As
filed with the Securities and Exchange Commission on January 25, 2023
Registration
No. 333-[ ]
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
S-1
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ADDENTAX
GROUP CORP.
(Exact
name of registrant as specified in its charter)
| Nevada |
|
3990 |
|
35-2521028 |
(State
or other jurisdiction of
incorporation
or organization) |
|
(Primary
Standard Industrial
Classification
Code Number) |
|
(I.R.S.
Employer
Identification
Number) |
Kingkey
100, Block A, Room 4805
Luohu
District, Shenzhen City, China 518000
+(86)
755 8233 0336
(Address,
including zip code, and telephone number,
including
area code, of registrant’s principal executive offices)
Business
Filings Incorporated
701
S Carson Street, Suite 200
Carson
City, Nevada 89701
Tel:
(608) 827-5300
(Name,
address, including zip code, and telephone number,
including
area code, of agent for service of process)
Copies
To:
Lawrence
Venick, Esq.
Loeb
& Loeb LLP
345
Park Avenue
New
York, NY 10154
Telephone:
(212) 407-4000
Approximate
date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement is declared effective.
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 check the following box: ☒
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the earlier effective registration statement for the same
offering. ☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated
filer ☐ |
Accelerated
filer ☐ |
| Non-accelerated filer ☒ |
Smaller reporting company
☒ |
| |
Emerging growth company
☒ |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act. ☐
The
registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective
in accordance with Section 8(a) of the Securities Act or until the Registration Statement shall become effective on such date as the
Securities and Exchange Commission acting pursuant to said Section 8(a), may determine.
The
information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement
filed with the U.S. Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is
not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
SUBJECT
TO COMPLETION, DATED JANUARY 25, 2023
PRELIMINARY
PROSPECTUS
Addentax
Group Corp.
197,227,433
Shares of Common Stock
This
prospectus relates to the resale by the selling stockholders named in this prospectus from time to time of up to 197,227,433 shares of
our common stock, par value $0.001 per share. These 197,227,433 shares of our common stock consist of:
| ● | Up
to 164,373,089 shares of common stock (the “PIPE Stocks”), consisting of (i)
82,186,544 shares of common stock issuable upon the conversion of our senior secured convertible
notes (the “Notes”) issued to the selling stockholders pursuant to the securities
purchase agreement, dated as of January 4, 2023, by and between us and the selling stockholders
(the “PIPE Securities Purchase Agreement”), and (ii) 82,186,544 additional shares
of common stock that we are required to register pursuant to a registration rights agreement
between us and certain selling stockholders obligating us to register 200% of the maximum
number of shares of common stock issuable upon conversion of the Notes; |
| ● | Up
to 32,154,344 shares of common stock (the “PIPE Warrant Stocks”), consisting
of (i) 16,077,172 shares of our common stock issued or issuable upon the exercise of warrants
(the “PIPE Warrants”) that were issued pursuant to the PIPE Securities Purchase
Agreement, and (ii) 16,077,172 additional shares of common stock that we are required to
register pursuant to a registration rights agreement between us and certain selling stockholders
obligating us to register 200% of the maximum number of shares of common stock issuable upon
exercise of the PIPE Warrant Stocks; |
| ● | Up
to 700,000 shares of common stock (the “Placement Agent Warrant Stocks”) issued
or issuable upon the exercise of placement agent warrants (the “Placement Agent Warrants”)
that were issued to the placement agent pursuant to the PIPE placement agency agreement (the
“PIPE Placement Agency Agreement”), dated as of January 4, 2023. |
Among
other things, (i) the PIPE Warrant is exercisable for $1.25 per common stock and has a term of 5 years from the issuance date and (ii)
the and Placement Agent Warrant is exercisable for $1.25 per common stock and has a term of 5 years from the issuance date. If at
the time of exercise there is no effective registration statement registering, or the prospectus contained therein is not available for
the issuance of the common stocks underlying the PIPE Warrants and the Placement Agent Warrants to the respective holder, the holder
may, in their respective sole discretion, elect to exercise the PIPE Warrants and the Placement Agent Warrants through a cashless exercise,
in which case the respective holder would receive upon such exercise the net number of common stocks determined according to the respective
formula set forth in the PIPE Warrant and the Placement Agent Warrant, as applicable. If the Company does not issue the common stocks
in a timely fashion, the PIPE Warrants and Placement Agent Warrants Warrant each contain certain damages provisions. A holder will not
have the right to exercise any portion of the Warrant if the holder (together with its affiliates) would beneficially own in excess
of 4.99% of the number of the Company’s common stocks outstanding immediately after giving effect to the exercise. However, any
holder may increase or decrease such percentage, but not in excess of 9.99%, provided that any increase will not be effective until the
61st day after such election. The exercise price of the Warrants is subject to appropriate adjustment in the event of certain share dividends
and distributions, share splits, reclassifications or similar events affecting our common stocks and also upon any distributions of assets,
including cash, stock or other property to our stockholders. If a fundamental transaction occurs, then the successor entity will succeed
to, and be substituted for us, and may exercise every right and power that we may exercise and will assume all of our obligations under
the PIPE Warrants and the Placement Agent Warrants with the same effect as if such successor entity had been named in the PIPE Warrants
and the Placement Agent Warrants itself.
We
are not selling any shares of our common stock in this offering and we will not receive any of the proceeds from the sale of shares of
our common stock by the selling stockholders. The selling stockholders will receive all of the proceeds from any sales of the shares
of our common stock offered hereby. However, we will receive proceeds from the exercise of the PIPE Warrants and Placement Agent Warrants,
if such securities are exercised for cash. We intend to use those proceeds, if any, for general corporate purposes. We will also incur
expenses in connection with the registration of the shares of our common stock offered hereby
Our
registration of the common stocks covered by this prospectus does not mean that the selling stockholders will offer or sell any of such
common stocks. The selling stockholders named in this prospectus, or their donees, pledgees, transferees or other successors-in-interest,
may resell the common stocks covered by this prospectus through public or private transactions at prevailing market prices, at prices
related to prevailing market prices or at privately negotiated prices. For additional information on the possible methods of sale that
may be used by the selling stockholders, you should refer to the section of this prospectus entitled “Plan of Distribution.”
Any
common stocks subject to resale hereunder will have been issued by us and acquired by the selling stockholders prior to any resale of
such shares pursuant to this prospectus.
No
underwriter or other person has been engaged to facilitate the sale of the common stocks in this offering. We will bear all costs, expenses
and fees in connection with the registration of the common stocks. The selling stockholders will bear all commissions and discounts,
if any, attributable to their respective sales of our common stocks.
Our
common stocks is traded on The Nasdaq Capital Market under the symbol “ATXG.” On January 23, 2023, the reported sales
price of our common stocks on The Nasdaq Capital Market was $1.63 per share.
Throughout
this prospectus, unless the context requires otherwise, all references to “Addentax” refer to Addentax Group Corp., a holding
company and references to “we,” “us,” “our,” the “Registrant,” the “Company”
or “our company” are to Addentax and/or its consolidated subsidiaries.
Our
shares of commons stock resold in this prospectus are shares of Addentax, our Nevada holding company, which has no material operations
of its own and conducts substantially all of its operations through the operating companies established in the People’s Republic
of China, or the PRC, primarily Shenzhen Qianhai Yingxi Industrial Chain Service Co., Ltd. (“YX”), our wholly owned subsidiary
and its subsidiaries. We are not a Chinese operating company. We are a holding company and do not directly own any substantive business
operations in the China. This is a resale of common stock of our Nevada holding company, instead of shares of our operating companies
in China. Therefore, investors will not directly hold any equity interests in our Chinese operating companies. Our holding company
structure involves unique risks to investors. Chinese regulatory authorities could disallow our operating structure, which would likely
result in a material change in our operations and/or the value of our common stock, including that it could cause the value of such securities
to significantly decline or become worthless.
Additionally,
as we conduct substantially all of our operations through the operating companies established in the PRC, we are subject to certain legal
and operational risks associated with our business operations in China. PRC laws and regulations governing our current business operations
are sometimes vague and uncertain, and we face the risk that changes in the policies of the PRC government could have a significant impact
upon the business we may be able to conduct in the PRC and the profitability of such business. Therefore, these risks associated being
based in or having substantially all of our operations through the operating companies established in China could cause the value of
our securities to significantly decline or be worthless. Furthermore, these risks may result in a material change in our business operations
or a complete hinderance of our ability to offer or continue to offer our securities to investors. Recently, the PRC government initiated
a series of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking
down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using variable
interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly
enforcement. As at the date of this prospectus, the business of our subsidiaries until now are not subject to cybersecurity review with
the Cyberspace Administration of China, or CAC, given that: (i) our products and services are offered not directly to individual users
but through our institutional customers; (ii) we do not possess a large amount of personal information in our business operations; and
(iii) data processed in our business does not have a bearing on national security and thus may not be classified as core or important
data by the authorities. In addition, as at the date of this prospectus , we are not subject to merger control review by China’s
anti-monopoly enforcement agency due to the level of our revenues which provided from us and audited by our auditor BF Borgers CPA PC,
and the fact that we currently do not expect to propose or implement any acquisition of control of, or decisive influence over, any company
with revenues within China of more than RMB400 million. Currently, these statements and regulatory actions have had no impact on our
daily business operation, the ability to accept foreign investments and list our securities on an U.S. or other foreign exchange. As
of the date of this prospectus, no effective laws or regulations in the PRC explicitly require us to seek approval from the China Securities
Regulatory Commission (the “CSRC”) or any other PRC governmental authorities for our overseas listing, nor has our company
or any of our subsidiaries received any inquiry, notice, warning or sanctions regarding our overseas listing from the CSRC or any other
PRC governmental authorities. However, since these statements and regulatory actions are new, it is highly uncertain how soon legislative
or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and
interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have
on our daily business operation, the ability to accept foreign investments and list our securities on an U.S. or other foreign exchange.
As
a holding company, our ability to pay dividends to our stockholders and to service any debt we may incur may depend upon dividends paid
by our PRC Subsidiaries. Current PRC regulations permit our PRC Subsidiaries to pay dividends to us through Yingxi Industrial Chain Investment
Co., Ltd. (“Yingxi HK”), our intermediate holding subsidiary in Hong Kong, only out of their accumulated profits, if any,
determined in accordance with Chinese accounting standards and regulations. In addition, each of our PRC Subsidiaries is required to
set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its
registered capital. As of the date hereof, we have had no transactions that involved the transfer of cash or assets throughout our corporate
structure. The PRC Subsidiaries have not transferred cash or other assets to Addentax, including by way of dividends. Addentax does not
currently plan or anticipate transferring cash or other assets from our operations in China to any non-Chinese entity. As of the date
hereof, no transfers, dividends, or distributions have been made to our investors.
