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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended
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Mar. 31, 2026
Accounting Policies [Abstract] |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 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 evaluates whether an acquired set of activities and assets constitutes a business, including whether the acquired set includes inputs and substantive processes that together significantly contribute to the ability to create outputs. The Company also considers whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, as applicable. For acquisitions that are accounted for as business combinations, the Company recognizes, separately from goodwill, the identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquiree at their estimated acquisition-date fair values. The purchase consideration transferred is measured at fair value as of the acquisition date. The excess of the purchase consideration transferred and the fair value of any noncontrolling interest in the acquiree over the fair value of the identifiable net assets acquired and liabilities assumed is recorded as goodwill. If the fair value of the identifiable net assets acquired exceeds the purchase consideration transferred and the fair value of any noncontrolling interest, the Company recognizes a bargain purchase gain after reassessing whether all assets acquired and liabilities assumed have been properly identified and measured. Acquisition-related costs, including legal, accounting, valuation and other professional fees, are expensed as incurred and included in general and administrative expenses. When the initial accounting for a business combination is incomplete by the end of the reporting period in which the acquisition occurs, the Company reports provisional amounts for the items for which the accounting is incomplete. During the measurement period, which shall not exceed one year from the acquisition date, the Company adjusts the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date and, if known, would have affected the measurement of the amounts recognized as of that date. Goodwill represents the excess of the purchase consideration transferred and the fair value of any noncontrolling interest over the estimated fair value of identifiable net assets acquired and liabilities assumed in a business combination. Goodwill is not amortized, but is tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. The Company evaluates goodwill for impairment at the reporting unit level. The Company may first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative assessment indicates that it is more likely than not that the carrying amount exceeds fair value, or if the Company elects to bypass the qualitative assessment, the Company performs a quantitative impairment test. An impairment loss is recognized to the extent that the carrying amount of the reporting unit exceeds its fair value, limited to the carrying amount of goodwill allocated to that reporting unit. (d) Fair Value Measurement ASC 820, Fair Value Measurement, defines fair value, establishes a framework for measuring fair value and requires enhanced disclosures about fair value measurements. The statement clarifies that the exchange price is the price in an orderly transaction between market participants to sell the asset or transfer the liability in the market in which the reporting entity would transact for the asset or liability, that is, the principal or most advantageous market for the asset or liability. It also emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and that market participant assumptions include assumptions about risk and effect of a restriction on the sale or use of an asset. This ASC establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). The Company has derivative liabilities, embedded conversion feature and warrants that are not traded in an active market with readily observable quoted prices, and therefore the Company used significant unobservable inputs (Level 3) to measure the fair value of these options and derivative liabilities at inception and at each subsequent balance sheet date. The change in fair value is recognized in the consolidated statement of operations and comprehensive loss during the year ended March 31, 2026. The Company’s financial instruments include cash, accounts receivable, advances to suppliers, other receivables, accounts payable, other payables, taxes payables and related party receivables or payables. Management estimates that the carrying amounts of financial instruments approximate their fair values due to their short-term nature. The fair value of amounts with related parties is not practicable to estimate due to the related party nature of the underlying transactions. (e) Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. All cash and cash equivalents relate to cash on hand and cash at bank at March 31, 2026 and 2025. The Renminbi is not freely convertible into foreign currencies. Under the PRC Foreign Exchange Control Regulations and Administration of Settlement, Sales and Payment of Foreign Exchange Regulations, the Company is permitted to exchange Renminbi for foreign currencies through banks that are authorized to conduct foreign exchange business. (f) Accounts Receivable, net Accounts receivable, net are stated at the historical carrying amount net of allowance for doubtful accounts. Accounts receivable are classified as financial assets subsequently measured at amortized cost. Accounts receivable are recognized when the Company becomes a party to the contractual provisions of the receivables. They are