by entering into operating leases with third party garment wholesalers and retailers. These leases are negotiated for terms ranging from one to five years. All leases include the term to enable upward revision of the rental charge on an annual basis according to prevailing market conditions.

Rental income from subleasing is disclosed in Note 14 segment data.

There will be no future rental income as HX, the subsidiary conducting the subleasing and property management services business was disposed of on July 1, 2025.

17. SHARE CAPITAL AND RESERVE

Common Stock

In August 2022, the Company completed its IPO and 333,333 Common Stock were issued and sold to the public, with proceeds of approximately $20.2 million, net of underwriter commissions and relevant offering expenses.

In September 2022,26,111 shares were issued upon cashless exercise of Underwriter Warrants.

On February 3, 2023,224,667 shares were issued as pre-delivery shares to the placement agents.

In January 2023, the Company increased its authorized share capital and the authorized share capital is $250,000 divided into 250,000,000 shares of Common Stock with par value of US$0.001 per share.

The Company effected the amendment and combination to the outstanding shares of its Common Stock into fewer number of outstanding shares (the “Reverse Stock Split Amendment”) at a ratio ofone-for-ten, with effect on June 26, 2023. As a result, the number of shares was reduced by 33,655,839 shares.

After the Reverse Stock Split Amendment, the Company issued 109,613 shares of Common Stock with par value of US$0.001 per share.

On April 29, 2024, the Company entered into two private placement agreements (the “Agreements”) with certain individual investors (the “Investors”) who are independent third parties, pursuant to which the Company issued to each of the Investors 22,000 shares of its Common Stock, par value $0.001 per share, at a price of $0.98 per share, resulting in aggregate gross proceeds to the Company of $646,800, which closed on the same day. Pursuant to the Agreements, the Company issued an aggregate of 44,000 unregistered shares of Common Stock to the Investors.

On August 11, 2025, the Company issued and granted 10,778 shares of Common Stock to directors and executive officers pursuant to the Company’s 2024 Equity Incentive Plan. These incentive shares vested immediately. The stock-based compensation expense recognized in connection with these shares was $70,001.

On March 30, 2026, the Company effected a reverse stock split of its outstanding shares of common stock at a ratio ofone-for-fifteen. As a result of the reverse stock split, every fifteen shares of common stock outstanding immediately prior to the effective time were reclassified and combined into one share of common stock, without any change in the par value of $0.001 per share or the total number of authorized shares. No fractional shares were issued in connection with the reverse stock split, and stockholders who would otherwise have been entitled to receive a fractional share received one whole share of common stock in lieu of such fractional share.

In accordance with ASC 260-10-55-12, all share and per share amounts for all periods presented in the accompanying consolidated financial statements, including the consolidated statements of changes in stockholders’ equity, have been retroactively adjusted to reflect the reverse stock split for comparative purposes. Specifically, the number of shares of common stock outstanding at the beginning and end of each period, as well as all share issuances and repurchases occurring during the periods presented in the prior year’s statement of changes in stockholders’ equity, have been restated to reflect the reduced number of shares outstanding as if the reverse stock split had occurred at the beginning of the earliest period presented.

All share counts, weighted-average shares outstanding, basic and diluted net loss per share, share-based awards, warrants, convertible preferred stock conversion amounts and other share-related information for all periods presented in these consolidated financial statements have been retrospectively adjusted to reflect the reverse stock split and to maintain period-to-period comparability. The reverse stock split did not affect the Company’s total stockholders’ equity.

On March 24, 2026, the Compensation Committee approved fully vested share awards under the Company’s 2024 Equity Incentive Plan. The grant date of the awards was April 8, 2026. After giving effect to the Company’s one-for-fifteen reverse stock split, the awards consisted of 66,667 shares of Common Stock granted to Wu Rui and 12,222 shares granted to Hong Zhida. The awards were fully vested and non-forfeitable on the grant date. The Company recognized stock-based compensation expense of approximately $451,245 based on the grant-date fair value of the awards.

On May 15, 2026, the Company acquired 100% of the equity interests of Time Is Loan Limited, a company incorporated under the laws of Hong Kong, from the Seller in exchange for the issuance of 137,790 shares of common stock of the Company, par value $0.001 per share to the Seller.

On June 15, 2026, the Company acquired 41.67% of the equity interests of Riches Family Office Limited, a company incorporated under the laws of Hong Kong, from the seller in exchange for the issuance of 33,500 shares of common stock of the Company, par value $0.001 per share (the “Shares”).

There were 1,031,435 and 781,256 shares of Common Stock issued and outstanding as of June 30, 2026 and March 31, 2026, respectively.