Pursuant
to the Holding Foreign Companies Accountable Act (“HFCAA”), the Public Company Accounting Oversight Board (United States)
(the “PCAOB”) issued a Determination Report on December 16, 2021 which found that the PCAOB is unable to inspect or investigate
completely registered public accounting firms headquartered in: (1) mainland China of the People’s Republic of China because of
a position taken by one or more authorities in mainland China; and (2) Hong Kong, a Special Administrative Region and dependency of the
PRC, because of a position taken by one or more authorities in Hong Kong. In addition, the PCAOB’s report identified the specific
registered public accounting firms which are subject to these determinations. Our registered public accounting firm, BF Borgers CPA PC,
is not headquartered in mainland China or Hong Kong and was not identified in this report as a firm subject to the PCAOB’s
determinations. BF Borgers CPA PC is registered with the PCAOB and is subject to laws in the United States pursuant to which the PCAOB
conducts regular inspections to assess BF Borgers CPA PC’s compliance with applicable professional standards. BF Borgers CPA PC
has been inspected by the PCAOB on a regular basis, with the last inspection in November and December of 2021. Notwithstanding the foregoing,
if the PCAOB is not able to fully conduct inspections of our auditor’s work papers in China, you may be deprived of the benefits
of such inspection which could result in limitation or restriction to our access to the U.S. capital markets and trading of our securities
may be prohibited under the HFCAA. Furthermore, on June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable
Act (“AHFCAA”), which, if enacted, would amend the HFCAA and require the U.S. Securities and Exchange Commission to prohibit
an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive
years instead of three. If the AHFCAA is enacted, and if we are subject to it, it would decrease the number of “non-inspection
years” from three years to two years, and thus, would reduce the time before our securities may be prohibited from trading or delisted.
On August 26, 2022, the PCAOB announced that it had signed a Statement of Protocol (the “Protocol”) with the CSRC and the
Ministry of Finance (“MOF”) of the People’s Republic of China, which governs inspections and investigations of audit
firms based in mainland China and Hong Kong. Pursuant to the fact sheet with respect to the Protocol released by the SEC, the PCAOB shall
have independent discretion to select any issuer audits for inspection or investigation and the unfettered ability to transfer information
to the SEC. According to the PCAOB, its December 2021 determinations under the HFCAA remain in effect. On December 15, 2022, the PCAOB
secures complete access to inspect, investigate audit firms based in mainland China and Hong Kong. It is possible when the PCAOB may
reassess its determinations in the future, and it could determine that it is still unable to inspect or investigate completely registered
public accounting firms in mainland China and Hong Kong. The Holding Foreign Companies Accountable Act and related regulations currently
previously did not affect the Company as the Company’s auditor is subject to PCAOB’s inspections and investigations.
We
are an “emerging growth company”, as that term is used in the Jumpstart Our Business Startups Act of 2012, and will be subject
to reduced public company reporting requirements.
Investment
in our common stocks involves a high degree of risk. See “Risk Factors” beginning on page 11, in our periodic reports filed
from time to time with the Securities and Exchange Commission, which are incorporated by reference in this prospectus and in any applicable
prospectus supplement. You should carefully read this prospectus and the accompanying prospectus supplement, together with the documents
we incorporate by reference, before you invest in our common stocks..
Neither
the U.S. Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon
the accuracy or adequacy of this registration statement. Any representation to the contrary is a criminal offense.
The
date of this prospectus is ,
2023
TABLE
OF CONTENTS
ABOUT
THIS PROSPECTUS
This
prospectus is part of the registration statement that we filed with the Securities and Exchange Commission (the “SEC”) pursuant
to which the selling stockholders named herein may, from time to time, offer and sell or otherwise dispose of the common stocks covered
by this prospectus. As permitted by the rules and regulations of the SEC, the registration statement filed by us includes additional
information not contained in this prospectus.
This
prospectus and the documents incorporated by reference into this prospectus include important information about us, the securities being
offered and other information you should know before investing in our securities. You should not assume that the information contained
in this prospectus is accurate on any date subsequent to the date set forth on the front cover of this prospectus or that any information
we have incorporated by reference is correct on any date subsequent to the date of the document incorporated by reference, even though
this prospectus is delivered or shares of common stocks are sold or otherwise disposed of on a later date. It is important for you to
read and consider all information contained in this prospectus, including the documents incorporated by reference therein, in making
your investment decision. You should also read and consider the information in the documents to which we have referred you under “Where
You Can Find More Information” and “Incorporation of Certain Information by Reference” in this prospectus.
You
should rely only on this prospectus and the information incorporated or deemed to be incorporated by reference in this prospectus. We
have not, and the selling stockholders have not, authorized anyone to give any information or to make any representation to you other
than those contained or incorporated by reference in this prospectus. If anyone provides you with different or inconsistent information,
you should not rely on it. This prospectus does not constitute an offer to sell or the solicitation of an offer to buy securities in
any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction.
We
further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document
that is incorporated by reference in this prospectus were made solely for the benefit of the parties to such agreement, including, in
some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation,
warranty or covenant to you. Moreover, such representations, warranties or covenants were accurate only as of the date when made. Accordingly,
such representations, warranties and covenants should not be relied on as accurately representing the current state of our affairs.
Unless
otherwise indicated, information contained or incorporated by reference in this prospectus concerning our industry, including our general
expectations and market opportunity, is based on information from our own management estimates and research, as well as from industry
and general publications and research, surveys and studies conducted by third parties. Management estimates are derived from publicly
available information, our knowledge of our industry and assumptions based on such information and knowledge, which we believe to be
reasonable. In addition, assumptions and estimates of our and our industry’s future performance are necessarily uncertain due to
a variety of factors, including those described in “Risk Factors” beginning on page 11 of this prospectus. These and
other factors could cause our future performance to differ materially from our assumptions and estimates.
For
investors outside the United States: We have not done anything that would permit the offering or possession or distribution of this prospectus
in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who
come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the securities
described herein and the distribution of this prospectus outside the United States.
The
market data and certain other statistical information used throughout this prospectus is based on independent industry publications,
reports by market research firms or other independent sources that we believe to be reliable sources. Industry publications and third-party
research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although
they do not guarantee the accuracy or completeness of such information. We are responsible for all of the disclosure contained in this
prospectus, and we believe these industry publications and third-party research, surveys and studies are reliable. While we are not aware
of any misstatements regarding any third-party information presented in this prospectus, their estimates, in particular, as they relate
to projections, involve numerous assumptions, are subject to risks and uncertainties, and are subject to change based on various factors.
Some market and other data included herein, as well as the data of competitors as they relate to Addentax Group Corp., is also based
on our good faith estimates.
Unless
the context otherwise requires, all references in this prospectus to:
| |
● |
“Addentax”
refer to Addentax Group Corp.; |
| |
● |
“We,”
“us,” “our,” the “Registrant”, the “Company,” or “our
company” refer to Addentax and/or its consolidated subsidiaries; |
| |
● |
“Exchange Act”
refers to the Securities Exchange Act of 1934, as amended; |
| |
● |
“SEC”
or the “Commission” refers to the United States Securities and Exchange Commission; |
| |
● |
“Securities Act”
refers to the Securities Act of 1933, as amended; |
| |
● |
“China,”
“Chinese” or the “PRC” refers to the People’s Republic of China, excluding, for the purposes
of this prospectus only, Hong Kong, Macau and Taiwan; |
| |
● |
all references to “RMB”
or “Chinese Yuan” is to the legal currency of the People’s Republic of China; and |
| |
● |
all references to “U.S.
dollars,” “dollars,” “USD” or “$” are to the legal currency of
the United States; |
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”).
PROSPECTUS
SUMMARY
This
summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider
in making your investment decision. Before investing in our securities, you should carefully read this entire prospectus, especially
the risks of investing in our securities as discussed under “Risk Factors” and the financial statements and notes
thereto herein. The following summary is qualified in its entirety by the detailed information appearing elsewhere in this prospectus.
Overview
Our
Business
We
(Addentax Group Corp.) are a Nevada holding company with no material operations of our own. We conduct substantially all of our operations
through our operating companies established in the PRC, primarily Shenzhen Qianhai Yingxi Industrial Chain Service Co., Ltd. (“YX”),
our wholly owned subsidiary and its subsidiaries. We are not a Chinese operating company. We are a holding company and do not directly
own any substantive business operations in China. This is an offering of common stock of our Nevada holding company, instead of shares
of our operating companies in China. Therefore, you will not directly hold any equity interests in our operating companies. Our holding
company structure involves unique risks to investors. Chinese regulatory authorities could disallow our operating structure, which would
likely result in a material change in our operations and/or the value of our common stock, including that it could cause the value of
such securities to significantly decline or become worthless. We classify our businesses into four segments: garment manufacturing, logistics
services, property management and subleasing, and epidemic prevention supplies.
Unless
the context otherwise requires, all references in this prospectus to “Addentax” refer to Addentax Group Corp., a holding
company, and references to “we,” “us,” “our,” the “Registrant”,
the “Company,” or “our company” refer to Addentax and/or its consolidated subsidiaries. Addentax
Group Corp., our Nevada holding company, is the entity in which investors are purchasing their interest from this offering.
Our
subsidiaries include (i) Yingxi Industrial Chain Group Co., Ltd., a Republic of Seychelles company; (ii) Yingxi Industrial Chain Investment
Co., Ltd., a Hong Kong company (“Yingxi HK”); (iii) Qianhai Yingxi Textile & Garments Co., Ltd., a PRC company; (iv)
Shenzhen Qianhai Yingxi Industrial Chain Services Co., Ltd, a PRC company (“YX”), (v) Dongguan Heng Sheng Wei Garments Co.,
Ltd, a PRC company (“HSW”), (vi) Dongguan Yushang Clothing Co., Ltd, a PRC company (“YS”), (vii) Shantou Yi Bai
Yi Garment Co., Ltd, a PRC company (“YBY”), (viii) Shantou Chenghai Dai Tou Garments Co., Ltd, a PRC company (“DT”);
(ix) Shenzhen Xin Kuai Jie Transportation Co., Ltd, a PRC company (“XKJ”), (x) Shenzhen Hua Peng Fa Logistic Co., Ltd, a
PRC company (“HPF”), (xi) Shenzhen Yingxi Peng Fa Logistic Co., Ltd., a PRC company (“PF”), (xii) Shenzhen Yingxi
Tongda Logistic Co., Ltd, a PRC company (“TD”) and (xiii) Dongguan Yingxi Daying Commercial Co., Ltd., a PRC company (“DY”).
