As filed with the Securities and Exchange Commission on May 17, 2021January 25, 2023

Registration No. 333-230943333-[   ]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM S-1/A

(Amendment No. 8)S-1

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933

ADDENTAX GROUP CORP.

(Exact name of registrant as specified in its charter)

Kingkey 100, Block A, Room 4805

Luohu District, Shenzhen City, China 518000

+(86) 755 8696 1405
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:

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: [X]☒

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.

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. [  ]☐

CALCULATION OF REGISTRATION FEE

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.

EXPLANATORY NOTE

This Registration Statement contains two prospectuses, as set forth below.

The Resale Prospectus is substantively identical to the Public Offering Prospectus, except for the following principal points:

The Registrant has included in this Registration Statement a set of alternate pages after the back cover page of the Public Offering Prospectus (the “Alternate Pages”) to reflect the foregoing differences in the Resale Prospectus as compared to the Public Offering Prospectus. The Public Offering Prospectus will exclude the Alternate Pages and will be used for the public offering by the Registrant. The Resale Prospectus will be substantively identical to the Public Offering Prospectus except for the addition or substitution of the Alternate Pages and will be used for the resale offering by the selling stockholders.

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 MAY 17, 2021JANUARY 25, 2023

PRELIMINARY PROSPECTUS

Addentax Group Corp.

5,000,000 197,227,433 Shares of Common Stock

This isprospectus relates to the initial public offeringresale by the selling stockholders named in this prospectus from time to time of Addentax Group Corp. We are offering 5,000,000up 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:

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 firm commitment basis. Weregular 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 expectpreviously did not affect the public offering priceCompany as the Company’s auditor is subject to be $5.00 per share.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.

We areInvestment in our common stocks involves a reporting company under Section 15(d)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 Act of 1934, as amended. Our common stock is currently quoted onCommission, which are incorporated by reference in this prospectus and in any applicable prospectus supplement. You should carefully read this prospectus and the OTCQB Marketplace (the “OTCQB”) underaccompanying prospectus supplement, together with the symbol “ATXG.” The closing price fordocuments we incorporate by reference, before you invest in our common stock on May 17, 2021, was $7.50 per share. There is a limited public trading market for our common stock. We have applied to list our common stock on the Nasdaq Capital Market under the symbol “ATXG.”stocks..

Investing in ourNeither the U.S. Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities involves risks. You should carefully consideror passed upon the risk factors beginning on page 8accuracy or adequacy of this prospectus and set forth in the documents incorporated by reference herein before making any decision to invest in our securities.

We have also granted a 45-day optionregistration statement. Any representation to the underwriter to purchase up to 750,000 additional shares of common stock solely to cover over-allotments, if any.

The underwriter expects to deliver our shares of common stock to purchasers in this offering on or about [●], 2021.

contrary is a criminal offense.

The date of this prospectus is                  , 20212023

TABLE OF CONTENTS

ABOUT THIS PROSPECTUS

This prospectus is part of athe registration statement that we filed with the Securities and Exchange Commission (the “SEC”“SEC”) pursuant to which the selling stockholders named herein may, from time to time, offer and sell or otherwise dispose of the “Commission”). You should rely only oncommon 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 or any supplement or amendment hereto. Neither we, norand the underwriter have authorized any person to providedocuments incorporated by reference into this prospectus include important information about us, the securities being offered and other information you with different information. Neither we, nor the underwriter are offering to sell, or seeking an offer to buy,should know before investing in our common stock in any jurisdiction where such offer or sale is not permitted.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 supplementinformation or amendment heretoto 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 their respective dates, regardlessthe 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 time of deliveryUnited States: We have not done anything that would permit the offering or possession or distribution of this prospectus orin 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 salerestrictions relating to, the offering of our common stock. Our business, financial condition, results of operations and prospects may have changed since that date. On February 27, 2019, we effected a 1-for-20 reverse split on our shares of common stockthe securities described herein and the proportional reductiondistribution of our total authorized shares of common stock from 506,920,000 shares to 25,346,004 shares.

You should read this prospectus together with additional information described under “Where You Can Find More Information”, beginning on page 61, before making an investment decision.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:

Unless otherwise noted, all translations from Chinese Yuan toThe Company’s reporting currency is the U.S. dollars usingdollar. The functional currency of the exchange rate refers toparent company is the exchange rate quoted on http://www.oanda.com on March 31, 2020, which was RMB 7.10 to USD$1.00. We make no representation thatU.S. dollar and the functional currency of the Company’s operating subsidiaries is the Chinese Yuan amounts referred to in this prospectus could have been or could be converted into U.S. dollars at any particular rate or at all.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 garment manufacturerNevada 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 logistics service provider basedits 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 are listed on the OTCQB under the symbol of “ATXG”. We classifiedclassify our businesses into two revenue segments for the fiscal year ended 2020 and in previous fiscal years: (i)four segments: garment manufacturing, logistics services, property management and (ii) logistics services. During the fiscal year 2021, we developed a new business segment: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 wholesalerswholesaler located in China.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 five indirectfour wholly owned subsidiaries, of the Company, 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”), Dongguan Yingxi Daying Commercial Co., Ltd (“DY”), Dongguan Yushang Clothing Co., Ltd (“YS”), and Shantou Yi Bai Yi Garments Co., Ltd (“YBY”) 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 services business consists of delivery and courier services covering approximately 79 cities in approximately 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 twofour wholly owned subsidiaries, namely Shenzhen Xin Kuai Jie Transportation Co., Ltd (“XKJ”) and, 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 resellingresale of epidemic prevention supplies purchased from third parties in both domestic and overseas markets. We conduct our manufacturing of the epidemic prevention products in YS.Dongguan Yushang Clothing Co., Ltd (“YS”). We conduct the trading of epidemic prevention suppliers through Addentax Group Corp. (“ATXG”) and Shenzhen Qianhai Yingxi Industrial Chain Services Co., Ltd (“YX”), an indirecta wholly owned subsidiary of the Company.Company, which is located in the Guangdong province in China.

Recent Developments

Business ObjectivesInitial Public Offering

Garment Manufacturing Business

We believeOn August 30, 2022, Addentax entered into an underwriting agreement with Network 1 Financial Securities, Inc., as representative of the strengthunderwriters (the “Representative”), in connection with its initial public offering (“IPO”) of our garment manufacturing business segment is mainly due5,000,000 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 our consistent emphasis on exceptional qualitypurchase 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 timely delivery of our products. The primary business objective for our garment manufacturing business segment is to expand our customer base and improve our profit.

Logistics Services Business

The business objective and future plan for our logistics services business segment is to establish an efficient logistic system and to build a nationwide delivery and courier network in China. As of December 31, 2020, we provide logistics services to over 79 cities in approximately seven provinces and two municipalities. We expect to develop an additional 20 logistics points in existing serving cities and improve the Company’s profit for the fiscal year ending 2021.

