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Transaction Overview

Addentax Group Corp. stated that it has entered an agreement with certain accredited investors for a private issuance of senior secured convertible notes for $15,000,000 on January 4, 2023. The company will issue two senior secured convertible notes with an original principal amount of $8,333,333.33 for total gross proceeds of $16,666,666.66.

The company issued convertible notes at a 10% initial discount. The notes bear a 5% annual interest rate, and the Company will be required to pay instalment amounts or, at its option, redeem such amounts under the Notes each month beginning on the last trading day of the calendar month in which the control account trigger date occurs, and thereafter, on the last trading day of each calendar month until the maturity date of July 4, 2024, at which time all outstanding amounts remaining, if any, will be due and payable in full. Beginning after the original date of issuance, the Convertible Notes are convertible into shares of Common Stock at an initial conversion price of $1.25 per share. The company also granted warrants to purchase up to 16,077,172 shares of common stock at $1.25 per share.

The Notes, Warrants, and shares issuable upon conversion of the Notes and exercise of the Warrants are offered and sold in accordance with exemptions from the Securities Act provided by Section 4(a)(2) and Rule 506 of Regulation D established thereunder.