What the changes say
- Consulting is newly introduced, with concentrated customers, regulatory exposure, reliance on trust, and uncertain profitability.
- Going-concern risk is explicit after $4.0 million of 2026 net losses, versus $5.1 million in 2025.
- Garment revenue is more diversified by channel, but three customers still represented 34.6%, 30.7%, and 18.6%.
- The company now highlights Middle East geopolitical disruption, Nasdaq delisting exposure, and loss of emerging-growth-company reporting exemptions.
What changed since the prior 10-K
New
- New
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
Garment revenue is spread across channels, but three customers still contributed 34.6%, 30.7%, and 18.6%, creating customer-concentration risk.
- New
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
Consulting revenue is highly concentrated among three customers contributing 53.6%, 31.6%, and 13.4%, and customers can leave or reduce orders.
- New
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
Logistics depends on subcontractors whose shortages, delays, disruptions, or unfavorable terms could impair operations.
- New
Our consulting service line is newly developed and may not generate sustainable revenue or profitability
The consulting business began in 2026 and may not attract enough customers, qualified staff, or revenue to become profitable.
- New
Our consulting services may be affected by regulatory and licensing risks relating to insurance referral and related services
Insurance and related consulting referrals may trigger licensing, anti-money-laundering, data-protection, and consumer-protection requirements across jurisdictions.
- New
We depend on customer trust, third-party service providers and private-domain customer resources for our consulting business
Consulting depends on customer trust, private-domain customer resources, service quality, and third parties; complaints, disputes, or data leakage could damage growth.
- New
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
PRC restrictions and limited regulatory cooperation may hinder U.S. authorities’ investigations, evidence gathering, or enforcement against China-based operations and executives.
- New
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
Losing emerging-growth-company status brings additional reporting, internal-control, governance, and compliance costs and increases potential enforcement exposure.
- New
Substantial doubt exists regarding our ability to continue as a going concern
Operating losses and cash-flow challenges raise substantial doubt about continuing as a going concern within one year.
- New
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
Middle East conflicts could disrupt shipping, energy, trade, supply chains, inventory, raw materials, currencies, and transportation costs.
- NewRisks Related to our Common Stock
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
Nasdaq delisting could subject the stock to penny-stock rules, making transactions more difficult and reducing liquidity and market price.
- NewRisks Related to 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
Conversion of outstanding securities and future equity-linked financing could substantially dilute existing shareholders and depress the stock price.
Dropped
- Dropped
Our top customers accounted for a major portion of our total revenue for the years ended March 31, 2025 and 2024 and may materially adversely affect our financial condition and results of operations
- Dropped
We may be exposed to concentration risk due to heavy reliance on third-party contractors for our logistic business, and any shortage of third-party contractors may significantly impact our business and results of operation
- Dropped
Competition for tenants could impact our occupancy rates
- Dropped
Our performance depends on our ability to collect rent from tenants, including anchor tenants, our tenants’ financial condition and our tenants maintaining leases for our properties
- Dropped
Subleasing to smaller and growth-oriented businesses could adversely affect our cash flow and results of operations
- Dropped
There are uncertainties under the PRC Securities Law relating to the procedures and requisite timing for the U.S. securities regulatory agencies to conduct investigations and collect evidence within the territory of the PRC
- Dropped
We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors
Concentration in top garment and logistics customers, including one customer representing 54.1% of garment revenue.
- DroppedRisks Related to our Common Stock
In the event that our shares are traded, they may trade under $5.00 per share and thus will be a penny stock. Trading in penny stocks has many restrictions and these restrictions could severely affect the price and liquidity of our shares
- DroppedRisks Related to our Common Stock
Depending on market liquidity at the time, issuances and any subsequent sales of our common stock may cause the trading price of our common stock to fall
- DroppedRisks Related to our Common Stock
You may experience future dilution as a result of future equity offerings and other issuances of our securities
- DroppedRisks Related to our Common Stock
Any additional capital raised through the sale of equity or equity-backed securities may dilute our stockholders’ ownership percentages and could also result in a decrease in the market value of our equity securities
Reworded
- 96% rewritten
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
The risk shifts from controlling subcontractor reliance to specific subcontractor failure, shortages, delays, disruptions, and logistics revenue rising to 8.9% from 5.5%.
- 95% rewritten
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
Supplier and service-provider exposure broadened from five largest suppliers’ inventory purchases to procurement, rising to 45.7% from 41.4%, with costs added.
Was: We are exposed to concentration risk due to heavy reliance on our major supplier for the supply of our products, and any shortage of, or delay in, the supply may significantly impact our business and results of operation
- 94% rewritten
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
The company now says it has China trademark and copyright registrations and specifically identifies unauthorized use of brands, logos, websites, and domains.
Was: Our ability to adequately protect our trade names, trademarks and patents could have an impact on our brand images and ability to penetrate new markets
- 89% rewritten
You may have difficulty enforcing judgments against us
The update adds Hong Kong operations and U.S.-based independent directors while retaining difficulties serving foreign-resident executives and enforcing U.S. judgments.
- 85% rewritten
Failure to make adequate contributions to various employee benefits plans as required by PRC regulations may subject us to penalties
The disclosure updates the compliance date to March 31, 2026 and continues stating that employee-benefit contributions were adequate.