Epidemic Prevention Supplies Business

The primary business objective of our epidemic prevention supplies business segment is to take the advantage of our resources in supply chain from our garment manufacturing business segment to facilitate and maximize the production, distribution and resale of epidemic prevention supplies, in order to increase our revenue and improve our net profit.other related expenses.

Competitive StrengthsPIPE Financing

We believe we have the following competitive strengths:

Cost-effective production. We have adopted a vertical integration production process. We produce garments in our own production facilities and employ our in-house transport teams to deliver garments to our customers. This one-stop service optimizes production efficiency and saves costs by lowering the cost per unit, thereby achieving economies of scale.

Stringent quality control process. AsOn 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 December 31, 2020, we had 7 employeesapproximately $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 production department that are responsible for conducting our quality control process. We implement a stringent quality control process which monitors various stagesconversion of our garment manufacturing business, including sampling checks of semi-finished productscertain convertible notes held by the selling stockholders and finished products. We prepare inspection reports(ii) up to address the quality problems and make recommendations16,077,172 PIPE Warrants were issued (the “PIPE Offering”). Further, up to improve the quality of our products. During final product inspection, we pay special attention700,000 Placement Agent Warrants were issued to the measurements, workmanship, ironingplacement agent in connection to the PIPE Offering. The PIPE Warrants and packagingthe Placement Agent Warrants have an exercise price of our products to help best ensure that$1.25 per share, and will become exercisable on the qualitydate of our products complyissuance 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 specifications, standards and requirements of our customers.

Strong design capabilities. Our design team works closely with our customers to understand their needs and make recommendations to them. Our design team also conducts market research and attend industry exhibitions to understand the latest market trends. As of December 31, 2020, our design team consisted of five members.

Extensive delivery network. Our logistics services business has nine routes and covers 79 cities in approximately seven provinces and two municipalities in the PRC.

Stable Production Supply Chain. We integrated various epidemic prevention suppliers located in China & Malaysia and established strategic cooperation relationship with them, which can help us to purchase the epidemic prevention products in competitive lower price and stable supply. We also received mask production license from relevant governance and somesigning of the productsPIPE Securities Purchase Agreement, we manufactured passedentered into a Registration Rights Agreement (the “Registration Rights Agreement”) to file with the inspectionSecurities and Exchange Commission a Registration Statement covering the resale of quality inspection agency.

Our Strategies

Key elementsall of our business and growth strategies include the following:registrable securities under the Registration Rights Agreement.

Sales of raw materials. We intend to enter into exclusive agreements with textile and garment suppliers in Southeast China to be their exclusive agent and supply their textiles and garments to our customers. To execute this plan, we intend to set up several retailers for the sales of textiles and garments to retail customers and supply the textiles and garments exclusively to various high-end fashion brands.

Develop our own brands. We intend to develop our own brands that focus on fast fashion with teenagers being our primary target customers. We plan to adopt a low cost strategy at the early stage and improve the quality of our products after increasing our market share. We are in the process of registering a trademark for our own brand and intend to start our advertising campaign after the registration of this trademark. We plan to distribute our products in different channels, including our own retailers, co-operative retailers and franchisees.

Expand our delivery network. As of December 31, 2020, we provide logistics service to over 79 cities in approximately seven provinces and two municipalities. We expect to develop an additional 20 logistics points in existing serving cities and improve the Company’s profit for the fiscal year ending 2021.

Develop our logistics services management application. We intend to develop our own mobile application and integrate with to replace our old internal system. We expect this mobile application to improve our routes optimization, courier goods tracking, security  of courier goods, booking time required by our customers, and customer care.

Develop international logistics services and warehousing services. We intend to develop international logistics services for customers located all over the world and international warehousing services.

Develop our epidemic prevention supply chain. We intend to develop our own epidemic prevention supply chain as we see the potential and opportunity of medical and health industry. We expect to establish a one-step epidemic prevention supply chain from product manufacturing line establishment to sales networking construction. Currently, we are focusing on the civil mask market in China and provide cost-effective masks to customers. We will improve our product quality constantly and develop oversee markets.

Our Corporate Structure

Notes:

 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.”

Risks Related to Our BusinessPRC Limitation on Overseas Listing and Share Issuances

OurNeither 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 implementpay dividends to its stockholders and to service any debt it may incur may depend upon dividends paid by our business strategyPRC 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 numerous riskslaws 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 uncertainties that you shouldhas 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 awareunable to fully conduct inspection of before making an investment decision. We face many risks inherentour 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 businessreported financial information and procedures or quality of the financial statements, which would adversely affect us and our industry generally. You should carefully consider allsecurities.

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 set forth in this prospectus and, in particular,to the informationSEC. According to the PCAOB, its December 2021 determinations under the heading “Risk Factors,” priorHFCAA remain in effect. On December 15, 2022, the PCAOB secures complete access to making an investmentinspect, 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 common stock. These risks include, among others,securities is prohibited under the following: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:

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)+(86) 755 8696 1405.8233 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

Unless otherwise indicated, all information in this prospectus gives effect to a 1-for-20 reverse stock split of our common stock effected on February 27, 2019.

SUMMARY FINANCIAL AND OTHER DATA

The following tables set forth our summary historical financial data for the periods presented. The following summary financial data for the years ended March 31, 2020 and 2019 are derived from our audited financial statements appearing elsewhere in this prospectus. The following summary financial data for the nine-month periods ended December 31, 2020 and 2019 and the selected balance sheet data as of December 31, 2020 are derived from our unaudited financial statements appearing elsewhere in this prospectus.

This summary financial data should be read together with the historical financial statements and related notes to those statements, as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which are included elsewhere in this prospectus.

Our common stocks were first offered publicly in response toour 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, such as:some of which are beyond our control, including, but not limited to:

In addition, the securities markets have from time to time experienced significantThese factors and any corresponding price and volume fluctuations that are not related to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stocks and result in substantial losses being incurred by our investors. In the shares.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 .

We may never be able to pay dividends and are unlikely to do so.PRIVATE PLACEMENT OF NOTES AND WARRANTS

ToOn 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:

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 we have not paid, nor do we intend to paycommencing on the original date of issuance. If an Event of Default (as defined in the foreseeable future, dividends onNotes) 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, even if we become profitable. Earnings, if any, are expectedbeginning after the original date of issuance at an initial conversion price of $1.25 per share. The conversion price is subject to be usedcustomary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to advance our activities and for working capital and general corporate purposes, rather than to make distributions to stockholders. Since we are not inprice-based adjustment, on a financial position to pay dividends on our common stock and future dividends are not presently being contemplated, investors are advised that return on investment in our common stock is restricted to an appreciation“full ratchet” basis, in the share price. The potential or likelihoodevent of an increase in share price is uncertain.