“PRC
Subsidiaries” refer to, collectively, (i) Qianhai Yingxi Textile & Garments Co., Ltd.; (ii) Shenzhen Qianhai Yingxi Industrial
Chain Services Co., Ltd (“YX”), (iii) Dongguan Heng Sheng Wei Garments Co., Ltd (“HSW”), (iv) Dongguan Yushang
Clothing Co., Ltd (“YS”); (v) Shantou Yi Bai Yi Garment Co., Ltd (“YBY”); (vi) Shantou Chenghai Dai Tou Garments
Co., Ltd (“DT”); (vii) Shenzhen Xin Kuai Jie Transportation Co., Ltd (“XKJ”); (viii) Shenzhen Hua Peng Fa Logistic
Co., Ltd (“HPF”); (ix) Shenzhen Yingxi Peng Fa Logistic Co., Ltd (“PF”).; (x) Shenzhen Yingxi Tongda Logistic
Co., Ltd (“TD”); and (xi) Dongguan Yingxi Daying Commercial Co., Ltd (“DY”). In 2020, the Company disposed DT
and HFP to a third party respectively.
“WFOE”
refers to Qianhai Yingxi Textile & Garments Co., Ltd, a wholly foreign owned enterprise in China, which is indirectly wholly owned
by Addentax Group Corp.
Our
garment manufacturing business consists of sales made principally to wholesaler located in the PRC. We have our own manufacturing facilities,
with sufficient production capacity and skilled workers on production lines to ensure that we meet our high quality control standards
and timely meet the delivery requirements for our customers. We conduct our garment manufacturing operations through four wholly owned
subsidiaries, namely Dongguan Heng Sheng Wei Garments Co., Ltd (“HSW”), Dongguan Yushang Clothing Co., Ltd (“YS”),
Shantou Yi Bai Yi Garment Co., Ltd (“YBY”), and Shantou Chenghai Dai Tou Garments Co., Ltd (“DT”), which are
located in the Guangdong province, China. In October 2020, the Company disposed of DT to a third party at fair value, which was also
its carrying value as of September 30, 2020.
Our
logistics business consists of delivery and courier services covering 79 cities in seven provinces and two municipalities in China. Although
we have our own motor vehicles and drivers, we currently outsource some of the business to our contractors. We believe outsourcing allows
us to maximize our capacity and maintain flexibility while reducing capital expenditures and the costs of keeping drivers during slow
seasons. We conduct our logistic operations through four wholly owned subsidiaries, namely Shenzhen Xin Kuai Jie Transportation Co.,
Ltd (“XKJ”), Shenzhen Hua Peng Fa Logistic Co., Ltd (“HPF”), Shenzhen Yingxi Peng Fa Logistic Co., Ltd (“PF”)
and Shenzhen Yingxi Tongda Logistic Co., Ltd (“TD”), which are located in the Guangdong province, China. In November 2020,
the Company disposed of HPF to a third party at fair value, which was also its carrying value as of November 30, 2020.
The
business operations, customers and suppliers of DT and HPF were retained by the Company; therefore, the disposition of the two subsidiaries
did not qualify as discontinued operations.
Our
property management and subleasing business provides shops subleasing and property management services for garment wholesalers and retailers
in garment market. We conduct our property management and subleasing operation through a wholly owned subsidiary, namely Dongguan Yingxi
Daying Commercial Co., Ltd. (“DY”), which is located in the Guangdong province, China.
Our
epidemic prevention supplies business consists of manufacturing and distribution of epidemic prevention products and resale of epidemic
prevention supplies purchased from third parties in both domestic and overseas markets. We conduct our manufacturing of the epidemic
prevention products in Dongguan Yushang Clothing Co., Ltd (“YS”). We conduct the trading of epidemic prevention suppliers
through Addentax and Shenzhen Qianhai Yingxi Industrial Chain Services Co., Ltd (“YX”), a wholly owned subsidiary of the
Company, which is located in the Guangdong province in China.
Recent
Developments
Initial
Public Offering
On
August 30, 2022, Addentax entered into an underwriting agreement with Network 1 Financial Securities, Inc., as representative of the
underwriters (the “Representative”), in connection with its initial public offering (“IPO”) of 5,000,000 common
stocks, at a price of $5.00 per share, before deducting underwriting discounts, commissions, and other related expenses. The shares began
trading on the Nasdaq Capital Market on August 31, 2022. The Company issued Representative’s Warrant to purchase up to 500,000
common stocks at $6.50 per share, to Network 1 Financial Securities, Inc. On September 2, 2022, the Company consummated its IPO generating
net proceeds of approximately $23.25 million, after deducting underwriting discounts and other related expenses.
PIPE
Financing
On
January 4, 2023, Addentax entered into a Securities Purchase Agreement (the “PIPE Securities Purchase Agreement”) with
certain accredited investors (the “Purchasers”) and a PIPE Placement Agency Agreement with the placement agent
for a private placement offering (“PIPE Offering”), pursuant to which the Company received gross proceeds of
approximately $15 million , before deducting placement agent fees and other offering expenses, in consideration of (i)
up to 82,186,544 shares of common stock upon the conversion of certain convertible notes held by the selling stockholders and
(ii) up to 16,077,172 PIPE Warrants were issued (the “PIPE Offering”). Further, up to 700,000 Placement Agent Warrants
were issued to the placement agent in connection to the PIPE Offering. The PIPE Warrants and the Placement Agent Warrants have an
exercise price of $1.25 per share, and will become exercisable on the date of issuance and six months after their date of issuance,
respectively, and will expire five years from their initial date of exercise. The PIPE Securities Purchase Agreement contains
customary representations and warranties and agreements of the Company and the Purchasers and customary indemnification rights and
obligations of the parties. The PIPE Offering closed on January 4, 2023. Concurrently with the signing of the PIPE Securities
Purchase Agreement, we entered into a Registration Rights Agreement (the “Registration Rights Agreement”) to file with
the Securities and Exchange Commission a Registration Statement covering the resale of all of the registrable securities under the
Registration Rights Agreement.
Our
Corporate Structure
Notes:
| (1) |
Represents 1,507,950 Ordinary
Shares held by Hong Zhida as of the date of this prospectus. |
| |
|
| (2) |
Represents 501,171 Ordinary
Shares held by Hong Zhiwang as of the date of this prospectus. |
| |
|
| (3) |
Represents 25,720 Ordinary
Shares held by Huang Chao as of the date of this prospectus. |
For
details of each stockholder’s ownership, please refer to the beneficial ownership table in the section captioned “SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.”
PRC
Limitation on Overseas Listing and Share Issuances
Neither
we nor our subsidiaries are currently required to obtain approval from Chinese authorities, including the China Securities Regulatory
Commission, or CSRC, or Cybersecurity Administration Committee, or CAC, to list on U.S. exchanges or issue securities to foreign investors,
however, if our subsidiaries or the holding company were required to obtain approval in the future and were denied permission from Chinese
authorities to list on U.S. exchanges, we will not be able to continue listing on U.S. exchange, which would materially affect the interest
of the investors. It is uncertain when and whether the Company will be required to obtain permission from the PRC government to list
on U.S. exchanges in the future, and even when such permission is obtained, whether it will be denied or rescinded. Although the Company
is currently not required to obtain permission from any of the PRC central or local government to obtain such permission and has not
received any denial to list on the U.S. exchange, our operations could be adversely affected, directly or indirectly, by existing or
future laws and regulations relating to its business or industry; if we inadvertently conclude that such approvals are not required when
they are, or applicable laws, regulations, or interpretations change and we are required to obtain approval in the future.
On
December 24, 2021, the China Securities Regulatory Commission, or the CSRC, issued Provisions of the State Council on the Administration
of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments) (the “Administration Provisions”),
and the Administrative Measures for the Filing of Overseas Securities Offering and Listing by Domestic Companies (the “Measures”),
which were open for public comments by January 23, 2022. The Administration Provisions and Measures for overseas listings lay out specific
requirements for filing documents and include unified regulation management, strengthening regulatory coordination, and cross-border
regulatory cooperation. Domestic companies seeking to list abroad must carry out relevant security screening procedures if their businesses
involve supervisions such as foreign investment security and cyber security reviews. Companies endangering national security are among
those off-limits for overseas listings. As the Administration Provisions and Measures have not yet come into effect, we are currently
unaffected by them. However, it is uncertain when the Administration Provision and the Measures will take effect or if they will take
effect as currently drafted.
As
of the date of this prospectus, other than the response we recently received from the CSRC confirming that our offering under this prospectus
does not require the examination and approval of the CSRC in accordance with the existing PRC legislation and regulations (for more details
about this response from the CSRC, we have not received any inquiry, notice, warning, sanctions or regulatory objection to this offering
from the CSRC, CAC or any other PRC governmental authorities, and we believe our PRC Subsidiaries have obtained all requisite permissions
and approvals from PRC governmental authorities to operate our business as currently conducted under relevant PRC laws and regulations.
Currently,
each of our PRC Subsidiaries holds and maintains a business license issued by the local market supervision and administration bureau,
and has received all requisite permissions and approvals in order to conduct and operate our business. As of the date of this prospectus,
none of our PRC Subsidiaries has been denied or punished by relevant governmental authorities due to its business qualifications. In
addition, we (Addentax Group Corp.) and our non-PRC subsidiaries have also received all requisite permissions and approvals in order
to conduct and operate our business.
Transfers
of Cash to and from our Subsidiaries
We
(Addentax Group Corp.) are a Nevada holding company with no material operations of our own. We conduct substantially all of our operations
through the operating companies established in the PRC, primarily Shenzhen Qianhai Yingxi Industrial Chain Service Co., Ltd. (“YX”),
our wholly owned subsidiary and its subsidiaries. We are not a Chinese operating company. We are a holding company and do not directly
own any substantive business operations in China. As a result, although other means are available for us to obtain financing at the holding
company level, Addentax’s ability to pay dividends to its stockholders and to service any debt it may incur may depend upon dividends
paid by our PRC Subsidiaries. If any of our subsidiaries incurs debt on its own in the future, the instruments governing such debt may
restrict its ability to pay dividends to Addentax. In addition, our PRC Subsidiaries are required to make appropriations to certain statutory
reserve funds, which are not distributable as cash dividends except in the event of a solvent liquidation of the companies.
Current
PRC regulations permit our PRC Subsidiaries to pay dividends to us through Yingxi HK, our intermediate holding subsidiary in Hong Kong,
only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition,
each of our PRC Subsidiaries is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve
until such reserve reaches 50% of its registered capital. Each of such entity in China is also required to further set aside a portion
of its after-tax profits to fund the employee welfare fund, although the amount to be set aside, if any, is determined at the discretion
of its board of directors. Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate
future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except
in the event of liquidation.
