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China SXT Pharmaceuticals, Inc.

China SXT Pharmaceuticals, Inc.SXTC決算レポート

Nasdaq · ヘルスケア · 医薬製剤

China SXT Pharmaceuticals, Inc. is a pharmaceutical company focused on the Chinese domestic market. It engages in the research, development, production and distribution of traditional Chinese medicine-based prescription drugs, over-the-counter medications, and nutritional health products, serving both clinical medical institutions and consumer health markets.

What changed in China SXT Pharmaceuticals, Inc.'s 20-F — 2024 vs 2025

Top changes in China SXT Pharmaceuticals, Inc.'s 2025 20-F

241 paragraphs added · 253 removed · 204 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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If the PRC government exerts more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers and we were to be subject to such oversight and control, it may result in a material adverse change to our business operations, significantly limit or completely hinder our ability to offer or continue to offer securities to investors, and cause the ordinary shares to significantly decline in value or become worthless.
If the PRC government exerts more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers and we were to be subject to such oversight and control, it may result in a material adverse change to our business operations, significantly limit or completely hinder our ability to offer or continue to offer securities to investors, and cause the ordinary shares to significantly decline in value or become worthless.
Foreign-invested enterprises with investment as their main business (including foreign-oriented companies, foreign-invested venture capital enterprises and foreign-invested equity investment enterprises) are allowed to, under the premise of authenticity and compliance of their domestic investment projects, carry out based on their actual investment scales direct settlement of foreign exchange capital or transfer the RMB funds in the foreign exchange settlement account for pending payment to the invested enterprises’ accounts. 14 On May 10, 2013, SAFE released Circular 21, which came into effect on May 13, 2013.
Foreign-invested enterprises with investment as their main business (including foreign-oriented companies, foreign-invested venture capital enterprises and foreign-invested equity investment enterprises) are allowed to, under the premise of authenticity and compliance of their domestic investment projects, carry out based on their actual investment scales direct settlement of foreign exchange capital or transfer the RMB funds in the foreign exchange settlement account for pending payment to the invested enterprises’ accounts. 13 On May 10, 2013, SAFE released Circular 21, which came into effect on May 13, 2013.
Zhou, our President, Chief Executive Officer and Chairman of the Board, for the continued growth and operation of our Company, due to his industry experience, as well as his personal and business contacts in the PRC. We may not be able to retain Mr. Zhou for any given period of time. Although we have no reason to believe that Mr.
Zhou, our President, Co-Chief Executive Officer and Chairman of the Board, for the continued growth and operation of our Company, due to his industry experience, as well as his personal and business contacts in the PRC. We may not be able to retain Mr. Zhou for any given period of time. Although we have no reason to believe that Mr.
The PRC government has significant authority to intervene or influence the China operations of an offshore holding company at any time, which could result in a material adverse change to our operations and the value of the ordinary shares. 20 Furthermore, given recent statements by the Chinese government indicating an intent to exert more oversight and control over offerings that are conducted overseas, although we are currently not required to obtain permission from any of the PRC federal or local government and has not received any denial to list on the U.S. exchange, it is uncertain whether or when we might be required to obtain permission from the PRC government to list on U.S. exchanges in the future.
The PRC government has significant authority to intervene or influence the China operations of an offshore holding company at any time, which could result in a material adverse change to our operations and the value of the ordinary shares. 19 Furthermore, given recent statements by the Chinese government indicating an intent to exert more oversight and control over offerings that are conducted overseas, although we are currently not required to obtain permission from any of the PRC federal or local government and has not received any denial to list on the U.S. exchange, it is uncertain whether or when we might be required to obtain permission from the PRC government to list on U.S. exchanges in the future.
For example, if shareholders of a variable interest entity were to refuse to transfer their equity interests in such variable interest entity to us or our designated persons when we exercise the purchase option pursuant to these contractual arrangements, we may have to take a legal action to compel them to fulfill their contractual obligations. 11 If (i) the applicable PRC authorities invalidate these contractual arrangements for violation of PRC laws, rules and regulations, (ii) any variable interest entity or its shareholders terminate the contractual arrangements or (iii) any variable interest entity or its shareholders fail to perform their obligations under these contractual arrangements, our business operations in China would be materially and adversely affected, and the value of your stock would substantially decrease.
For example, if shareholders of a variable interest entity were to refuse to transfer their equity interests in such variable interest entity to us or our designated persons when we exercise the purchase option pursuant to these contractual arrangements, we may have to take a legal action to compel them to fulfill their contractual obligations. 10 If (i) the applicable PRC authorities invalidate these contractual arrangements for violation of PRC laws, rules and regulations, (ii) any variable interest entity or its shareholders terminate the contractual arrangements or (iii) any variable interest entity or its shareholders fail to perform their obligations under these contractual arrangements, our business operations in China would be materially and adversely affected, and the value of your stock would substantially decrease.
If a domestic company fails to complete required filing procedures or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as an order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines. 21 According to the CSRC Notice, the domestic companies that have already been listed overseas before the effective date of the Trial Measures (namely, March 31, 2023) shall be deemed as existing issuers (the “Existing Issuers”).