In addition, under Nevada law, we may only pay dividends subject to our ability to service our debts as they become due and provided that our assets will exceed our liabilities after the dividend. Our ability to pay dividends will therefore depend on our ability to generate sufficient profits. Further, because of the various rules applicable to our operations in China and the regulations on foreign investments as well as the applicable tax law, we may be subject to further limitations on our ability to declare and pay dividends to our shareholders.

Shareholders may be diluted significantly through our efforts to obtain financing and satisfy obligations through the issuance of securities.

Wherever possible, our board of directors will attempt to use non-cash consideration to satisfy obligations. In many instances, we believe that the non-cash consideration will consistany issuances of shares of our common stock, warrants to purchaseor 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 other securities. Our boardexercise 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 directorsits 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 authority, without action or votealso entered into the Registration Rights Agreement to file with the SEC a Registration Statement covering the resale of all of the shareholders,registrable securities under the Registration Rights Agreement.

The Notes will rank senior to issue all or partoutstanding and future indebtedness of the authorized but unissued sharesCompany 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 common stock or warrantsthe 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 purchase such sharesbe 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 common stock. In addition, we may attemptthe Company (the “Guaranty”) pursuant to raise capital by sellingwhich 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 possibly at a discount to market in the future. These actions will result in dilutionissuable upon conversion of the ownership interestsNotes, in compliance with the rules of existing shareholders and may further dilute common stock book value, andthe Nasdaq Capital Market (the “Stockholder Approval”). It is a condition to the closing that dilution may be material. Such issuances may also servethe Company enter into voting agreements with certain significant stockholders of the Company (each, a “Stockholder”), pursuant to enhance existing management’s abilitywhich each Stockholder will agree, with respect to maintain controlall of us, because the shares may be issuedvoting securities of the Company that such Stockholder beneficially owns as of the date thereof or thereafter, to parties or entities committed to supporting existing management.vote in favor of the Stockholder Approval.

InPursuant to an placement agency agreement dated January 4, 2023 between the event that our shares are traded, they may trade under $5.00 per shareCompany and thus will beUnivest 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 penny stock. Trading in penny stocks has many restrictions and these restrictions could severely affectcash fee equal to 7% of the price and liquiditygross proceeds raised by the Company from the sale of our shares.

In the event that our shares are traded, and our stock trades below $5.00 per share, our stock would be known as a “penny stock”, which is subject to various regulations involving disclosures to be given to you priorsecurities 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 any penny stock.the aggregate number of conversion shares under the PIPE Securities Purchase Agreement. The SEC has adopted regulations which generally define a “penny stock” to be any equity security that has a market price of less than $5.00 per share,Placement Agent Warrants contain provisions permitting cashless exercise subject to certain exceptions. Depending on market fluctuations, our common stock could be consideredconditions and registration rights to befile with the SEC a “penny stock”. A penny stock is subject to rules that impose additional sales practice requirements on broker/dealers who sell these securities to persons other than established Members and accredited investors. For transactions covered by these rules,Registration Statement covering the broker/dealer must make a special suitability determination for the purchaseresale of these securities. In addition, he must receive the purchaser’s written consent to the transaction prior to the purchase. He must also provide certain written disclosures to the purchaser. Consequently, the “penny stock” rules may restrict the ability of broker/dealers to sell our securities, and may negatively affect the ability of holders of shares of our common stock to resell them. These disclosures require you to acknowledge that you understand the risks associated with buying penny stocks and that you can absorb the loss of your entire investment. Penny stocks are low priced securities that do not have a very high trading volume. Consequently, the priceall of the stock is often volatile and you may not be able to buy or sell the stock when you want to.Placement Agent Warrant shares.

We will have discretion in applying a portion of the net proceeds of this offering and may not use these proceeds in ways that will enhance the market value of our common stock.

Our management will have considerable discretion in the application of the proceeds received by us from this offering. Such proceeds may be used to purchase and sell raw materials, grow our brand and for working capital and general corporate purposes. You will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. You must rely on the judgment of our management regarding the application of the net proceeds of this offering. The net proceeds may be used for corporate purposes that do not improve our profitability or increase our common stock price. The net proceeds from this offering may also be placed in investments that do not produce income or that lose value. Future issuances of capital stock may depress the trading price of our common stock. Any issuance of shares of our common stock after this offering could dilute the interests of our existing stockholders and could substantially decrease the trading price of our common stock. We may issue additional shares of common stock in the future for a number of reasons, including to finance our operations and business strategy (including in connection with acquisitions, strategic collaborations or other transactions).

Sales of a substantial number of shares of our common stock in the public market could depress the market price of our common stock, and impair our ability to raise capital through the sale of additional equity securities. We cannot predict the effect that future sales of our common stock or other equity-related securities would have on the market price of our common stock.

USE OF PROCEEDS

After deductingAll common stocks offered by this prospectus are being registered for the estimated underwriting commissionsaccounts of the selling stockholders and estimated offering expenses payable by us, we expectwill 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 receivethe 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 $22,424,292 from this offering. We anticipate that the proceedssuch exercise will be applied as follows:

The amount and timingapproximately $15 million prior to the payment of these expenditures will vary depending on a number of factors, including the amount of cash generated by our operations and the rate of growth,Placement Agent fee. We intend to use those proceeds, if any, of our business.

Although we may use a portion of the proceeds for the acquisition of, or investment in, companies, technologies, products or assets that complement our business, we have no present understandings, commitments or agreements to enter into any acquisitions or make any investments. We cannot assure you that we will make any acquisitions or investments in the future.general corporate purposes.

CAPITALIZATION

The following table sets forth our capitalization as of December 31, 2020:

You should read this table in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and related notes included elsewhere in this prospectus.

DILUTION

If you invest in our common stock, your interest will be diluted immediately to the extent of the difference between the public offering price per share you will pay in this offering and the pro forma as adjusted net tangible book value per share of our common stock after this offering. Our net tangible book value as of December 31, 2020 was ($3,065,809), or ($0.12) per share of common stock. Our pro forma net tangible book value per share set forth below represents our total tangible assets less total liabilities, divided by the number of shares of our common stock outstanding on December 31, 2020.

If the shares are sold at the public offering price of $5.00 per share, which is set forth on the cover page of this prospectus, after deducting the estimated underwriter commissions and offering expenses payable by us, the pro forma as adjusted net tangible book value as of December 31, 2020 would have been $19,358,483, or $0.61 per share. This represents an immediate increase in net tangible book value to existing shareholders of $0.73 per share. The public offering price per share will significantly exceed the net tangible book value per share. Accordingly, new investors who purchase shares of common stock in this offering will suffer an immediate dilution of their investment of $4.39 per share. The following table illustrates this per share dilution to the new investors purchasing shares of common stock in this offering:

A $1.00 increase (decrease) in the public offering price of $5.00 per share would increase (decrease) the pro forma net tangible book value by $4,600,159, the pro forma net tangible book value per share after this offering by $0.14 per share and the dilution in pro forma net tangible book value per share to investors in this offering by $0.86 per share, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriter commissions and estimated offering expenses payable by us.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common stock is currently quoted on the OTCQB under the symbol “ATXG.”

