• Logistics Services: Provides integrated logistics solutions, including transportation, warehousing, and supply chain management.
• Garment Manufacturing: Manufactures and sells a range of apparel products.

Addentax Group Corp (ATXG) primarily operates on a Business-to-Business (B2B) model through its subsidiaries, focusing on three main segments: garment manufacturing, logistics services, and property management.

While the company serves a range of other companies, its latest Annual Report (10-K) for the fiscal year ended March 31, 2023, states that no single customer accounted for 10% or more of its total revenues. As such, Addentax does not publicly disclose the specific names of its major customers.

However, based on its business operations, Addentax's customers generally fall into the following categories of companies:

• Apparel Brands and Fashion Retailers: For its garment manufacturing segment, Addentax produces various apparel products for brands and retailers, primarily located in China and internationally.
• E-commerce Companies, Manufacturers, and General Retailers: Through its logistics services segment, Addentax provides storage, delivery, and distribution services predominantly to these types of businesses in China.
• Tenants/Users of Industrial Properties: In its property management segment, Addentax manages industrial properties, serving businesses that lease or utilize these facilities.

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Hui Li, Chief Executive Officer

Hui Li has served as Addentax's Chief Executive Officer and Chairman of the Board since the company's inception in December 2016. He possesses over 17 years of experience in the garment manufacturing industry. From September 2003 to May 2011, Mr. Li was the General Manager of Zhongshan Yeli Garment Co., Ltd. Subsequently, he served as the General Manager of Shishi Jiayuan Garment Co., Ltd. from October 2011 to July 2016. Since July 2016, he has also held the positions of Chairman and General Manager of Addentax Group (Hong Kong) Limited.

Junyu Li, Chief Financial Officer

Junyu Li has served as the Chief Financial Officer of Addentax since September 2021. Prior to this role, he worked as a financial reporting manager at Sunshine 100 China Holdings Ltd. from October 2017 to August 2021. Before that, Mr. Li gained experience as an auditor at PricewaterhouseCoopers Zhong Tian LLP from July 2014 to September 2017.

1. Nasdaq Delisting Risk: Addentax has repeatedly received notifications from Nasdaq regarding its non-compliance with the minimum bid price requirement, which mandates a stock price of at least $1.00 per share. The company has been granted periods to regain compliance, but this remains a recurring threat to its listing status. A delisting would severely impact the company's ability to raise capital and its overall investor confidence.
2. Poor Financial Performance and Viability Concerns: The company has demonstrated a pattern of declining revenue and increased losses across its segments, particularly in logistics services. Earnings have decreased by an average of 15.8% annually over the past five years. Addentax also operates with a very small market capitalization, currently around $6 million, which can lead to liquidity issues and heightened stock price volatility. Furthermore, accumulated deficits have risen to $11.60 million, and total liabilities stand at approximately $25.75 million, raising concerns about its financial stability. An Altman Z-Score of 1.95 indicates an increased risk of bankruptcy.
3. High-Risk Bitcoin Acquisition Strategy: Addentax has entered into a non-binding term sheet to potentially acquire up to $1.3 billion in Bitcoin, a move that would be financed through the issuance of new shares of its common stock. Given the company's small market capitalization, this strategy carries substantial risks. The issuance of new shares could lead to significant shareholder dilution. Additionally, the cryptocurrency market is known for its extreme volatility, and a drop in Bitcoin's value could result in considerable losses for Addentax. The acquisition itself is subject to negotiation, due diligence, and regulatory approvals, introducing significant execution risks.

• The vertical integration of logistics services by major e-commerce platforms in China, such as Alibaba's Cainiao and JD.com Logistics, directly threatens third-party logistics providers like Addentax by reducing the demand for outsourced freight forwarding, warehousing, and transportation services.
• The increasing robustness of built-in operating system security features (e.g., Microsoft Defender) and the industry-wide shift towards advanced cloud-based Endpoint Detection and Response (EDR) and Extended Detection and Response (XDR) solutions challenge the relevance and market share of traditional antivirus software products offered by Addentax.
• Global supply chain diversification strategies, often referred to as "China plus one," driven by geopolitical tensions, trade tariffs, and the desire for supply chain resilience, are leading many international brands to reduce their reliance on manufacturing in China, thereby threatening Addentax's garment manufacturing business.

Addentax (ATXG) operates in several segments, including garment manufacturing, logistics services, property management and subleasing, and epidemic prevention supplies. Recent company information also indicates a strategic shift towards becoming a Bitcoin treasury company and exploring Web3.0 payment infrastructure.

Garment Manufacturing Business

The addressable market for Addentax's garment manufacturing business is primarily in China. The total apparel market in China was valued at approximately $395.9 billion in 2023. Another estimate indicates that the revenue for the Apparel Manufacturing industry in China is expected to reach $298.3 billion in 2025.

Logistics Services Business

Addentax provides delivery and courier services covering numerous cities and municipalities in China. China's courier service revenues rose to approximately 1.4 trillion yuan (US$191.2 billion) in 2024. More broadly, the China logistics market generated a revenue of USD 359.6 billion in 2024 and is projected to grow to USD 548.5 billion by 2030.

Property Management and Subleasing Business

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Epidemic Prevention Supplies Business

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Share Issuance

• Addentax Group (ATXG) completed its initial public offering (IPO) on August 30, 2022, offering 5,000,000 ordinary shares.
• The shares were priced at $5.00 per ordinary share.

Inbound Investments

• The IPO in August 2022 resulted in gross proceeds of $25,000,000 for the company.