The
PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC.
Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency
for the payment of dividends from our profits, if any. Furthermore, if our PRC Subsidiaries incur debt on their own in the future, the
instruments governing the debt may restrict their ability to pay dividends or make other payments.
Cash
dividends, if any, on our common stock will be paid in U.S. dollars. If we are considered a PRC tax resident enterprise for tax purposes,
any dividends we pay to our overseas stockholders may be regarded as China-sourced income and as a result may be subject to PRC withholding
tax at a rate of up to 10.0%.
In
order for us to pay dividends to our stockholders, we will rely on the distribution of dividends, through the WFOE, to Yingxi HK from
our PRC Subsidiaries. As of the date hereof, none of our PRC Subsidiaries has distributed any dividends to Yingxi HK.
Pursuant
to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax
Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be lowered to 5% if a Hong Kong resident
enterprise owns no less than 25% of a PRC project. However, the 5% withholding tax rate does not automatically apply and certain requirements
must be satisfied, including without limitation that (a) the Hong Kong project must be the beneficial owner of the relevant dividends;
and (b) the Hong Kong project must directly hold no less than 25% share ownership in the PRC project during the 12 consecutive months
preceding its receipt of the dividends. In current practice, a Hong Kong project must obtain a tax resident certificate from the Hong
Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident
certificate on a case-by-case basis, we cannot assure you that we will be able to obtain the tax resident certificate from the relevant
Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to dividends
to be paid by our WFOE to its immediate holding company, Yingxi HK. As of the date of this prospectus, we have not applied for the tax
resident certificate from the relevant Hong Kong tax authority. Yingxi HK intends to apply for the tax resident certificate when WFOE
plans to declare and pay dividends to Yingxi HK.
As
of the date hereof, we have had no transactions that involved the transfer of cash or assets throughout our corporate structure. The
PRC Subsidiaries have not transferred cash or other assets to Addentax, including by way of dividends. Addentax does not currently plan
or anticipate transferring cash or other assets from our operations in China to any non-Chinese entity. As of the date hereof, no transfers,
dividends, or distributions have been made to our investors.
Holding
Foreign Company Accountable Act
Trading
in our securities may be prohibited under the Holding Foreign Companies Accountable Act, or the HFCAA, if the Public Company Accounting
Oversight Board (United States) (the “PCAOB”) determines that it cannot inspect or investigate completely our auditor.
Pursuant
to the HFCAA, the PCAOB issued a Determination Report on December 16, 2021 which found that the PCAOB is unable to inspect or investigate
completely registered public accounting firms headquartered in: (1) mainland China of the People’s Republic of China because of
a position taken by one or more authorities in mainland China; and (2) Hong Kong, a Special Administrative Region and dependency of the
PRC, because of a position taken by one or more authorities in Hong Kong. In addition, the PCAOB’s report identified the specific
registered public accounting firms which are subject to these determinations.
The
PCAOB is currently unable to conduct inspections in China without the approval of Chinese government authorities. If it is later determined
that the PCAOB is unable to inspect or investigate our auditor completely, investors may be deprived of the benefits of such inspection.
Any audit reports not issued by auditors that are completely inspected by the PCAOB, or a lack of PCAOB inspections of audit work undertaken
in China that prevents the PCAOB from regularly evaluating our auditors’ audits and their quality control procedures, could result
in a lack of assurance that our financial statements and disclosures are adequate and accurate.
Our
auditor, BF Borgers CPA PC, is an independent registered public accounting firm with the PCAOB, and as an auditor of publicly traded
companies in the U.S., is subject to laws in the U.S. pursuant to which the PCAOB conducts regular inspections to assess its compliance
with the applicable professional standards. BF Borgers CPA PC is based in the United States and has been inspected by the PCAOB on a
regular basis, with the last inspection in November and December of 2021. BF Borgers CPA PC, is not headquartered in mainland
China or Hong Kong and was not identified as a firm subject to the determinations announced by the PCAOB on December 16, 2021.
Should the PCAOB be unable to fully conduct inspection of our auditor’s work papers in China, it will make it difficult to evaluate
the effectiveness of our auditor’s audit procedures or equity control procedures. Investors may consequently lose confidence in
our reported financial information and procedures or quality of the financial statements, which would adversely affect us and our securities.
On
August 26, 2022, the PCAOB announced that it had signed the “Protocol” with the CSRC and the MOF, which governs inspections
and investigations of audit firms based in mainland China and Hong Kong. The Protocol remains unpublished and is subject to further explanation
and implementation. Pursuant to the fact sheet with respect to the Protocol released by the SEC, the PCAOB shall have independent discretion
to select any issuer audits for inspection or investigation and the unfettered ability to transfer information to the SEC. According
to the PCAOB, its December 2021 determinations under the HFCAA remain in effect. On December 15, 2022, the PCAOB secures complete access
to inspect, investigate audit firms based in mainland China and Hong Kong. It is possible when the PCAOB may reassess its determinations
in the future, and it could determine that it is still unable to inspect or investigate completely registered public accounting firms
in mainland China and Hong Kong. The Holding Foreign Companies Accountable Act and related regulations currently previously did not affect
the Company as the Company’s auditor is subject to PCAOB’s inspections and investigations.
Moreover,
if trading in our securities is prohibited under the HFCAA in the future because the PCAOB determines that it cannot inspect or fully
investigate our auditor at such future time, an exchange may determine to delist our securities.
Furthermore,
on June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act (“AHFCAA”), which, if
enacted, would amend the HFCAA and require the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges
if its auditor is not subject to PCAOB inspections for two consecutive years instead of three. If the AHFCAA is enacted, and if we are
subject to it, it would decrease the number of “non-inspection years” from three years to two years, and thus, would reduce
the time before our securities may be prohibited from trading or delisted.
Implications
of Being an Emerging Growth Company
Emerging
Growth Company
As
a company with less than US$1.235 billion in revenue during our last fiscal year, we qualify as an “emerging growth company”
as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An “emerging growth company” may take advantage
of reduced reporting requirements that are otherwise applicable to larger public companies. In particular, as an emerging growth company,
we:
| |
● |
may present only two years of audited financial statements
and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations, or “MD&A”; |
| |
● |
are
not required to provide a detailed narrative disclosure discussing our compensation principles, objectives and elements and analyzing
how those elements fit with our principles and objectives, which is commonly referred to as “compensation discussion and analysis”; |
| |
|
|
| |
● |
are
not required to obtain an attestation and report from our auditors on our management’s assessment of our internal control over
financial reporting pursuant to the Sarbanes-Oxley Act of 2002; |
| |
|
|
| |
● |
are
not required to obtain a non-binding advisory vote from our stockholders on executive compensation or golden parachute arrangements
(commonly referred to as the “say-on-pay,” “say-on frequency” and “say-on-golden-parachute” votes); |
| |
|
|
| |
● |
are
exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph and chief executive officer
pay ratio disclosure; |
| |
|
|
| |
● |
are
eligible to claim longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the
JOBS Act; and |
We
intend to take advantage of all of these reduced reporting requirements and exemptions, with the exception of the longer phase-in periods
for the adoption of new or revised financial accounting standards under §107 of the JOBS Act.
Under
the JOBS Act, we may take advantage of the above-described reduced reporting requirements and exemptions until we no longer meet the
definition of an emerging growth company. The JOBS Act provides that we would cease to be an “emerging growth company” at
the end of the fiscal year in which the fifth anniversary of our initial sale of common equity pursuant to a registration statement declared
effective under the Securities Act of 1933, as amended, herein referred to as the Securities Act, occurred, if we have more than US$1.235
billion in annual revenues, have more than US$700 million in market value of the common stocks held by non-affiliates, or issue more
than US$1 billion in principal amount of non-convertible debt over a three-year period.
Corporate
Information
Addentax
Group Corp. was incorporated in the State of Nevada on October 28, 2014. We have a fiscal year-end of March 31. Our principal executive
offices are located at Kingkey 100, Block A, Room 4805, Luohu District, Shenzhen City, China 518000 and our telephone number is +(86)
755 8233 0336. We maintain a website at www.addentax.com. The information contained on our website is not, and should not be interpreted
to be, a part of this prospectus.
THE
OFFERING
| Common
Stocks to be Offered by the Selling Stockholders: |
|
Up to 197,227,433 of our common
stocks. These 197,227,433 shares of our common stocks consist of (i) 164,373,089 PIPE Stocks;
(ii) 32,154,344 PIPE Warrant Stocks; and (iii) 700,000 Placement Agent Warrant Stocks. |
| |
|
|
Common stock
outstanding prior to
this offering
|
|
32,084,670 |
| |
|
|
Common stock
outstanding immediately after this offering |
|
229,312,103 |
| |
|
|
| Use
of proceeds: |
|
All
common stocks offered by this prospectus are being registered for the accounts of the selling stockholders and we will not receive
any proceeds from the sale of these stocks. However, we have received and will receive proceeds from the exercise of the PIPE Warrants
and the Placement Agent Warrants if they are exercised for cash. We intend to use those proceeds, if any, for general working corporate
purposes. See “Use of Proceeds” beginning on page 13 of this prospectus for additional information. |
| |
|
|
| Nasdaq
Capital Market Symbol: |
|
Our
common stocks are listed on The Nasdaq Capital Market under the symbol “ATXG.” |
| |
|
|
| Risk
factors: |
|
Investing
in our common stocks involves significant risks. See “Risk Factors” beginning on page 11 of this prospectus and
the documents incorporated by reference in this prospectus. |
FORWARD-LOOKING
STATEMENTS
This
prospectus contains forward-looking statements within the meaning of Section 27A of the Securities Act and the Private Securities Litigation
Reform Act of 1995, as amended. These forward-looking statements that are based on our management’s belief and assumptions and
on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements
are reasonable, these statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties
and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from
any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
In
some cases, you can identify forward-looking statements by terminology such as “may,” “should,”
“expects,” “intends,” “plans,” “anticipates,” “believes,”
“estimates,” “predicts,” “potential,” “continue” or the negative
of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking
statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control
and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include,
among other things, those listed under “Risk Factors” and elsewhere in this prospectus. If one or more of these risks
or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from
those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. You
should read this prospectus and those documents which we have filed with the SEC as exhibits to the registration statement, of which
this prospectus is a part, completely and with the understanding that our actual future results may be materially different from any
future results expressed or implied by these forward-looking statements.
The
forward-looking statements in this prospectus represent our views as of the date of this prospectus. We anticipate that subsequent events
and developments may cause our views to change. However, while we may elect to update these forward-looking statements at some point
in the future, we have no current intention of doing so except to the extent required by applicable law. You should therefore not rely
on these forward-looking statements as representing our views as of any date subsequent to the date of this prospectus.