Trading in stocks quoted on the OTCQB is often thin and is characterized by wide fluctuations in trading prices due to many factors that may have little to do with a company’s operations or business prospects. We cannot assure you that there will be a market for our common stock in the future.

We received our trading symbol on September 12, 2016 and were first quoted on September 12, 2016 but no shares were traded until December 12, 2016.

The following table sets forth the high and low trading prices of one share of our common stock for each fiscal quarter over the past two fiscal years, and April 1, 2019 to the date of this prospectus. The quotations provided are for the over the counter market, which reflect interdealer prices without retail mark-up, mark-down or commissions, and may not represent actual transactions. Our common stock trades on a limited, sporadic and volatile basis. These high and low bid prices per share of common stock have been adjusted to give effect to the 1-for-20 reverse stock split of our common stock effected on February 27, 2019.

Holders of Our Common Stock

26,693,004 shares of common stock were issued and outstanding as of May 17, 2021. They were held by a total of 580 shareholders of record. The holders of common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. Holders of the common stock have no preemptive rights and no right to convert their common stock into any other securities. There are no redemption or sinking fund provisions applicable to the common stock.

Dividend Policy

No cash dividends were paid on our shares of common stock during the fiscal years ended March 31, 2020 and March 31, 2019. We have not paid any cash dividends since October 28, 2014 (inception) and do not foresee declaring any cash dividends on our common stock in the foreseeable future.

Securities Authorized for Issuance under Equity Compensation Plans

We do not have in effect any compensation plans under which our equity securities are authorized.

SELECTED HISTORICAL FINANCIAL AND OPERATING DATA

The following tables set forth our summary historical financial data for the periods presented.

The following summary financial data for the years ended March 31, 2020 and 2019 are derived from our audited financial statements appearing elsewhere in this prospectus. The following summary financial data for the nine-month periods ended December 31, 2020 and 2019 and the selected balance sheet data as of December 31, 2020 are derived from our unaudited financial statements appearing elsewhere in this prospectus.

This summary financial data should be read together with the historical financial statements and related notes to those statements, as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which are included elsewhere in this prospectus.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

The following discussion should be read in conjunction with our “Selected Historical Financial and Operation Data” and our consolidated financial statements and related notes and other financial information included elsewhere in this prospectus. In preparation of this prospectus, we reperformed the assessment on goodwill for impairment test as of March 31, 2020 and due to the impact on business environment of Covind-19 outbreak in PRC, it was determined that recoverable amount of one of the Company’s reporting units was lower than the carrying amount of the goodwill recorded as of March 31, 2018. Therefore, it was concluded that the carrying amount of said goodwill should have been fully impaired as of March 31, 2018. The Company has restated the impairment of goodwill as if it was fully impaired during the year ended March 31, 2018. The Comprehensive Loss for the year ended March 31, 2020 decreased by $475,003. The long live assets as of March 31, 2019 decreased by $475,003. The accumulative accumulated deficits as of March 31, 2019 increased by the same amount. The restatement has no impact on previously reported “cash flows” amount. In addition to historical information, the following discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Where possible, we have tried to identify these forward-looking statements by using words such as “anticipate,” “believe,” “intends,” or similar expressions. Our actual results could differ materially from those anticipated by the forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and elsewhere in this prospectus.

This prospectus contains statements that we believe are, or may be considered to be, “forward-looking statements”. All statements other than statements of historical fact included in this prospectus regarding the prospects of our industry or our prospects, plans, financial position or business strategy, may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking words such as “may,” “will,” “expect,” “intend,” “estimate,” “foresee,” “project,” “anticipate,” “believe,” “plans,” “forecasts,” “continue” or “could” or the negatives of these terms or variations of them or similar terms. Furthermore, such forward-looking statements may be included in various filings that we make with the Securities and Exchange Commission or press releases or oral statements made by or with the approval of one of our authorized executive officers. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that these expectations will prove to be correct. These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. Readers are cautioned not to place undue reliance on any forward-looking statements contained herein, which reflect management’s opinions only as of the date hereof. Except as required by law, we undertake no obligation to revise or publicly release the results of any revision to any forward-looking statements. You are advised, however, to consult any additional disclosures we make in our reports to the SEC. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this prospectus.

You should read the matters described in “Risk Factors” and the other cautionary statements made in this prospectus, and incorporated by reference herein, as being applicable to all related forward-looking statements wherever they appear in this prospectus. We cannot assure you that the forward-looking statements in this prospectus will prove to be accurate and therefore prospective investors are encouraged not to place undue reliance on forward-looking statements.

Critical Accounting Policies and Estimates

The discussion and analysis of the Company’s financial condition and results of operations are based upon its consolidated audited financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these audited financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities. On an on-going basis, management evaluates past judgments and estimates, including those related to bad debts, accrued liabilities, convertible promissory notes and contingencies. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The accounting policies and related risks described in the Company’s Annual Report on Form 10-K as initially filed with the Securities and Exchange Commission on July, 2020 are those that depend most heavily on these judgments and estimates.

Corporate History

Addentax Group Corp. was incorporated in the State of Nevada on October 28, 2014. We were originally incorporated to produce images on multiple surfaces, such as glass, leather, plastic, ceramic, textile, and others using a 3D sublimation vacuum heat transfer machine. We no longer pursue opportunities related to 3D printing positioning.

We have a fiscal year-end of March 31. On July 12, 2016, we filed an amendment to our articles of incorporation, which amendment was effectuated by our transfer agent on July 20, 2016. The certificate of amendment was filed in order to undertake a two for one forward stock split and increase our authorized shares of common stock, par value $0.001 per share, to 150,000,000 shares, which forward stock split has been retroactively reflected throughout this prospectus. On February 27, 2019, we filed a Certificate of Change to effect a 1-for-20 reverse stock split, which reduced our authorized shares of common stock to 50,000,000 shares.

Current Business

Effective December 28, 2016, the Company executed a Sale & Purchase Agreement (“S&P”) for the acquisition of 100% of the shares of Yingxi Industrial Chain Group Co., Ltd. (“YICG”), a company incorporated under the laws of the Republic of Seychelles. YICG is currently a garment manufacturer. Intending to diversify its service portfolio, the Company plans to develop another branch of business: international supply chain management consulting service, which will focus exclusively on the textile & garments industry. The Company plans to assist clients to open textile and garment sales outlets throughout China. The Company will also provide assistance services in plan implementation. Pursuant to the S&P, which transaction closed on September 25, 2017, the Company issued five hundred million (500,000,000) restricted common shares of the Company to the owners of Yingxi Industrial Chain Group Co., Ltd. in consideration for the acquisition of YICG.