- 66% rewritten
PRC regulations regarding acquisitions impose significant regulatory approval and review requirements, which could make it more difficult for us to pursue growth through acquisitions
PRC acquisition review is updated to SAMR pre-notification and clearance requirements for concentrations meeting State Council turnover thresholds.
- 39% rewrittenRisks Relating to Our Holding Company Structure
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 disclosure now emphasizes potential SAFE foreign-exchange controls and restrictions on PRC subsidiaries remitting dividends or other payments.
Was: A portion of our revenue was generated by our PRC Subsidiaries in Renminbi, 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
- 38% rewrittenRisks 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
The disclosure continues describing uncertainty around the PRC Foreign Investment Law, its implementation regulations, and effects on the corporate structure and operations.
- 29% rewrittenRisks Related to our Common Stock
The market price of our Common Stock may be subject to fluctuation and you could lose all or part of your investment
- 27% rewrittenRisks Related to our Common Stock
Future sales of substantial amounts of the shares of Common Stock by existing stockholders could adversely affect the price of our Common Stock
- 27% rewritten
Natural disasters and other events beyond our control could materially adversely affect us
All 58 risk factors
Headings as the filing states them, in filing order.
Other
- 01Our success depends on our customers’ ability to market and sell their products manufactured by us
- 02Our future expansion plans are subject to uncertainties and risks
- 03If we are unable to create brand influence, we may face difficulties in attracting new business partners and clients
- 04Our ability to adequately protect our trade names, trademarks, copyrights and domain names could adversely affect our brand images and ability to expand our business94% rewritten
- 05We may be impacted by our ability to adequately source, distribute and sell merchandise and other materials in China
- 06Future 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
- 07A 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 operationsNew
- 08For 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, 2025New
- 09We 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 operations95% rewritten
- 10Any labor shortages, increased labor costs or other factors affecting labor supply for our production materials may materially and adversely affect our business operations
- 11We may be impacted by our ability to attract, develop and retain qualified associates and manage labor-related costs
- 12We 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
- 13Large and similar sized competitors could steal our market share by offering lower prices
- 14If 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
- 15We may be adversely affected by the performance of third-party contractors
- 16We 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 operationsNew
- 17If 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 affected96% rewritten
- 18Our insurance may not be sufficient
- 19Our consulting service line is newly developed and may not generate sustainable revenue or profitabilityNew
- 20Our consulting services may be affected by regulatory and licensing risks relating to insurance referral and related servicesNew
- 21We depend on customer trust, third-party service providers and private-domain customer resources for our consulting businessNew
- 22Our 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
- 23Additionally, 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
- 24We may be adversely impacted by certain compliance or legal matters
- 25Unauthorized 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
- 26Failure to make adequate contributions to various employee benefits plans as required by PRC regulations may subject us to penalties85% rewritten
- 27U.S. regulatory bodies may be limited in their ability to conduct investigations or inspections of the operations of our operating subsidiaries in mainland ChinaNew
- 28We are exposed to liabilities relating to environmental protection and safety laws and regulations
- 29If 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
- 30We also plan to establish a series of policies to reduce the likelihood of such events
- 31Currently 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
- 32We may require additional financing in the future and our operations could be curtailed if we are unable to obtain required additional financing when needed
- 33Natural disasters and other events beyond our control could materially adversely affect us27% rewritten
- 34We 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 companiesNew
- 35General Risks Associated with Business Operations in China
- 36To 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
- 37You may have difficulty enforcing judgments against us89% rewritten
- 38Foreign exchange fluctuations may affect our business
- 39Inflation could pose a risk to our business
- 40Changes 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
- 41There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations
- 42PRC regulations regarding acquisitions impose significant regulatory approval and review requirements, which could make it more difficult for us to pursue growth through acquisitions66% rewritten
- 43Our business may be subject to a variety of PRC laws and other obligations regarding cybersecurity and data protection
- 44We 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
- 45Restrictions on currency exchange may limit our ability to utilize our PRC revenue effectively
- 46The 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
- 47Introduction of new laws or changes to existing laws by the PRC government may adversely affect our business
- 48Substantial doubt exists regarding our ability to continue as a going concernNew
- 49Geopolitical conflicts involving the United States, Israel, Iran and other parties in the Middle East could adversely affect our business, financial condition and results of operationsNew
Risks Relating to Our Holding Company Structure
- 50Substantial 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 operations38% rewritten
- 51We 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
- 52A 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 us39% rewritten
Risks Related to our Common Stock
- 53We may never be able to pay dividends and are unlikely to do so
- 54Shareholders may be diluted significantly through our efforts to obtain financing and satisfy obligations through the issuance of securities
- 55If 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 affectedNew
- 56Future 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 StockNew
- 57Future sales of substantial amounts of the shares of Common Stock by existing stockholders could adversely affect the price of our Common Stock27% rewritten
- 58The market price of our Common Stock may be subject to fluctuation and you could lose all or part of your investment29% rewritten
Other Addentax Group 10-Ks
- FY2025 10-K risk factors57 risks
The company relies heavily on a single garment customer accounting for 54.1% of revenues in fiscal 2025. Operations depend significantly on CEO Mr. Hong Zhida, whose loss could severely harm the business. Most manufacturing, assets, and key executives are located in China, exposing the company to PRC regulatory and legal uncertainties.
Filed Jun 30, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.