measured, at initial recognition, at fair value plus transaction costs, if any and are subsequently measured at amortized cost. The amortized cost is the amount recognized on the receivable initially, minus principal repayments, plus cumulative amortization (interest) using the effective interest method of any difference between the initial amount and the maturity amount, adjusted for any loss allowance. A loss allowance for expected credit losses is recognized on account receivables and is updated at each reporting date. The Company determines the expected credit losses provisions based on ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (‘‘ASC 326’’) using a modified retrospective approach which did not have a material impact on the opening balance of accumulated deficit. To determine expected credit losses on accounts receivable, the Company will consider the historic credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions, and an assessment of both the current and forecasted direction of conditions at the reporting date, including the time value of money, where appropriate. The loss allowance is calculated on a collective basis for all trade and other receivables in totality. An impairment gain or loss is recognized in profit or loss with a corresponding adjustment to the carrying amount of account receivables, through use of a loss allowance account. The impairment loss is included in operating expenses as a movement in credit loss allowance. Allowance for doubtful accounts was $51,629 and 49,457 for the years ended March 31, 2026 and 2025. Receivables are written off when there is information indicating that the counterparty is in severe financial difficulty and there is no realistic prospect of recovery, e.g., when the counterparty has been placed under liquidation or has entered into bankruptcy proceedings. Receivables written off may still be subject to enforcement activities under the Company’s recovery procedures, considering legal advice where appropriate. Any recoveries made are recognized in profit or loss. There is no change in the accounting policies for the year ended March 31, 2026. (g) Inventories Manufacturing segment inventories consist of raw materials, work in progress and finished goods and are stated at the lower of cost, determined on a weighted average basis, or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated costs necessary to make the sale. When inventories are sold, their carrying amount is charged to expense in the period in which the revenue is recognized. Write-downs for declines in net realizable value or for losses of inventories are recognized as an expense in the period the impairment or loss occurs. No inventory write-downs were recognized during the years ended March 31, 2026 and 2025. (h) Plant and Equipment Plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over the assets’ estimated useful lives, using the straight-line method. Estimated useful lives of the plant and equipment are as follows: SCHEDULE OF PLANT AND EQUIPMENT USEFUL LIVES
Production plant |  | 5-10 years
Motor vehicles |  | 10-15 years
Office equipment |  | 5-10 years
The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statement of loss and comprehensive loss. The cost of maintenance and repairs is charged to the statement of income as incurred, whereas significant renewals and betterments are capitalized. (i) Accounting for the Impairment of Long-Lived Assets Long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. It is reasonably possible that these assets could become impaired as a result of technology or other industry changes. Determination of recoverability of assets to be held and used is by comparing the carrying amount of an asset to future net undiscounted cash flows to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. There was no impairment of long-lived assets as of March 31, 2026 and 2025. (j) Revenue Recognition Revenue from continuing operations is generated primarily from garment manufacturing, logistics services and consulting services. The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company applies the following five-step model to recognize revenue from contracts with customers: (i) identification of the contract with the customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when, or as, the Company satisfies the performance obligations. The following table summarizes the Company’s major revenue streams for the years ended March 31, 2026 and 2025: SCHEDULE OF MAJOR REVENUE STREAMS
Type of Revenue |  | Amount for the year ended March 31, 2026 |  |  | Amount for the year ended March 31, 2025 |  |  | Principal/Agent Assessment |  | Timing of Revenue Recognition
Garment Manufacturing Business |  | $ | 40,911 |  |  | $ | 283,042 |  |  | Principal |  | Point in time
Logistics Service |  | $ | 3,176,711 |  |  | $ | 3,018,325 |  |  | Principal |  | Point in time
Consulting Services |  | $ | 2,153,501 |  |  | $ | Nil |  |  | Agent |  | Point in time
Property Management Business |  | $ | Nil/ Discontinued operation |  |  | $ | 879,547 |  |  | Principal |  | Overtime
Total |  | $ | 5,371,183 |  |  | $ | 4,180,914 |  |  |  |  |
Revenue |  | $ | 5,371,183 |  |  | $ | 4,180,914 |  |  |  |  |