After the Share Exchange, YICG’s business became our business. We are a garment manufacturer and logistics service provider based in China. Our common stock is listed on the OTCQB under the symbol of “ATXG”. We classified our businesses into two revenue segments for the fiscal year ended 2020 and in previous fiscal years: (i) garment manufacturing and (ii) logistics services. During the fiscal year 2021, we developed a new business segment: epidemic prevention supplies.

Our garment manufacturing business consists of sales made principally to wholesalers located in China. 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 delivery requirements for our customers. We conduct our garment manufacturing operations through five indirect wholly owned subsidiaries of the Company, namely Dongguan Heng Sheng Wei Garments Co., Ltd (“HSW”), Shantou Chenghai Dai Tou Garments Co., Ltd (“DT”), Dongguan Yingxi Daying Commercial Co., Ltd (“DY”), Dongguan Yushang Clothing Co., Ltd (“YS”), and Shantou Yi Bai Yi Garments Co., Ltd (“YBY”) which are located in the Guangdong province, China.

Our logistics services business consists of delivery and courier services covering approximately 79 cities in approximately 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 two wholly owned subsidiaries, namely Shenzhen Xin Kuai Jie Transportation Co., Ltd (“XKJ”) and Shenzhen Hua Peng Fa Logistic Co., Ltd (“HPF”), which are located in the Guangdong province, China.

Our epidemic prevention supplies business consists of manufacturing and distribution of epidemic prevention products and reselling of epidemic prevention supplies purchased from third parties in both domestic and overseas markets. We conduct our manufacturing of the epidemic prevention products in YS. We conduct the trading of epidemic prevention suppliers through Addentax Group Corp. (“ATXG”) and Shenzhen Qianhai Yingxi Industrial Chain Services Co., Ltd (“YX”), an indirect wholly owned subsidiary of the Company.

Business Objectives

Garment Manufacturing Business

We believe the strength of our garment manufacturing business segment is mainly due to our consistent emphasis on exceptional quality and timely delivery of our products. The primary business objective for our garment manufacturing business segment is to expand our customer base and improve our profit.

Logistics Services Business

The business objective and future plan for our logistics service segment is to establish an efficient logistics system and to build a nationwide delivery and courier network in China. As of December 31, 2020, we provide logistics services to over 79 cities in approximately seven provinces and two municipalities. We expect to develop an additional 20 logistics points in existing serving cities and improve the Company’s profit for the fiscal year ending 2021.

Epidemic Prevention Supplies Business

The primary business objective of our epidemic prevention supplies business segment is to take the advantage of our resource in supply chain from our garment manufacturing business segment to facilitate and maximize the production, distribution and resale of epidemic prevention supplies, in order to increase our revenue and improve our net profit.

Seasonality of Business

Our business is affected by seasonal trends, with higher levels of garment sales in our second and third quarters and higher logistics service revenue in our third and fourth quarters. These trends primarily result from the timing of seasonal garment manufacturing shipments and holiday periods in the logistic segment.

Credit period

Garment Manufacturing Business

For our new customers, we generally require orders placed to be backed by advances or deposits. For our long-term and established customers with good payment track records, we generally provide payment terms between 30 to 180 days following their acknowledgement of receipt of goods.

Logistics Services Business

For our logistics service, we generally receive payments from the customers between 30 to 90 days following the date of the registration of our receipt of packages.

Epidemic Prevention Supplies Business

For our epidemic prevention supplies business, we generally receive payment from the customers within 30 days following the delivery of finished goods. We would also give our long-term customers with a 12 months long credit term policy to maintain a good business relationship.

Markets

Currently, our market focuses on small and medium-sized enterprises in China who have business expansion plans.

Economic Uncertainty

Our business is dependent on consumer demand for our products and services. We believe that the significant uncertainty in the economy in China has increased our clients’ sensitivity to the cost of our products and services. We have experienced continued pricing pressure. If the economic environment becomes weak, the economic conditions could have a negative impact on our sales growth and operating margins, cash position and collection of accounts receivable. Additionally, business credit and liquidity have tightened in China. Some of our suppliers and customers may face credit issues and could experience cash flow problems and other financial hardships. These factors currently have not had an impact on the timeliness of receivable collections from our customers. We cannot predict at this time how this situation will develop and whether accounts receivable may need to be allowed for or written off in the coming quarters.

Despite the various risks and uncertainties associated with the current economy in China, we believe our core strengths will continue to allow us to execute our strategy for long-term sustainable growth in revenue, net income and operating cash flow.

Sufficiency of Cash Flows

Because current cash balances and our projected cash generated from operations are not sufficient to meet our cash needs for working capital and capital expenditures, management intends to seek additional equity or obtain additional credit facilities. However, we may be unable to raise additional capital upon terms acceptable to us. The sale of additional equity will result in additional dilution to our shareholders. A portion of our cash may be used to acquire or invest in complementary businesses or products or to obtain the right to use complementary technologies. From time to time, in the ordinary course of business, we evaluate potential acquisitions of such businesses, products or technologies.

Summary of Critical Accounting Policies

We have identified critical accounting policies that, as a result of judgments, uncertainties, uniqueness and complexities of the underlying accounting standards and operation involved could result in material changes to our financial position or results of operations under different conditions or using different assumptions.

Estimates and Assumptions

We regularly evaluate the accounting estimates that we use to prepare our financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

Revenue Recognition

Revenue is generated through sale of goods and delivery services. Revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods and services. The Company applies the following five-step model in order to determine this amount:

The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery.

For all reporting periods, the Company has not disclosed the value of unsatisfied performance obligations for all product and service revenue contracts with an original expected length of one year or less, which is an optional exemption that is permitted under the adopted rules.

Leases

The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities in our consolidated balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in the consolidated balance sheets.

ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the leases do not provide an implicit rate, The Company generally use the incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Recently issued and adopted accounting pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. This standard requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. This standard will be effective for the Company on April 1, 2023. The Company is currently evaluating the impact the adoption of this ASU will have on its consolidated financial statements.

The Company reviews new accounting standards as issued. Management has not identified any other new standards that it believes will have a significant impact on the Company’s consolidated financial statements.

Results of Operations for the nine months ended December 31, 2020 and 2019

The following tables summarize our results of operations for the nine months ended December 31, 2020 and 2019. The table and the discussion below should be read in conjunction with our consolidated financial statements and the notes thereto appearing elsewhere in this report.

Revenue

Revenue generated from our garment manufacturing business contributed $5,186,042 or 24.7% of our total revenue for the nine months ended December 31, 2020. Revenue generated from our garment manufacturing business contributed $3,517,009 or 34.0% of our total revenue for the nine months ended December 31, 2019. The significant increase of approximately $1.7 million was mainly because revenue in production capacity increased from our newly establish subsidiary YBY.