You
should also consider carefully the statements under “Risk Factors” and other sections of this prospectus, which address
additional facts that could cause our actual results to differ from those set forth in the forward-looking statements. We caution investors
not to place significant reliance on the forward-looking statements contained in this prospectus. We undertake no obligation to publicly
update or review any forward-looking statements, whether as a result of new information, future developments or otherwise, except as
otherwise required by law.
RISK
FACTORS
Investing
in our securities involves a high degree of risk. In addition to the other information contained in this prospectus and in the documents
we incorporate by reference herein, you should carefully consider the risks discussed below and under the heading “Risk Factors”
in our Annual Report on Form 10-K for the fiscal year ended March 31, 2022 as well as any amendment or update to our risk factors reflected
in subsequent filings with the SEC, before making a decision about investing in our securities. The risks and uncertainties discussed
below and in the documents incorporated by reference are not the only ones facing us. Additional risks and uncertainties not presently
known to us, or that we currently see as immaterial, may also harm our business. If any of these risks occur, our business, financial
condition and operating results could be harmed, the trading price of our common stocks could decline and you could lose part or all
of your investment.
Risks
Related to This Offering and our Common Stock
You
may experience future dilution as a result of future equity offerings and other issuances of our securities.
In
order to raise additional capital, we may in the future offer additional common stocks or other securities convertible into or exchangeable
for our common stocks at prices that may not be the same as the price per share paid by the investors in this offering. We may not be
able to sell shares or other securities in any other offering at a price per share that is equal to or greater than the price per share
paid by the investors in this offering, and investors purchasing shares or other securities in the future could have rights superior
to existing stockholders. The price per share at which we sell additional common stocks or securities convertible into common stocks
in future transactions may be higher or lower than the price per share paid to the selling stockholders. Our stockholders will incur
dilution upon exercise of any outstanding stock options, warrants or other convertible securities or upon the issuance of common stocks
under our share incentive programs.
We
expect to require additional capital in the future in order to develop our business operations. If we do not obtain any such additional
financing, it may be difficult to effectively realize our long-term strategic goals and objectives.
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.
The
terms of any securities issued by us in future capital transactions may be more favorable to new investors, and may include preferences,
superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders
of any of our securities then outstanding.
In
addition, we may incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting
fees, securities law compliance fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash
expenses in connection with certain securities we issue, such as convertible notes and warrants, which may adversely impact our financial
condition.
Future
sales of substantial amounts of the shares of common stock by existing stockholders could adversely affect the price of our common stock.
If
we or our existing stockholders, our directors or their affiliates or certain of our executive officers, sell a substantial number of
our common stocks in the public market, including the Resale Shares once issuable upon exercise of the PIPE Warrants and the Placement
Agent Warrants, the market price of our common stocks could decrease significantly. The perception in the public market that we or our
stockholders might sell our common stocks could also depress the market price of our common stocks and could impair our future ability
to obtain capital, especially through an offering of equity securities.
The
market price of our common stocks may be subject to fluctuation and you could lose all or part of your investment.
Our
common stocks were first offered publicly in our IPO in August 2022 at a price of $5.00 per share, and our common stocks have subsequently
traded as high as $656.54 per share and as low as $0.975 per share through January 23, 2023. The market price of our common
stocks on the Nasdaq Capital Market may fluctuate as a result of a number of factors, some of which are beyond our control, including,
but not limited to:
| ● |
variations
in our actual and perceived operating results; |
| |
|
| ● |
news
regarding gains or losses of customers or partners by us or our competitors; |
| |
|
| ● |
news
regarding gains or losses of key personnel by us or our competitors; |
| |
|
| ● |
announcements
of competitive developments, acquisitions or strategic alliances in our industry by us or our competitors; |
| |
|
| ● |
changes
in earnings estimates or buy/sell recommendations by financial analysts; |
| |
|
| ● |
potential
litigation; |
| |
|
| ● |
the
imposition of fines or penalties related to our activities in the PRC and failure to comply with applicable rules and regulations;
|
| |
|
| ● |
general
market conditions or other developments affecting us or our industry; and |
| |
|
| ● |
the
operating and stock price performance of other companies, other industries and other events or factors beyond our control. |
These
factors and any corresponding price fluctuations may materially and adversely affect the market price of our common stocks and result
in substantial losses being incurred by our investors. In the past, following periods of market volatility, public company stockholders
have often instituted securities class action litigation. If we were involved in securities litigation, it could impose a substantial
cost upon us and divert the resources and attention of our management from our business .
PRIVATE
PLACEMENT OF NOTES AND WARRANTS
On
January 4, 2023, the Company entered into the PIPE Securities Purchase Agreement with the Purchasers, pursuant to which the Company received
net proceeds of $15,000,000 in consideration of the issuance of:
| ● | Notes
in the aggregate original principal amount of $16,666,666.66; |
| ● | PIPE
Warrants to purchase up to 16,077,172 shares of our common stock of the Company until on
or prior to 11:59 p.m. (New York time) on the five year anniversary of the closing date at
an exercise price of $1.25 per share. |
The
transactions contemplated under the PIPE Securities Purchase Agreement closed on January 4, 2023. The Company intends to use the proceeds
from the issuance of the Notes and the PIPE Warrants for general corporate purposes.
The
Notes bear interest at an interest rate of 5% per annum payable on each installment date commencing on the original date of issuance.
If an Event of Default (as defined in the Notes) has occurred and is continuing, interest would accrue at the rate of 18% per annum,
compounding monthly. The Notes are convertible into shares of our common stock, beginning after the original date of issuance at an initial
conversion price of $1.25 per share. The conversion price is subject to customary adjustments for stock dividends, stock splits, reclassifications
and the like, and subject to price-based adjustment, on a “full ratchet” basis, in the event of any issuances of shares of
our common stock, or securities convertible, exercisable or exchangeable for, shares of our common stock at a price below the then-applicable
conversion price (subject to certain exceptions).
The
PIPE Warrants contain provisions permitting cashless exercise subject to certain conditions.
The
Notes and the PIPE Warrants contain conversion limitations providing that a holder thereof may not convert the Notes or exercise the
PIPE Warrants to the extent (but only to the extent) that, if after giving effect to such conversion or exercise, the holder or any of
its affiliates would beneficially own in excess of 4.99% the ordinary shares immediately after giving effect to such conversion or exercise.
A holder may increase or decrease its beneficial ownership limitation upon notice to the Company provided that in no event such limitation
exceeds 9.99%, and that any increase shall not be effective until the 61st day after such notice.
The
Company has also entered into the Registration Rights Agreement to file with the SEC a Registration Statement covering the resale of
all of the registrable securities under the Registration Rights Agreement.
The
Notes will rank senior to all outstanding and future indebtedness of the Company and its Subsidiaries (as defined in the PIPE Securities
Purchase Agreement), and will be secured by a first priority perfected security interest in all of the existing and future assets of
the Company and each Subsidiary Guarantor (as defined in the Security and Pledge Agreement), as evidenced by (i) a security and pledge
agreement to be entered into at closing (the “Security and Pledge Agreement”), (ii) account control agreements to be entered
into at closing with respect to certain accounts described in the Note and the Security and Pledge Agreement, and (iii) a guaranty to
be executed by certain subsidiaries of the Company (the “Guaranty”) pursuant to which each of them will guaranty the obligations
of the Company under the Notes and the other transaction documents (as defined in the PIPE Securities Purchase Agreement).
Pursuant
to the PIPE Securities Purchase Agreement, the Company agreed to seek the approval of its stockholders for the issuance of all shares
of our common stock issuable upon conversion of the Notes, in compliance with the rules of the Nasdaq Capital Market (the “Stockholder
Approval”). It is a condition to the closing that the Company enter into voting agreements with certain significant stockholders
of the Company (each, a “Stockholder”), pursuant to which each Stockholder will agree, with respect to all of the voting
securities of the Company that such Stockholder beneficially owns as of the date thereof or thereafter, to vote in favor of the Stockholder
Approval.
Pursuant
to an placement agency agreement dated January 4, 2023 between the Company and Univest Securities LLC (the “Placement Agent”),
the Company engaged the Placement Agent to act as the Company’s placement agent in connection with the PIPE Securities Purchase
Agreement and agreed to pay the Placement Agent (i) a cash fee equal to 7% of the gross proceeds raised by the Company from the sale
of the securities at the closing of the offering to the Purchasers; (ii) an out-of-pocket expenses, including the reasonable fees and
expenses of Placement Agent’s counsel and due diligence analysis; and (iii) the Placement Agent Warrant to purchase 5% of the aggregate
number of conversion shares under the PIPE Securities Purchase Agreement. The Placement Agent Warrants contain provisions permitting
cashless exercise subject to certain conditions and registration rights to file with the SEC a Registration Statement covering the resale
of all of the Placement Agent Warrant shares.
USE
OF PROCEEDS
All
common stocks offered by this prospectus are being registered for the accounts of the selling stockholders and we will not receive
any proceeds from the sale of these shares. However, we have received and we may receive proceeds from the exercise of the PIPE
Warrants and the Placement Agent Warrants, if and when exercised, to the extent that they are exercised for cash. The PIPE Warrants
and the Placement Agent Warrants, however, are also exercisable on a cashless basis under certain circumstances. For the purposes of
this registration statement, we have assumed the full exercise for cash of the PIPE Warrants and the Placement Agent Warrants, in
which case the net proceeds of such exercise will be approximately $15 million prior to the payment of the Placement Agent fee. We intend to use those proceeds, if
any, for general corporate purposes.
DESCRIPTION
OF CAPITAL STOCK
General
We
have authorized capital stock consisting of 50,000,000 shares of common stock, $0.001 par value per share.
As
of the date of this prospectus, we have 32,084,670 shares of our common stock outstanding.
Each
share of our common stock is entitled to equal dividends and distributions per share with respect to the common stock when, as and if
declared by our Board of Directors. No holder of any shares of our common stock has a preemptive right to subscribe for any of our securities,
nor are any shares of our common stock subject to redemption or convertible into other securities. Upon liquidation, dissolution or winding-up
of the Company, and after payment to our creditors and preferred stockholders, if any, our assets will be divided pro rata on a share-for-share
basis among the holders of our common stock. Each share of our common stock is entitled to one vote on all stockholder matters. Shares
of our common stock do not possess any cumulative voting rights.
The
presence of the persons entitled to vote a majority of the outstanding voting shares on a matter before the stockholders constitute the
quorum necessary for the consideration of the matter at a stockholders’ meeting.