Statutory reserve

In accordance with the relevant laws and regulations of the PRC, a subsidiary of the Company established in the PRC is required to transfer 10% of its profit after taxation prepared in accordance with the accounting regulations of the PRC to the statutory reserve until the reserve balance reaches 50% of the subsidiary’s paid-up capital. Such reserve may be used to offset accumulated losses or increase the registered capital of the subsidiary, subject to the approval from the PRC authorities, and are not available for dividend distribution to the shareholders. The amount appropriated to statutory reserve for the quarters ended June 30, 2026 and June 30, 2025 was $793 and $402, respectively. The balance of paid-up statutory reserve was $38,215 and $37,422 as of June 30, 2026 and March 31, 2026, respectively.

18. RISKS AND UNCERTAINTIES

The Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy.

The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation.

The Company’s reporting currency is the U.S. dollar. The functional currency of the parent company is the U.S. dollar and the functional currency of the Company’s operating subsidiaries is the Chinese Renminbi (“RMB”). For the subsidiaries whose functional currencies are the RMB, all assets and liabilities are translated at exchange rates at the balance sheet date, which was 6.80 and 6.91 as of June 30, 2026 and March 31, 2026, respectively. Revenue and expenses are translated at the average yearly exchange rates, which was 6.806 and 7.231 for the three months ended June 30, 2026 and 2025, respectively. Equity is translated at historical exchange rates. Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustments to other comprehensive loss, a component of equity.

The following are the percentages of accounts receivable balance of the top customers over accounts receivable for each segment as of June 30, 2026 and March 31, 2026.

Garment manufacturing segment

The concentration as of June 30, 2026 and March 31, 2026 was attributable to the remaining accounts receivable balance being due from a single customer. The Company did not generate revenue from its garment manufacturing business during the three months ended June 30, 2026.

Logistics services segment

Consulting services segment

Financing services segment

As of June 30, 2026, no individual borrower accounted for more than 10% of the gross loan receivables of the financing services business.

Concentration on customers

For the three months ended June 30, 2026, one customer from the consulting service segment provided more than 10% of total consolidated revenue of the Company, representing 60.8% of total revenue of the Company.

For the three months ended June 30, 2025, three customers from the logistics services segment each accounted for more than 10% of revenue from continuing operations and, in the aggregate, represented approximately 53.9% of the Company’s revenue from continuing operations for the period.

Concentration on suppliers

The following tables summarize the purchases from five largest suppliers of each of the reportable segments for the three months ended June 30, 2026 and 2025.

The Company’s exposure to interest rate risk primarily relates to the interest expenses on our outstanding bank borrowings and the interest income generated by cash invested in cash deposits and liquid investments. As of June 30, 2026, the total outstanding bank borrowings amounted to $720,142 (RMB 4,894,255) with various interest rates from 4.34% to 16.2% p.a. (Note 12)

19. SUBSEQUENT EVENTS

The Company evaluated subsequent events occurring after June 30, 2026 through the date on which these unaudited condensed consolidated financial statements were issued.

Loan Conversion Agreement

On July 27, 2026, the Company entered into a Loan Conversion Agreement with Seah Chia Yee, pursuant to which the Company agreed to convert outstanding loan principal of $699,885, together with $3,500 of accrued and unpaid interest, into 146,539 shares of the Company’s common stock at a conversion price of $4.80 per share. The closing of the transaction was subject to customary closing conditions, including applicable Nasdaq requirements. On August 11, 2026, the Company issued 146,539 shares of common stock to Seah Chia Yee, upon which the outstanding loan principal and accrued interest were fully satisfied and cancelled.

Private Placements

On July 28, 2026, the Company entered into a private placement agreement with Pinnacle Partners Inc., pursuant to which the Company agreed to issue and sell 250,000 shares of its common stock at a purchase price of $4.80 per share for aggregate gross proceeds of approximately $1.2 million. The closing of the private placement is subject to customary closing conditions.

On July 30, 2026, the Company entered into separate private placement agreements with Mr. Hong Zhihao, Mr. Hong Zhiwang and Mr. Yip Wai Lun, pursuant to which the Company agreed to issue and sell an aggregate of 677,084 shares of its common stock at a purchase price of $4.80 per share for aggregate gross proceeds of approximately $3.25 million. Mr. Hong Zhihao and Mr. Hong Zhiwang are related parties of the Company. The related party subscriptions were reviewed and approved by the Audit Committee and the Board of Directors. The closing of the private placements is subject to customary closing conditions.

Other than the foregoing, the Company did not identify any material subsequent events requiring recognition or disclosure in the unaudited condensed consolidated financial statements through the date the financial statements were issued.