Revenue generated from our logistics services logistic business contributed $3,664,409 or 17.4% of our total revenue for the nine months ended December 31, 2020. Revenue generated from our logistics services business contributed $4,665,387 or 57.0% of our total revenue for the nine months ended December 31, 2019. The decrease mainly attributed to as adverse effects from COVID-19, we cannot smoothly go through the logistics services business.

Revenue generated from our property management and subleasing business contributed $294,759 or 1.4% of our total revenue for the nine months ended December 31, 2020. This is a new business segment developed in current period and there was no revenue for the nine months ended December 31, 2019.

Revenue generated from our epidemic prevention supplies business was contributed $11,868,854, or 56.5% of our total revenue for the nine months ended December 31, 2020. This is a new business segment developed during the fiscal year 2020. It included revenue from trading of merchandises and revenue from sales of our own products. The revenue from trading of merchandise was $11,791,672, representing 99.3% of total revenue from the epidemic prevention suppliers business.

Total revenue for the nine months ended December 31, 2020 and 2019 were $21,014,064 and $8,182,396, respectively, representing approximately a 156.8% increase compared with the nine months ended December 31, 2019. The significant increase was mainly because of the increase of garment manufacturing production capacity in YBY, a newly setup subsidiary, and the epidemic prevention supplies business newly developed in current period.

Cost of revenue

For our garment manufacturing business, we purchase the majority of our raw materials directly from numerous local fabric and accessories suppliers. Aggregate purchases from our five largest raw material suppliers represented approximately 97.7% and 91.2% of raw materials purchases for the nine months ended December 31, 2020 and 2019, respectively. One supplier provided more than 10% of our raw materials purchases for both nine months ended December 31, 2020 and 2019, respectively. We have not experienced difficulty in obtaining raw materials essential to our business, and we believe we maintain good relationships with our suppliers.

Raw material costs for our garment manufacturing business was approximately 71.5% of our total garment manufacturing business revenue in the nine months ended December 31, 2020, compared with approximately 72.5% in the nine months ended December 31, 2019. The increased in percentages was mainly due to the purchase cost of the raw materials dropped.

Labor costs for our garment manufacturing business was approximately 19.9% of our total garment manufacturing business revenue in the nine months ended December 31, 2020, compared with approximately 16.2% in the nine months ended December 31, 2019. The increase in percentages was mainly attributed to the rising wages in the PRC.

Overhead and other expenses for our garment manufacturing business accounted for approximately 0.6% of our total garment manufacturing business revenue for the nine months ended December 31, 2020, compared with approximately 1.5% of total garment manufacturing business revenue for the nine months ended December 31, 2019.

For our logistics services business, we outsource some of the business to our contractors. The Company relied on a few subcontractors, in which the subcontracting fees to our largest contractor represented were approximately 43.0% and 57.0% of total cost of revenues for our service segment for the nine months ended December 31, 2020 and 2019, respectively. The percentages decreased as we used less subcontractors during the COVID-19 epidemic circumstance. We have not experienced any disputes with our subcontractor and we believe we maintain good relationships with our contract logistics services provider.

Fuel, toll and other costs for our service business for the nine months ended December 31, 2020 was $1,367,753 as compared with $1,385,870 for the nine months ended December 31, 2019. Fuel, toll and other costs for our service business accounted for approximately 37.3% of our total service revenue for the nine months ended December 31, 2020, compared with approximately 29.7% for the nine months ended December 31, 2019. The increase in percentages was primarily attributed to the decrease usage of subcontractors under the epidemic circumstance.

Subcontracting fees for our service business for the nine months ended December 31, 2020 decreased by approximately 40.7% to $1,576,228 from $2,660,132 for the nine months ended December 31, 2019. Subcontracting fees accounted for approximately 43.0% and 57.0% of our total service business revenue in the nine months ended December 31, 2020 and 2019, respectively. This decrease in percentages was primarily because the Company used less subcontractors under the epidemic circumstance.

For property management and subleasing business, the cost of revenue was mainly the amortization of operating lease assets for the subleasing business.

For epidemic prevention supplies business, we have trading and own production. The cost of revenue included cost of merchandise and cost of our own products. The cost of merchandise was $14,684,284, represented approximately 99.3% of our total cost of revenue of the epidemic prevention supplies business.

Total cost of revenue for the nine months ended December 31, 2020 was $22,776,087, compared with $7,221,683 for the nine months ended December 31, 2019. Total cost of sales as a percentage of total sales for the nine months ended December 31, 2020 was approximately 108.4%, compared with approximately 88.3% for the nine months ended December 31, 2019. Gross (loss) margin for the nine months ended December 31, 2020 was (8.4)%, compared with 11.7% for the nine months ended December 31, 2019.

Gross profit

Gross profit of garment manufacturing business for the nine months ended December 31, 2020 was $415,499, compared with $341,327 for the nine months ended December 31, 2019. Gross profit accounted for approximately 8.0% of our total garment manufacturing business revenue for the nine months ended December 31, 2020, compared with approximately 9.7% for the nine months ended December 31, 2019. The decrease of gross margin was due to increase of raw materials costs and labor costs.

Gross profit in our logistics services business for the nine months ended December 31, 2020 was $720,428 and gross profit margin was approximately 19.7%. Gross profit in our logistics services business for the nine months ended December 31, 2019 was $619,386 and gross profit margin was approximately 13.3%.

Gross profit in our property management and subleasing business for the nine months ended December 31, 2020 was $22,000, or 7.5% of our total property management and subleasing business revenue. This is a new business developed in current period.

Gross loss in our epidemic prevention supplies business for the nine months ended December 31, 2020 was $2,919,950 and gross margin was approximately (24.6)%. The significant loss was mainly because the cost of materials increased significantly and rapidly while the selling price was fixed in the sales agreement with the customers.

Selling, General and administrative expenses

Our selling expenses in our garment manufacturing business segment for the nine months ended December 31, 2020 and 2019 was $2,606 and $11,826, respectively. Our selling expenses in our logistics services business segment was nil and nil for the nine months ended December 31, 2020 and 2019, respectively. Selling expenses in our property management and subleasing business was $15,490 and nil for the nine months ended December 31, 2020 and 2019, respectively. Selling expenses in our epidemic prevention supplies business segment was $358,879 for the nine months ended December 31, 2020. Selling expenses primarily consist of local transportation charges, unloading charges and product inspection charges. Total selling expenses for the nine months ended December 31, 2020 increased significantly 30.9 times to $376,975 from $11,825 for the nine months ended December 31, 2019, mainly due to the selling and marketing expenses in the newly developed epidemic prevention supplies segment and property management and subleasing segment.