Except
as otherwise required by law, the Articles of Incorporation, or any certificate of designations, (i) at all meetings of stockholders
for the election of directors, a plurality of votes cast are sufficient to elect such directors; (ii) any other action taken by stockholders
are be valid and binding upon the Company if the number of votes cast in favor of the action exceeds the number of votes cast in opposition
to the action, at a meeting at which a quorum is present, except that adoption, amendment or repeal of the Bylaws by stockholders requires
the vote of a majority of the shares entitled to vote; and (iii) broker non-votes and abstentions are considered for purposes of establishing
a quorum but not considered as votes cast for or against a proposal or director nominee. Each stockholder has one vote for every share
of stock having voting rights registered in his or her name, except as otherwise provided in any preferred stock designation setting
forth the right of preferred stock stockholders.
The
common stock does not have cumulative voting rights, which means that the holders of 51% of the common stock voting for election of directors
can elect 100% of our directors if they choose to do so.
Listing
Our
common stocks are listing on the Nasdaq Capital Market under the symbol “ATXG”.
Transfer
Agent
The
transfer agent for the common stock is Transfer Online, Inc. The transfer agent’s address is 512 SE Salmon St., Portland, OR 97214,
and its telephone number is +1 (503) 227-2950.
SELLING
STOCKHOLDERS
Unless
the context otherwise requires, as used in this prospectus, “selling stockholders” includes the selling stockholders listed
below and donees, pledgees, transferees or other successors-in-interest selling shares received after the date of this prospectus from
the selling stockholders as a gift, pledge or other non-sale related transfer.
The
shares of common stock being offered by the selling stockholders are those issuable to the selling stockholders upon conversion of the
Notes and exercise of the PIPE Warrants and the Placement Agent Warrants. For additional information regarding the issuance of the Notes,
the PIPE Warrants and the Placement Agent Warrants, see “Private Placement of Notes and Warrants” above. We are registering
the shares of common stock in order to permit the selling stockholders to offer the shares for resale from time to time. Except for the
ownership of the Notes and the PIPE Warrants issued pursuant to the PIPE Securities Purchase Agreement, the selling stockholders have
not had any material relationship with us within the past three years.
The
table below lists the selling stockholders and other information regarding the beneficial ownership (as determined under Section 13(d)
of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder) of the shares of common stock held by each
of the selling stockholders. The second column lists the number of shares of common stock beneficially owned by the selling stockholders,
based on their respective ownership of shares of common stock, Notes, PIPE Warrants, and Placement Agent Warrants as of January 4, 2023
assuming conversion of the Notes and exercise of the PIPE Warrants and Placement Agent Warrants held by each such selling stockholder
on that date but taking account of any limitations on conversion and exercise set forth therein.
The
third column lists the shares of common stock being offered by this prospectus by the selling stockholders and does not take in account
any limitations on (i) conversion of the Notes set forth therein or (ii) exercise of the PIPE Warrants and Placement Agent Warrants set
forth therein.
In
accordance with the terms of a registration rights agreement with the holders of the Notes, PIPE Warrants and the Placement Agent Warrants,
this prospectus generally covers the resale of the sum of (i) 200% of the maximum number of shares of common stock issued or issuable
pursuant to the Notes, including payment of interest on the notes through July 4, 2024), (ii) 200% of the maximum number of shares of
common stock issued or issuable upon exercise of the PIPE Warrants, and (iii) ) 100% of the maximum number of shares of common stock
issued or issuable upon exercise of the Placement Agent Warrants, in each case, determined as if the outstanding Notes (including interest
on the notes through July 4, 2024), PIPE Warrants and Placement Agent Warrants were converted or exercised (as the case may be) in full
(without regard to any limitations on conversion or exercise contained therein solely for the purpose of such calculation) at the floor
price or exercise price (as the case may be) calculated as of the trading day immediately preceding the date this registration statement
was initially filed with the SEC. Because the conversion price and alternate conversion price of the Notes and the exercise price of
the PIPE Warrants and the Placement Agent Warrants may be adjusted, the number of shares that will actually be issued may be more or
less than the number of shares being offered by this prospectus. The fourth column assumes the sale of all of the shares offered by the
selling stockholders pursuant to this prospectus.
Under
the terms of the Notes, the PIPE Warrants and the Placement Agent Warrants, a selling stockholder may not convert the Notes or exercise
the PIPE Warrants and Placement Agent Warrants to the extent (but only to the extent) such selling stockholder or any of its affiliates
would beneficially own a number of shares of our common stock which would exceed 4.99% of the outstanding shares of the Company (the
“Maximum Percentage”). The number of shares in the second column reflects these limitations. The selling stockholders may
sell all, some or none of their shares in this offering. See “Plan of Distribution.”
| Name
of Selling Stockholder | |
Shares
Beneficially
Owned Prior
to Offering(4)(5) | | |
Maximum
Number of
Shares to be
Sold | | |
Number
of
Shares
Owned
after Offering | |
| | |
Number | | |
Percent
| | |
| | |
Number | | |
Percent
| |
| Alto
Opportunity Master Fund, SPC - Segregated Master Portfolio B (1) | |
| 1,685,000 | (6) | |
| 4.99 | % | |
| 98,263,716 | (7) | |
| 0 | (8) | |
| 0 | % |
| HB
Fund LLC (2) | |
| 1,685,000 | (6) | |
| 4.99 | % | |
| 98,263,716 | (7) | |
| 0 | (8) | |
| 0 | % |
| Univest
Securities LLC (3) | |
| 700,000 | | |
| 4.99 | % | |
| 700,000 | | |
| 0 | | |
| 0 | % |
| (1) |
Ayrton
Capital LLC, the investment manager to Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B, has discretionary authority
to vote and dispose of the shares held by Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B and may be deemed to
be the beneficial owner of these shares. Waqas Khatri, in his capacity as Managing Member of Ayrton Capital LLC, may also be deemed
to have investment discretion and voting power over the shares held by Alto Opportunity Master Fund, SPC - Segregated Master Portfolio
B. Ayrton Capital LLC and Mr. Khatri each disclaim any beneficial ownership of these shares. The address of Ayrton Capital LLC is
55 Post Rd West, 2nd Floor, Westport, CT 06880. |
| (2) |
Hudson
Bay Capital Management LP, the investment manager of HB Fund LLC, has voting and investment power over these securities. Sander Gerber
is the managing member of Hudson Bay Capital GP LLC, which is the general partner of Hudson Bay Capital Management LP. Each of HB
Fund LLC and Sander Gerber disclaims beneficial ownership over these securities. |
| (3) |
The
Placement Agent. |
| (4) |
All
of the Notes and the PIPE Warrants that are convertible or exercisable for shares of common stock offered hereby contain certain
beneficial ownership limitations, which provide that (i) a holder of the Notes will not have the right to exercise any portion of
its notes if the holder, together with its Attribution Parties (as defined in the form of the Notes), would beneficially own in excess
of the Maximum Percentage immediately after giving effect to such conversion, provided that upon at least 61 days prior notice to
us, a holder may increase or decrease such limitation up to a maximum of 9.99% of the number of common stocks outstanding; and that
(ii) a holder of the PIPE Warrants will not have the right to exercise any portion of its warrants if the holder, together with its
Attribution Parties (as defined in the form of the PIPE Warrants) would beneficially own in excess of the Maximum Percentage immediately
after giving effect to such exercise. |
| (5) |
Applicable
percentage ownership is based on 32,084,670 shares of our common stock outstanding as of January 25, 2023, and based on 229,312,103
shares of our common stock outstanding after the offering. |
| (6) |
This
column lists the number of shares of our common stock beneficially owned by this selling stockholder as of January 25, 2023 after
giving effect to the Maximum Percentage (as defined in the paragraph above). Without regard to the Maximum Percentage, as of January
25, 2023, this selling stockholder would beneficially own an aggregate of 49,131,858 shares of our common stock, consisting of (i)
up to 41,093,272 shares of our common stock (including up to 1,685,000 shares of our common stock that may be pre-delivered to
this selling stockholder) underlying the outstanding Note held by this selling stockholder, convertible at the
Floor Price of $0.218 per share, all of which shares are being registered for resale under this prospectus, and (ii) up to 8,038,586
shares underlying the PIPE Warrant held by this selling stockholder, currently exercisable at an exercise price of $1.25, all of
which are being registered for resale under this prospectus. |
| (7) |
For
the purposes of the calculations of our common stock to be sold pursuant to the prospectus we are assuming (i) an event of default
under the Note has not occurred, and the issuance of 200% of the shares of our common stock underlying the Note, including payment
of 5% interest on the Note through July 4, 2024, converted in full at the Floor Price of $0.218 per share without regard to any limitations
set forth therein, and (ii) the issuance of 200% of the shares of our common stock underlying the PIPE Warrant, exercised in full
at an exercise price of $1.25 without regard to any limitations set forth therein. |
| (8) |
Represents
the amount of shares that will be held by this selling stockholder after completion of this offering based on the assumptions that
(a) all commons stock underlying the Notes and PIPE Warrants registered for sale by the registration statement of which this prospectus
is part of will be sold, and (b) no other shares of common stock are acquired or sold by this selling stockholder prior to completion
of this offering. However, this selling shareholder is not obligated to sell all or any portion of the shares of our common stock
offered pursuant to this prospectus. |
Certain
Relationships and Related Party Transactions
On
January 4, 2023, we entered into the PIPE Securities Purchase Agreement, with the selling stockholders, pursuant to which we issued and
sold to the selling stockholders up to 82,186,544 shares of our common stock upon the conversion of certain convertible notes held by
the selling stockholders and up to 16,077,172 PIPE Warrants were issued (the “PIPE Offering”). Further, up to 700,000 Placement
Agent Warrants were issued to the placement agent in connection to the PIPE Offering pursuant to the PIPE Placement Agency Agreement.
The PIPE Warrants and the Placement Agent Warrants have an exercise price of $1.25 per share, pursuant to which the Company received
gross proceeds of approximately $15 million, before deducting placement agent fees and other offering expenses. The PIPE Offering closed
on January 4, 2023.
Under
the terms of the Registration Rights Agreement and the PIPE Placement Agency Agreement, we agreed to file this registration statement
with respect to the registration of the resale by the selling stockholders of the common stock underlying the Notes, PIPE Warrants, and
PIPE Placement Agency Warrants, as applicable, as of the 30th calendar day after the closing date of the PIPE Securities Purchase
Agreement. We agreed to use best efforts to have this registration statement declared effective as soon as practicable, but in no event
later than the earlier of (A) the 180th calendar day after the closing date of the PIPE Securities Purchase Agreement, or (B) 2nd business
day after the date we are notified by the U.S. Securities Exchange Commission that this registration statement will not be reviewed or
will not be subject to further review. We agreed to use best efforts to keep this registration statement effective until the date on
which all of the Securities sold in the PIPE Offering are sold by the selling stockholders. We are registering the shares to be sold
by the selling stockholders under the registration statement of which this prospectus is a part to satisfy our obligation under the PIPE
Securities Purchase Agreement and the PIPE Placement Agency Agreement.