For the garment manufacturing business, revenue is generated primarily from the sale of garments and related products to customers based on purchase orders or sales contracts. The Company generally recognizes revenue at a point in time when control of the products is transferred to the customer, which typically occurs upon delivery of the products to the customer or other delivery point specified in the relevant customer arrangement. At that time, the customer has the ability to direct the use of, and obtain substantially all of the remaining benefits from, the products. Revenue is measured based on the transaction price specified in the customer contract or purchase order, net of applicable discounts, returns, allowances or other variable consideration, if any. The Company did not have any material discounts, returns, allowances or other variable consideration related to garment manufacturing revenue during the year ended March 31, 2026. For the logistics services business, revenue is generated primarily from the provision of delivery, transportation and related logistics services. The Company generally recognizes revenue at a point in time when the related logistics service has been completed in accordance with the customer arrangement. The Company’s performance obligation is typically satisfied when the goods have been delivered to the agreed destination or when the relevant delivery or logistics service has otherwise been completed and accepted by the customer. Revenue is measured based on the agreed service fee specified in the customer contract, delivery order, settlement statement or other relevant arrangement. The Company did not have any material rebates, credits or other variable consideration related to logistics services revenue during the year ended March 31, 2026. For the consulting services business, revenue is generated through Yingxi HK, the Company’s Hong Kong subsidiary. The consulting services primarily includes customer consultation, appointment coordination, referral and liaison with third-party insurance brokers or other service providers, and related administrative support. The Company generally recognizes revenue when the agreed consulting, referral, coordination or administrative support services have been completed and the Company’s right to consideration has been established. If the consideration is contingent upon the successful completion or effectiveness of a customer arrangement with a third-party service provider, the Company recognizes revenue only when the contingency is resolved and it is probable that a significant reversal of revenue will not occur. The Company did not have any material refunds, clawbacks or other variable consideration related to consulting services revenue during the year ended March 31, 2026. The Company evaluates whether it acts as a principal or an agent in each consulting services arrangement. To the extent the Company acts as an agent and does not control the underlying insurance products or other third-party services before they are provided to customers, the Company recognizes revenue on a net basis for the consulting, referral or coordination fee to which it expects to be entitled, and does not recognize the gross amount of insurance premiums or other amounts charged by third-party service providers. The Company’s property management and subleasing business was disposed of during the fiscal year ended March 31, 2026 and has been classified as discontinued operations. Accordingly, the revenue recognition policies described above relate to the Company’s continuing operations. The Company’s contracts generally do not include a significant financing component, as the period between the transfer of the promised goods or services and payment is generally one year or less. Accounts receivable are recorded when the Company has an unconditional right to consideration. Amounts received from customers before the Company satisfies its performance obligations are recorded as contract liabilities or deferred revenue and are recognized as revenue when the related performance obligations are satisfied. Contract Balances and Variable Consideration Contract liabilities primarily consist of deferred revenue related to payments or consideration received before the Company satisfies its performance obligations. Deferred revenue is recognized as revenue when the related performance obligations are satisfied. As of March 31, 2026 and 2025, the Company’s contract liabilities, presented as deferred revenue, were approximately $45,255 and $0, respectively. Revenue recognized during the year ended March 31, 2026 from amounts included in contract liabilities at the beginning of the fiscal year was $0. The deferred revenue balance as of March 31, 2026 was primarily related to the digital publishing business acquired through KMFG near the end of the fiscal year. The Company did not have material refund, rebate, discount, credit or other variable consideration arrangements during the year ended March 31, 2026. The Company also did not identify any other material contract asset, contract liability or variable consideration disclosure required under ASC Topic 606. (k) Earnings Per Share The Company reports earnings (loss) per share in accordance with ASC 260 “Earnings Per Share”, which requires presentation of basic and diluted earnings per share in conjunction with the disclosure of the methodology used in computing such earnings per share. Basic earnings per share excludes dilution and is computed by dividing income available to common stockholders by the weighted average common shares outstanding during the reporting period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock. Further, if the number of common shares outstanding increases as a result of a stock dividend or stock split or decreases as a result of a reverse stock split, the computations of a basic and diluted earnings per share shall be adjusted retroactively for all periods presented to reflect that change in capital structure. Diluted earnings (loss) per share is calculated by dividing net earnings (loss) attributable to ordinary shareholders, as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of