Our general and administrative expenses in our garment manufacturing business segment for the nine months ended December 31, 2020 and 2019 was $172,138 and $141,698, respectively. Our general and administrative expenses in our logistics services business segment, for the nine months ended December 31, 2020 and 2019 was $627,922 and $788,021, respectively. The general and administrative expenses in our property management and subleasing business was $544 for the nine months ended December 31, 2020. Our general and administrative expenses in our epidemic prevention supplies business segment was $18,767 for the nine months ended December 31, 2020. Our general and administrative expenses in our corporate office for the nine months ended December 31, 2020 and 2019 was $634,645 and $927,569, respectively. General and administrative expenses primarily consist of administrative salaries, office expense, certain depreciation and amortization charges, repairs and maintenance, legal and professional fees, warehousing costs and other expenses that are not directly attributable to our revenues.

Total general and administrative expenses for the nine months ended December 31, 2020 decreased by approximately 21.7% to $1,454,017 from $1,857,288 for the nine months ended December 31, 2019. The amount was $403,271 lower than in the nine months ended December 31, 2019. It was mainly due to the professional fees for the uplisting Form S-1 filing in nine months ended December 31, 2019 and lower administrative expenses in XKJ resulting from shifting more business to outside subcontractors in the nine months ended December 31, 2020.

Income (loss) from operations

Loss from operations for the nine months ended December 31, 2020 and 2019 was $3,593,015 and $908,400, respectively. Income from operations of $240,423 and $187,803 was attributed from our garment manufacturing business segment for the nine months ended December 31, 2020 and 2019, respectively. Income (loss) from operations of $92,506 and $(168,634) was attributed from our logistics services business segment for the nine months ended December 31, 2020 and 2019, respectively. Income from operations of $5,966 was attributed from our newly developed property management and subleasing business for the nine months ended December 31, 2020. Loss from operations of $3,297,265 was attributed from our epidemic prevention supplies business segment for the nine months ended December 31, 2020. We incurred general and administrative expenses in corporate office of $634,645 and $927,569 for the nine months ended December 31, 2020 and 2019, respectively. The decrease was mainly due to the higher in legal and professional fees to comply with the SEC accounting, disclosure and reporting requirements for the uplisting Form S-1 filling in the nine months ended December 31, 2020 .

Income Tax Expenses

Income tax expense for the nine months ended December 31, 2020 and 2019 was $23,196 and $12,086, respectively, approximately a 91.9% increase compared to 2019. The Company operates in the PRC and files tax returns in the PRC jurisdictions.

The tax jurisdiction and income tax rate of each entity was described in the above section of analysis of three months’ results. Addentax, Yingxi, Yingxi HK, QYTG, YX, HSW, HPF and YS had no taxable income for the nine months ended December 31, 2020 and 2019.

Net Income (Loss)

We incurred a net loss of $3,560,206 and $947,485 for the nine months ended December 31, 2020 and 2019, respectively. Our basic and diluted loss per share were $0.14 and $0.04 for the nine months ended December 31, 2020 and 2019, respectively.

Summary of cash flows

Summary cash flows information for the nine months ended December 31, 2020 and 2019 is as follow:

Net cash used in operating activities consist of net loss of $3,560,206, increased by depreciation and amortization of $83,210, loss on disposal of property and equipment of $1,472, and decrease in change of operating assets and liabilities of $306,592. We will continue to improve our operating cash flow by closely monitoring the timely collection of accounts and other receivables. We generally do not hold any significant inventory for more than ninety days, as we typically manufacture upon customers’ order.

Net cash used in investing activities consist of purchase of plant and equipment of $392,108 and proceeds from disposal of plant and equipment of $2,243, and cash decreased of $704,479 in disposal of two subsidiaries.

Net cash provided by financing activities consist of repayment of related party borrowings of $6,605,044 and we received related party proceeds of $7,697,827; Repayment of bank loan of $196,456 and draw down of new bank loan of $86,886; and Proceeds of $3,735,000 from subscription of ordinary shares offered to a shareholder.

Financial Condition, Liquidity and Capital Resources

As of December 31, 2020, we had cash on hand of $356,728, total current assets of $4, 779,450  and current liabilities of $12,661,861. We presently finance our operations primarily from cash flows from borrowings from related parties and third parties. We also raised equity fund of $3,735,000 from the issuance of common stocks in August 2020. We aim to improve our operating cash flows and anticipate that cash flows from our operations and borrowings from related parties and third parties will continue to be our primary source of funds to finance our short-term cash needs. The Company’s financial conditions raise substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company’s profit generating operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due. The Company expects to finance operations primarily through cash flow from revenue and capital contributions from the CEO. During the year, the CEO has provided financial support for the operations of the Company. In the event that the Company requires additional funding to finance the growth of the Company’s current and expected future operations as well as to achieve our strategic objectives, the CEO has indicated the intent and ability to provide additional equity financing.

The growth and development of our business will require a significant amount of additional working capital. We currently have limited financial resources and based on our current operating plan, we will need to raise additional capital in order to continue as a going concern. We currently do not have adequate cash to meet our short or long-term objectives. In the event additional capital is raised, it may have a dilutive effect on our existing stockholders.

We are subject to all the substantial risks inherent in the development of a new business enterprise within an extremely competitive industry. Due to the absence of a long standing operating history and the emerging nature of the markets in which we compete, we anticipate operating losses until we can successfully implement our business strategy, which includes all associated revenue streams. Our revenue model is new and evolving, and we cannot be certain that it will be successful. The potential profitability of this business model is unproven. We may never ever achieve profitable operations. Our future operating results depend on many factors, including demand for our services, the level of competition, and the ability of our officers to manage our business and growth. As a result of the emerging nature of the market in which we compete, we may incur operating losses until such time as we can develop a substantial and stable revenue base. Additional development expenses may delay or negatively impact the ability of the Company to generate profits. Accordingly, we cannot assure you that our business model will be successful or that we can sustain revenue growth, achieve or sustain profitability, or continue as a going concern.

Foreign Currency Translation Risk

Our operations are located in China, which may give rise to significant foreign currency risks from fluctuations and the degree of volatility in foreign exchange rates between the U.S. dollar and the Chinese Renminbi (“RMB”). All of our sales are in RMB. In the past years, RMB continued to appreciate against the U.S. dollar. As of December 31, 2020, the market foreign exchange rate had decreased to RMB 6.53 to one U.S. dollar. Our financial statements are translated into U.S. dollars using the closing rate method. The balance sheet items are translated into U.S. dollars using the exchange rates at the respective balance sheet dates. The capital and various reserves are translated at historical exchange rates prevailing at the time of the transactions while income and expenses items are translated at the average exchange rate for the period. All translation adjustments are included in accumulated other comprehensive income in the statement of equity. The foreign currency translation (loss) gain for the three and nine months ended December 31, 2020 and 2019 was $(85,728) and $(50,440), (173,879) and $58,715, respectively.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements (as that term is defined in Item 303(a)(4)(ii) of Regulation S-K) as of December 31, 2020 that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. 