PLAN
OF DISTRIBUTION
We
are registering the shares of common stock issuable upon conversion of the Notes and exercise of the Pipe Warrants and the Placement
Agent Warrants to permit the resale of these shares of common stock by the holders of the Notes, Pipe Warrants and Placement Agent Warrants
from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling stockholders
of the shares of common stock, although we will receive the exercise price of any Pipe Warrants and Placement Agent Warrants not exercised
by the selling stockholders on a cashless exercise basis. We will bear all fees and expenses incident to our obligation to register the
shares of common stock.
Each
Selling Stockholder (for the purposes of this section, the “Selling Stockholders”) of the securities and any of their pledgees,
assignees and successors-in-interest may, from time to time, may sell all or a portion of the shares of common stock held by them and
offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the shares of common stock
are sold through underwriters or broker-dealers, the selling stockholders will be responsible for underwriting discounts or commissions
or agent’s commissions. The shares of common stock may be sold in one or more transactions at fixed prices, at prevailing market
prices at the time of the sale, at varying prices determined at the time of sale or at negotiated prices. These sales may be effected
in transactions, which may involve crosses or block transactions, pursuant to one or more of the following methods:
| |
● |
on
any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale; |
| |
|
|
| |
● |
in
the over-the-counter market; |
| |
|
|
| |
● |
in
transactions otherwise than on these exchanges or systems or in the over-the-counter market; |
| |
|
|
| |
● |
through
the writing or settlement of options, whether such options are listed on an options exchange or otherwise; |
| |
|
|
| |
● |
ordinary
brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
| |
|
|
| |
● |
block
trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction; |
| |
|
|
| |
● |
purchases
by a broker-dealer as principal and resale by the broker-dealer for its account; |
| |
|
|
| |
● |
an
exchange distribution in accordance with the rules of the applicable exchange; |
| |
|
|
| |
● |
privately
negotiated transactions; |
| |
|
|
| |
● |
short
sales made after the date the Registration Statement is declared effective by the SEC; |
| |
|
|
| |
● |
broker-dealers
may agree with a selling security holder to sell a specified number of such shares at a stipulated price per share; |
| |
|
|
| |
● |
a
combination of any such methods of sale; and |
| |
|
|
| |
● |
any
other method permitted pursuant to applicable law. |
The
selling stockholders may also sell shares of common stock under Rule 144 promulgated under the Securities Act of 1933, as amended, if
available, rather than under this prospectus. In addition, the selling stockholders may transfer the shares of common stock by other
means not described in this prospectus. If the selling stockholders effect such transactions by selling shares of common stock to or
through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts,
concessions or commissions from the selling stockholders or commissions from purchasers of the shares of common stock for whom they may
act as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers
or agents may be in excess of those customary in the types of transactions involved). In connection with sales of the shares of common
stock or otherwise, the selling stockholders may enter into hedging transactions with broker-dealers, which may in turn engage in short
sales of the shares of common stock in the course of hedging in positions they assume. The selling stockholders may also sell shares
of common stock short and deliver shares of common stock covered by this prospectus to close out short positions and to return borrowed
shares in connection with such short sales. The selling stockholders may also loan or pledge shares of common stock to broker-dealers
that in turn may sell such shares.
The
selling stockholders may pledge or grant a security interest in some or all of the notes, warrants or shares of common stock owned by
them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares
of common stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable
provision of the Securities Act amending, if necessary, the list of selling stockholders to include the pledgee, transferee or other
successors in interest as selling stockholders under this prospectus. The selling stockholders also may transfer and donate the shares
of common stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling
beneficial owners for purposes of this prospectus.
To
the extent required by the Securities Act and the rules and regulations thereunder, the selling stockholders and any broker-dealer participating
in the distribution of the shares of common stock may be deemed to be “underwriters” within the meaning of the Securities
Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions
or discounts under the Securities Act. At the time a particular offering of the shares of common stock is made, a prospectus supplement,
if required, will be distributed, which will set forth the aggregate amount of shares of common stock being offered and the terms of
the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation
from the selling stockholders and any discounts, commissions or concessions allowed or re-allowed or paid to broker-dealers.
Under
the securities laws of some states, the shares of common stock may be sold in such states only through registered or licensed brokers
or dealers. In addition, in some states the shares of common stock may not be sold unless such shares have been registered or qualified
for sale in such state or an exemption from registration or qualification is available and is complied with.
There
can be no assurance that any selling stockholder will sell any or all of the shares of common stock registered pursuant to the registration
statement, of which this prospectus forms a part.
The
selling stockholders and any other person participating in such distribution will be subject to applicable provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, to the extent applicable,
Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares of common stock by the selling
stockholders and any other participating person. To the extent applicable, Regulation M may also restrict the ability of any person engaged
in the distribution of the shares of common stock to engage in market-making activities with respect to the shares of common stock. All
of the foregoing may affect the marketability of the shares of common stock and the ability of any person or entity to engage in market-making
activities with respect to the shares of common stock.
We
will pay all expenses of the registration of the shares of common stock pursuant to the registration rights agreement, estimated to be
$211,914 in total, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance with
state securities or “blue sky” laws; provided, however, a selling stockholder will pay all underwriting discounts and selling
commissions, if any. We will indemnify the selling stockholders against liabilities, including some liabilities under the Securities
Act in accordance with the registration rights agreements or the selling stockholders will be entitled to contribution. We may be indemnified
by the selling stockholders against civil liabilities, including liabilities under the Securities Act that may arise from any written
information furnished to us by the selling stockholder specifically for use in this prospectus, in accordance with the related registration
rights agreements or we may be entitled to contribution.
Once
sold under the registration statement, of which this prospectus forms a part, the shares of common stock will be freely tradable in the
hands of persons other than our affiliates.
We
agreed to keep this prospectus effective until the earlier of (i) the date on which the securities may be resold by the selling stockholders
without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for
the Company to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of similar
effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule
of similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable
state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered
or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is
complied with.
LEGAL
MATTERS
The
validity of the shares of our common stock offered hereby has been passed upon for us by Loeb & Loeb LLP, New York, New York.
EXPERTS
BF
Borgers CPA PC, independent registered public accounting firm, has audited our financial statements as of and for the years ended March
31, 2022 and 2021 as set forth in their report.
The
registered business address of BF Borgers CPA PC is 5400 W Cedar Ave, Lakewood, CO 80226, United States.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The
SEC allows us to “incorporate by reference” into this prospectus the information in documents we file with it. This means
that we can disclose important information to you by referring you to another document filed by us with the SEC. Each document incorporated
by reference is current only as of the date of such document, and the incorporation by reference of such documents shall not create any
implication that there has been no change in our affairs since the date thereof or that the information contained therein is current
as of any time subsequent to its date. The information incorporated by reference is considered to be a part of this prospectus and should
be read with the same care. When we update the information contained in documents that have been incorporated by reference by making
future filings with the SEC, the information incorporated by reference in this prospectus is considered to be automatically updated and
superseded. In other words, in the case of a conflict or inconsistency between information contained in this prospectus and information
incorporated by reference into this prospectus, you should rely on the information contained in the document that was filed later.
We
incorporate by reference into this prospectus documents listed below and any future filings made with the SEC under Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act, and, to the extent specifically designated therein, reports on Form 8-K we furnish to the SEC on or
after the date on which this registration statement is first filed with the SEC and until the termination or completion of that offering
under this prospectus:
| |
● |
our
Annual Report on Form 10-K for the fiscal year ended March 31, 2022, filed with the SEC on June 23, 2022; |
| |
|
|
| |
● |
our
Quarterly Reports on Form 10-Q for the quarters ended June 30 and September 30, 2022, filed with the SEC on August 15, 2022 and November 14, 2022; |
| |
|
|
| |
● |
our
Current Report on Form 8-K, furnished to the SEC on September 2, 2022 (including the information contained in Exhibit 99.1 and 99.2
thereto); and |
| |
|
|
| |
● |
the
description of our common stocks contained under the heading “Item 1. Description of Registrant’s Securities to be Registered”
in our registration statement on Form 8-A, as filed with the SEC on August 11, 2022. |
Any
statement contained herein or in a document all or a portion of which is incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this registration statement to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute
a part of this registration statement.
Unless
expressly incorporated by reference, nothing in this prospectus shall be deemed to incorporate by reference information furnished to,
but not filed with, the SEC. Copies of all documents incorporated by reference in this prospectus, other than exhibits to those documents
unless such exhibits are specially incorporated by reference in this prospectus, will be provided at no cost to each person, including
any beneficial owner, who receives a copy of this prospectus on the written or oral request of that person made to:
Addentax
Group Corp.
Kingkey
100, Block A, Room 4805
Luohu
District, Shenzhen City, China 518000
WHERE
YOU CAN FIND MORE INFORMATION
We
have filed with the SEC a registration statement on Form S-1 under the Securities Act, with respect to the shares of common stock being
offered by this prospectus. This prospectus does not contain all of the information in the registration statement and its exhibits. For
further information with respect to us and the common stock offered by this prospectus, we refer you to the registration statement and
its exhibits. Statements contained in this prospectus as to the contents of any contract or any other document referred to are not necessarily
complete, and in each instance, we refer you to the copy of the contract or other document filed as an exhibit to the registration statement.
Each of these statements is qualified in all respects by this reference.
You
can read our SEC filings, including the registration statement, over the Internet at the SEC’s website at www.sec.gov. You may
also read and copy any document we file with the SEC at its public reference facilities at 100 F Street NE, Washington, D.C. 20549. You
may also obtain copies of these documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street NE,
Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities.
You may also request a copy of these filings, at no cost, by writing us at Addentax Group Corp., Kingkey 100, Block A, Room 4805, Luohu
District, Shenzhen City, China 518000.
We
are subject to the information reporting requirements of the Exchange Act, and file reports, proxy statements and other information with
the SEC. These reports, proxy statements and other information are available for inspection and copying at the public reference room
and web site of the SEC referred to above. We also maintain a website at www.addentax.com, at which, following the closing of this offering,
you may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or furnished
to, the SEC. The information contained in, or that can be accessed through, our website incorporated by reference in, and is not part
of, this prospectus.
ADDENTAX
GROUP CORP.
97,052,402
Shares of Common Stock
PROSPECTUS
The
date of this prospectus is , 2023
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
ITEM
13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The
costs and expenses payable by the Company in connection with the offerings described in this registration statement are set forth below.
