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

The company issued convertible notes at an original discount of 10%. The notes bears interest rate of 5% per annum, and the Company will be required to pay installment amounts, or at its option redeem such amounts under the Notes each month commencing on the last trading day of the calendar month in which the control account trigger date occurs, and thereafter, 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. he Convertible Notes are convertible into shares of Common Stock, beginning after the original date of issuance at an initial conversion price of $1.25 per share.

The company also issued warrants to purchase up to 16,077,172 shares of common shares at an exercise price of $1.25 per share. The Notes, Warrants, and the shares issuable upon the conversion of the Notes and the exercise of the Warrants are offered and sold pursuant to exemptions from the registration requirements of the Securities Act afforded by Section 4(a)(2) thereof and Rule 506 of Regulation D promulgated thereunder.