Results of Operations for the years ended March 31, 2020 and 2019

The following tables summarize our results of operations for the years ended March 31, 2020 and 2019. The table and the discussion below should be read in conjunction with our consolidated financial statements and the notes thereto appearing elsewhere in this report.

Revenue

Revenue generated from our garment manufacturing business segment contributed $4,298,518, or approximately 42.3%, of our total revenue for the year ended March 31, 2020. Revenue generated from our garment manufacturing business contributed $3,359,638 or approximately 33.5% of our total revenue for the year ended March 31, 2019. The increase of $938,880, or approximately 27.9%, was mainly attribute to the decrease of revenue in HSW by $2,103,618 while revenue in DT increased by $2,811,698.

Revenue generated from our logistics services business segment contributed $5,873,861, or approximately 57.7%, of our total revenue for the year ended March 31, 2020. Revenue generated from our logistics services business contributed $6,667,283, or approximately 66.5%, of our total revenue for the year ended March 31, 2019. The decrease of $793,422, or approximately 11.9%, mainly attribute to COVID-19, as we cannot smoothly go through with logistics services deliveries.

Total revenue for the year ended March 31, 2020 and 2019 were $10,172,379 and $10,026,920, respectively, representing approximately a 1.5% increase compared with the year ended March 31, 2019. The increase was mainly attribute to the increase of orders due to the increase in garment manufacturing business as our garment manufacturing business developed a new client but was offset by (i) our holding companies, YX and QYTG, as they did not have consulting service income in the year ended March 31, 2020; and (ii) one of our subsidiaries, HSW, was losing orders as some of its clients had market performance issue due to COVID-19 and they withdrew the orders placed with us, which resulted in the decrease of our revenue.

Cost of revenue

Cost of revenue for our garment manufacturing business segment for the years ended March 31, 2020 and 2019 was $3,902,444 and $3,055,235, respectively, which included direct raw material costs, direct labor costs, manufacturing overheads including depreciation of production equipment and rent. Cost of revenue for our logistics services business segment for the years ended March 31, 2020 and 2019 was $4,884,574 and $5,688,991, respectively, which includes gasoline and diesel fuel, toll charges, other cost of logistics services and subcontracting fees.

For our garment manufacturing business segment, we purchased the majority of our raw materials directly from numerous local fabric and accessories suppliers. Aggregate purchases from our five largest raw material suppliers represented approximately 92.7% and 39.2% of raw materials purchases for the years ended March 31, 2020 and 2019, respectively. One supplier and two suppliers provided more than 10% of our raw materials purchases for the years ended March 31, 2020 and 2019, respectively. We have not experienced difficulty in obtaining raw materials essentials to our business as we believe we maintain good relationships with our suppliers.

For our logistics services business segment, we outsource some of the business to our subcontractors. The Company relied on a few subcontractors, in which the subcontracting fees to our largest subcontractor represented approximately 25.6% and 13.3% of total cost of revenues for our logistics services segment for the years ended March 31, 2020 and 2019, respectively. The increase in percentages was attributed to the increase usage of subcontracting services as compared to last year. We have not experienced any disputes with our subcontractor and we believe we maintain good relationships with our contract logistics services provider.

Raw material costs for our garment manufacturing business was approximately 72.8 % of our total garment manufacturing business revenue in the year ended March 31, 2020, compared with approximately 75.1% in the year ended March 31, 2019. The decrease in percentages was mainly due to the purchase cost of the raw materials remained consistent, while the labor costs continued to rise.

Labor costs for our garment manufacturing business was approximately 16.4% of our total garment manufacturing business revenue in the year ended March 31, 2020, compared with approximately 10.8% in the year ended March 31, 2019. The increase in percentages was mainly due to the rising wages in the PRC.

Overhead and other expenses for our manufacturing business accounted for approximately 1.6% of our total garment manufacturing business revenue for the year ended March 31, 2020, compared with approximately 5.1% of total garment manufacturing business revenue for the year ended March 31, 2019. The decrease in percentages was mainly attributed to the increased usage of sub-contractors in the manufacturing of garment products.

Fuel, toll and other costs for our service business for the year ended March 31, 2020 was $1,932,149 compared with $2,445,439 for the year ended March 31, 2019. Fuel, toll and other costs for our service business accounted for approximately 32.9% of our total service revenue for the year ended March 31, 2020, compared with approximately 36.7% for the year ended March 31, 2019. The decrease in percentages was primarily attributable to the increase usage of subcontractors.

Subcontracting fees for our service business for the year ended March 31, 2020 decreased by approximately 9.0% to $2,952,425 from $3,243,552 for the year ended March 31, 2019. Subcontracting fees accounted for approximately 50.3% and 48.6% of our total service business revenue in the years ended March 31, 2020 and 2019, respectively. This increase in percentages was primarily attributed to the Company subcontracted more shipping orders to subcontractors in 2019 due to the increase in shipping orders to various destinations that were not covered by the Company’s own delivery and transportation networks. Moreover, the delivery cost of third-parties increased due to the market condition.

Total cost of revenue for the year ended March 31, 2020 was $8,787,018, which remained consistent with the year ended March 31, 2019. Total cost of sales as a percentage of total sales for the year ended March 31, 2020 was approximately 86.4%, compared with approximately 87.2% for the year ended March 31, 2019. Gross margin for the year ended March 31, 2020 was approximately 13.6% compared with approximately 12.8% for the year ended March 31, 2019.

Gross profit

Garment manufacturing business gross profit for the year ended March 31, 2020 was $396,074 compared with $304,403 for the year ended March 31, 2019. Gross profit accounted for approximately 9.2% of our total garment manufacturing business revenue for the year ended March 31, 2020, compared with approximately 9.1% for the year ended March 31, 2019.

Gross profit in our logistics services business segment for the year ended March 31, 2020 was $989,287 and gross margin was 16.8%. Gross profit in our logistics services business segment for the year ended March 31, 2019 was $978,291 and gross margin was approximately 14.7%.

The increase in gross margin was due to our focus on high margin customers, implementation of cost cutting measures and the effective controls on our costs during the fiscal year.

Selling, General and administrative expenses

Our selling expenses in our garment manufacturing business segment for the years ended March 31, 2020 and 2019 was $13,406 and $17,905, respectively. Our selling expenses in our logistics services business segment for the year ended March 31, 2020 and 2019 was nil and nil, respectively. Selling expenses consist primarily of local transportation charges, unloading charges and product inspection charges. Total selling expenses for the year ended March 31, 2020 decreased by approximately 25.1% to $13,406 from $17,905 for the year ended March 31, 2019.