As of September 30, 2024, Addentax Group Corp. reported total assets of $50.6 million, a decrease from $52.3 million as of March 31, 2024. Total current assets also declined to $28.3 million from $29.2 million, with accounts receivable dropping significantly from $2.1 million to $1.2 million. Conversely, inventories rose sharply from $63,505 to $191,708. Total current liabilities decreased from $4.6 million to $2.5 million, while convertible debts increased from $2.7 million to $3.2 million. The accumulated deficit widened from $(8.6 million) to $(10.5 million), and total equity fell from $26.0 million to $24.8 million.

For the three months ending September 30, 2024, revenues were $1.34 million, a slight increase from $1.34 million in the same period of 2023. However, for the six-month period, revenues decreased by 8.2% to $2.19 million from $2.39 million. Gross profit for the three months was $328,641, down from $402,887, while for the six months, it fell to $531,236 from $639,796. Operating expenses for the three months decreased to $(573,707) from $(707,819), but total operating expenses for the six months increased to $(1.28 million) from $(1.21 million). The company reported a net loss of $(721,532) for the three months, a stark contrast to a net income of $1.36 million in the same period of 2023. For the six months, the net loss increased to $(1.94 million) from $(1.37 million).

Strategically, the company disposed of its subsidiary, Shantou Yi Bai Yi Garment Co., Ltd., at the end of August 2024, incurring a loss of $334,135. This subsidiary will no longer engage in business with the company, although garment manufacturing will continue through other subsidiaries. The company also dissolved Shenzhen Yingxi Tongda Logistic Co., Ltd. in April 2024 and is in the process of dissolving another subsidiary, ZHJ.

In terms of cash flow, net cash provided by operating activities for the six months was $529,000, a significant improvement from $(1.58 million) in the prior year. However, net cash used in financing activities was $(416,000), compared to $2.70 million in the same period of 2023. As of September 30, 2024, the company had approximately $810,545 in cash and restricted cash.

The company continues to face challenges due to economic uncertainty in China, which has heightened clients' sensitivity to costs and could impact sales growth and operating margins. Management is implementing initiatives to strengthen internal controls and improve financial reporting, including hiring qualified accounting staff and engaging external consultants for compliance assistance.