The selling stockholders will not bear any portion of such expenses.
| SEC registration fee | |
$ | 34,414 | |
| Legal fees and expenses | |
| 150,000 | |
| Accounting fees and expenses | |
| 27,500 | |
| Printer costs and expenses | |
| - | |
| Total | |
$ | 211,914 | |
Estimated as permitted under Rule 511 of Regulation S-K.
ITEM
14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
We
are a Nevada corporation and generally governed by the Nevada Private Corporations Code, Title 78 of the Nevada Revised Statutes, or
NRS.
Section
78.138 of the NRS provides that, unless the corporation’s articles of incorporation provide otherwise, a director or officer will
not be individually liable unless it is proven that (i) the director’s or officer’s acts or omissions constituted a breach
of his or her fiduciary duties, and (ii) such breach involved intentional misconduct, fraud, or a knowing violation of the law. Our articles
of incorporation provide the personal liability of our directors is eliminated to the fullest extent permitted under the NRS.
Section
78.7502 of the NRS permits a company to indemnify its directors and officers against expenses, judgments, fines, and amounts paid in
settlement actually and reasonably incurred in connection with a threatened, pending, or completed action, suit, or proceeding, if the
officer or director (i) is not liable pursuant to NRS 78.138, or (ii) acted in good faith and in a manner the officer or director reasonably
believed to be in or not opposed to the best interests of the corporation and, if a criminal action or proceeding, had no reasonable
cause to believe the conduct of the officer or director was unlawful. Section 78.7502 of the NRS requires a corporation to indemnify
a director or officer that has been successful on the merits or otherwise in defense of any action or suit. Section 78.7502 of the NRS
precludes indemnification by the corporation if the officer or director has been adjudged by a court of competent jurisdiction, after
exhaustion of all appeals, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the
extent that the court determines that in view of all the circumstances, the person is fairly and reasonably entitled to indemnity for
such expenses and requires a corporation to indemnify its officers and directors if they have been successful on the merits or otherwise
in defense of any claim, issue, or matter resulting from their service as a director or officer.
Section
78.751 of the NRS permits a Nevada company to indemnify its officers and directors against expenses incurred by them in defending a civil
or criminal action, suit, or proceeding as they are incurred and in advance of final disposition thereof, upon determination by the stockholders,
the disinterested board members, or by independent legal counsel. If so provided in the corporation’s articles of incorporation,
bylaws, or other agreement, Section 78.751 of the NRS requires a corporation to advance expenses as incurred upon receipt of an undertaking
by or on behalf of the officer or director to repay the amount if it is ultimately determined by a court of competent jurisdiction that
such officer or director is not entitled to be indemnified by the company. Section 78.751 of the NRS further permits the company to grant
its directors and officers additional rights of indemnification under its articles of incorporation, bylaws, or other agreement.
Section
78.752 of the NRS provides that a Nevada company may purchase and maintain insurance or make other financial arrangements on behalf of
any person who is or was a director, officer, employee, or agent of the company, or is or was serving at the request of the company as
a director, officer, employee, or agent of another company, partnership, joint venture, trust, or other enterprise, for any liability
asserted against him and liability and expenses incurred by him in his capacity as a director, officer, employee, or agent, or arising
out of his status as such, whether or not the company has the authority to indemnify him against such liability and expenses.
Neither
our Bylaws nor our Articles of Incorporation include any specific indemnification provisions for our officers or directors against liability
under the Securities Act. Additionally, insofar as indemnification for liabilities arising under the Securities Act may be permitted
to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable.
ITEM
15. RECENT SALES OF UNREGISTERED SECURITIES.
We
claim an exemption from registration pursuant to Section 4(a)(2) and/or Rule 506(b) of Regulation D of the Securities Act, and the rules
and regulations promulgated thereunder in connection with the sales and issuances described above since the foregoing issuances and sales
did not involve a public offering, the recipients were (a) “accredited investors”, and/or (b) had access to similar
documentation and information as would be required in a Registration Statement under the Securities Act. With respect to the transactions
described above, no general solicitation was made either by us or by any person acting on our behalf. The transactions were privately
negotiated, and did not involve any kind of public solicitation. No underwriters or agents were involved in the foregoing issuances and
we paid no underwriting discounts or commissions. The securities sold are subject to transfer restrictions, and the certificates evidencing
the securities contain an appropriate legend stating that such securities have not been registered under the Securities Act and may not
be offered or sold absent registration or pursuant to an exemption therefrom.
During
August 2020, the Company sold a total of 747,000 common shares for cash contributions of $3,735,000 at $5.00 per share.
During
December 2020, the company sold a total of 600,000 common shares for cash contribution of $3,000,000 at $5.00 per share.
ITEM
16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)
Exhibits.
Pursuant
to Item 601 of Regulation S-K:
A
list of exhibits filed with this registration statement on Form S-1 is set forth on the Exhibit Index and is incorporated herein by reference.
ITEM
17. UNDERTAKINGS.
The
undersigned registrant hereby undertakes:
(1)
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to:
(i)
Include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii)
Reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration
Fee” table in the effective registration statement; and
(iii)
Include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2)
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4)
That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser each prospectus filed by the registrant
pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part
of and included in the registration statement; and each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7)
as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x)
for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and
included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the
date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability
purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the
registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of
such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made
in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated
by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a
time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date
(5)
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication
of such issue.
EXHIBIT
INDEX
| Exhibit |
|
|
|
Filed
or Furnished |
|
Incorporated
by Reference |
| Number |
|
|
|
Herewith |
|
Form |
|
Exhibit |
|
Date |
|
File
No. |
| 3.1 |
|
Articles
of Incorporation |
|
|
|
S-1 |
|
3.1 |
|
8/5/2015 |
|
333-206097 |
| 3.2 |
|
Certificate
of Amendment Pursuant to NRS 78.386 and 78.390, effectuating the two for one forward stock split and increasing the authorized shares
of common stock of Addentax Group Corp. from 75,000,000 to 150,000,000 |
|
|
|
8-K |
|
3.1 |
|
7/21/2016 |
|
333-206097 |
| 3.3 |
|
Certificate
of Amendment Pursuant to NRS 78.385 and 78.390, increasing the authorized shares of common stock of Addentax Group Corp. to 1,000,000,000 |
|
|
|
S-1 |
|
3.3 |
|
4/18/2019 |
|
333-230943 |
| 3.4 |
|
Certificate
of Change Pursuant to NRS 78.209, effectuating the 20-for-1 reverse stock split and decreasing the authorized shares of common stock
of Addentax Group Corp. from 1,000,000,000 to 50,000,000 |
|
|
|
8-K |
|
3.1 |
|
3/5/2019 |
|
333-206097 |
| 3.5 |
|
Amended
and Restated Bylaws |
|
|
|
8-K |
|
3.1 |
|
3/15/2019 |
|
333-206097 |
| 4.1 |
|
Form
of Senior Secured Convertible Note |
|
|
|
8-K |
|
4.1 |
|
1/4/2023 |
|
001-41478 |
| 4.2 |
|
Form
of PIPE Warrant |
|
|
|
8-K |
|
10.2 |
|
1/4/2023 |
|
001-41478 |
| 4.3 |
|
Form of Placement Agent Warrant |
|
|
|
8-K |
|
10.8 |
|
1/4/2023 |
|
001-41478 |
| 5.1 |
|
Opinion
of Loeb & Loeb LLP |
|
X |
|
|
|
|
|
|
|
|
| 10.1 |
|
Securities
Purchase Agreement dated January 4, 2023 |
|
|
|
8-K |
|
10.1 |
|
1/4/2023 |
|
001-41478 |
| 10.2 |
|
Form
of Amendment No. 1 to Securities Purchase Agreement dated January 10, 2023 |
|
|
|
8-K |
|
10.1 |
|
1/10/2023 |
|
001-41478 |
| 10.3 |
|
Form
of Registration Rights Agreement |
|
|
|
8-K |
|
10.3 |
|
1/4/2023 |
|
001-41478 |
| 10.4 |
|
Form
of Security and Pledge Agreement |
|
|
|
8-K |
|
10.4 |
|
1/4/2023 |
|
001-41478 |
| 10.5 |
|
Form
of Guaranty Agreement. |
|
|
|
8-K |
|
10.5 |
|
1/4/2023 |
|
001-41478 |
10.6 |
|
Form
of Voting Agreement |
|
|
|
8-K |
|
10.6 |
|
1/4/2023 |
|
001-41478 |
| 10.7 |
|
Form
of Placement Agency Agreement dated January 4, 2023 |
|
|
|
8-K |
|
10.7 |
|
1/4/2023 |
|
001-41478 |
| 23.1 |
|
Consent of BF Borgers CPA PC |
|
X |
|
|
|
|
|
|
|
|
| 23.2 |
|
Consent
of Loeb & Loeb LLP (included in Exhibit 5.1) |
|
X |
|
|
|
|
|
|
|
|
| 107 |
|
Filing
Fee Table |
|
X |
|
|
|
|
|
|
|
|
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement on Form S-1 to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of Luohu District, Shenzhen City, China, on January 25,
2023.
| |
ADDENTAX
GROUP CORP. |
| |
|
| |
/s/
Hong Zhida |
| |
Hong
Zhida |
| |
CEO,
President, Secretary and Director |
| |
(Principal
Executive Officer) |
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities
and on the dates indicated.
| Signature |
|
Title |
|
Date |
| |
|
|
|
|
| /s/
Hong Zhida |
|
CEO,
President, Secretary and Director |
|
January
25, 2023 |
| Hong
Zhida |
|
(Principal
Executive Officer) |
|
|
| |
|
|
|
|
| /s/
Huang Chao |
|
CFO
and Treasurer |
|
January
25, 2023 |
| Huang
Chao |
|
(Principal
Financial and Accounting Officer) |
|
|
| |
|
|
|
|
| /s/
Hong Zhiwang |
|
|
|
January
25, 2023 |
| Hong
Zhiwang |
|
Director |
|
|
| |
|
|
|
|
| /s/
Yu Jiaxin |
|
|
|
January
25, 2023 |
| Yu
Jiaxin |
|
Independent
Director |
|
|
| |
|
|
|
|
| /s/
Alex P. Hamilton |
|
|
|
January
25, 2023 |
| Alex
P. Hamilton |
|
Independent
Director |
|
|
| |
|
|
|
|
| /s/
Jiangping (Gary) Xiao |
|
|
|
January
25, 2023 |
| Jiangping
(Gary) Xiao |
|
Independent
Director |
|
|
| */s/
Hong Zhida |
|
| Hong
Zhida |
|
| Attorney-in-Fact |
|
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