unvested restricted shares, Common Stock issuable upon the exercise of outstanding share options using the treasury stock method, and Common Stock issuable upon the conversion of convertible note, option and preferred shares using the if converted method. Ordinary equivalent shares are not included in the denominator of the diluted earnings per share calculation when inclusion of such shares would be anti-dilutive. (l) Income Taxes The Company accounts for income taxes using the asset and liability method prescribed by ASC 740, Income Taxes. Under this method, deferred tax assets and liabilities are determined based on the temporary differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates expected to be in effect in the periods in which the temporary differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income or loss in the period that includes the enactment date. The Company records a valuation allowance to reduce deferred tax assets to the amount that is more likely than not to be realized. In evaluating the realizability of deferred tax assets, management considers all available evidence, including historical operating results, expected future taxable income, tax planning strategies and the nature of temporary differences. Due to the Company’s history of losses and the uncertainty of generating sufficient future taxable income, the Company has recorded a valuation allowance against deferred tax assets to the extent management determined that realization of such deferred tax assets was not more likely than not. The Company and its subsidiaries are subject to income taxes in the jurisdictions in which they are incorporated or conduct business, including the United States, the PRC and Hong Kong. The Company’s PRC subsidiaries are generally subject to PRC Enterprise Income Tax at the statutory rate of 25%, unless preferential tax rates or other tax incentives are available and applicable. Yingxi HK is incorporated in Hong Kong and is subject to Hong Kong profits tax. The standard Hong Kong profits tax rate for corporations is 16.5%, subject to the applicable two-tiered profits tax rates regime where applicable. The Company’s parent entity, Addentax Group Corp., and KMFG are U.S. entities and are subject to U.S. federal income tax at the applicable federal corporate income tax rate. The Company evaluates uncertain tax positions in accordance with ASC 740. Interest and penalties related to uncertain tax positions, if any, are recognized as a component of income tax expense. The Company did not have any material unrecognized tax benefits, accrued interest or penalties related to uncertain tax positions for the years ended March 31, 2026 and 2025. The Company does not expect that its unrecognized tax positions will materially change within the next 12 months. No provision for U.S. federal income taxes has been made for the years ended March 31, 2026 and 2025 because the relevant U.S. entities did not generate taxable income during the respective periods. No provision for Hong Kong profits tax has been made for the years ended March 31, 2026 and 2025 because Yingxi HK did not generate taxable income during the respective periods. Income tax expense recognized for the years ended March 31, 2026 and 2025 was primarily attributable to the Company’s PRC subsidiaries. (m) Leases Lessee The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities in our consolidated balance sheets. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the leases do not provide an implicit rate, the Company generally uses the incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Lessor As a lessor, the Company’s leases are classified as operating leases under ASC 842. Leases, in which the Company is the lessor, are substantially all accounted for as operating leases and the lease components and non-lease components are accounted for separately. Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized on a straight-line basis over the lease term. (n) Related parties Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all significant related party transactions. (o) Reverse Stock Split On March 30, 2026, the Company effected a reverse stock split of its outstanding shares of common stock at a ratio of one-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. All share counts, weighted-average shares outstanding, basic and diluted net loss per share, share-based awards, warrants and convertible preferred stock conversion amounts for all periods presented in these consolidated financial statements have been retrospectively adjusted to reflect the reverse stock split to maintain period-to-period comparability. Total stockholders’ equity was not affected by the reverse stock split. (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 Company’s 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 Company’s 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 Company’s 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 Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2024-03 requires public business entities to provide additional disclosures about certain categories of expenses included in relevant income statement captions. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statement disclosures. In November 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. ASU 2024-04 clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as induced conversions. ASU 2024-04 is effective for annual reporting periods beginning after December 15, 2025 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 consolidated financial statements or related disclosures.

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