If a domestic company fails to complete required filing procedures or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as an order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines. 20 According to the CSRC Notice, the domestic companies that have already been listed overseas before the effective date of the Trial Measures (namely, March 31, 2023) shall be deemed as existing issuers (the “Existing Issuers”).
See a more detailed discussion of this risk factor on page 10 of this annual report. 3 Risks Related to Our Corporate Structure We are also subject to risks and uncertainties related to our corporate structure, including, but are not limited to, the following: ● We do not have direct ownership of our operating entities in China and rely on VIE Agreements with the VIE for our business operations, which may not be as effective in providing operational control or enabling us to derive benefits as through ownership of controlling equity interests.
See a more detailed discussion of this risk factor on page 9 of this annual report. 3 Risks Related to Our Corporate Structure We are also subject to risks and uncertainties related to our corporate structure, including, but are not limited to, the following: ● We do not have direct ownership of our operating entities in China and rely on VIE Agreements with the VIE for our business operations, which may not be as effective in providing operational control or enabling us to derive benefits as through ownership of controlling equity interests.
If we fail to successfully promote and maintain our brand, or if we incur substantial expenses in an unsuccessful attempt to promote and maintain our brand, we may fail to attract enough new customers or retain our existing customers to the extent necessary to realize a sufficient return on our brand-building efforts, in which case our business, operating results and financial condition, would be materially adversely affected. 8 Any disruption in the supply chain of raw materials and our products could adversely impact our ability to produce and deliver products.
If we fail to successfully promote and maintain our brand, or if we incur substantial expenses in an unsuccessful attempt to promote and maintain our brand, we may fail to attract enough new customers or retain our existing customers to the extent necessary to realize a sufficient return on our brand-building efforts, in which case our business, operating results and financial condition, would be materially adversely affected. 7 Any disruption in the supply chain of raw materials and our products could adversely impact our ability to produce and deliver products.
In addition, any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management attention. 22 If the PRC government determines that the contractual arrangements constituting part of the VIE structure do not comply with PRC regulations, or if these regulations change or are interpreted differently in the future, we may be unable to assert our contractual rights over the assets of the VIE, and our Ordinary Shares may decline in value or become worthless.
In addition, any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management attention. 21 If the PRC government determines that the contractual arrangements constituting part of the VIE structure do not comply with PRC regulations, or if these regulations change or are interpreted differently in the future, we may be unable to assert our contractual rights over the assets of the VIE, and our Ordinary Shares may decline in value or become worthless.
Our results of operations could be materially and adversely affected if Taizhou Suxuantang’s tax liabilities increase or if they are required to pay late payment fees and other penalties. 12 The approval of the China Securities Regulatory Commission and other compliance procedures may be required in connection with an offering under PRC rules, regulations or policies, and, if required, we cannot predict whether or how soon we will be able to obtain such approval.
Our results of operations could be materially and adversely affected if Taizhou Suxuantang’s tax liabilities increase or if they are required to pay late payment fees and other penalties. 11 The approval of the China Securities Regulatory Commission and other compliance procedures may be required in connection with an offering under PRC rules, regulations or policies, and, if required, we cannot predict whether or how soon we will be able to obtain such approval.
See a more detailed discussion of this risk factor on page 17 of this annual report. ● As a foreign private issuer, we are not subject to certain U.S. securities law disclosure requirements that apply to a domestic U.S. issuer, and are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the NASDAQ Stock Market corporate governance listing standards.
See a more detailed discussion of this risk factor on page 16 of this annual report. ● As a foreign private issuer, we are not subject to certain U.S. securities law disclosure requirements that apply to a domestic U.S. issuer, and are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the NASDAQ Stock Market corporate governance listing standards.
If such allegations are not proven to be groundless, our Company and business operations will be severely hampered and your investment in our stock could be rendered worthless. 27 You may face difficulties in protecting your interests and exercising your rights as a stockholder since we conduct substantially all of our operations in China, and almost all of our officers and directors reside outside the U.S.
If such allegations are not proven to be groundless, our Company and business operations will be severely hampered and your investment in our stock could be rendered worthless. 26 You may face difficulties in protecting your interests and exercising your rights as a stockholder since we conduct substantially all of our operations in China, and almost all of our officers and directors reside outside the U.S.
See a more detailed discussion of this risk factor on page 11 of this annual report. ● Contractual arrangements in relation to our variable interest entity may be subject to scrutiny by the PRC tax authorities and they may determine that we or our PRC variable interest entity owe additional taxes, which could negatively affect our results of operations and the value of your investment.
See a more detailed discussion of this risk factor on page 10 of this annual report. ● Contractual arrangements in relation to our variable interest entity may be subject to scrutiny by the PRC tax authorities and they may determine that we or our PRC variable interest entity owe additional taxes, which could negatively affect our results of operations and the value of your investment.
Such reductions, along with any future price controls or government mandated price reductions may have a material adverse effect on our financial condition and results of operations, including significantly reducing our revenue and profitability. 10 If the TCMP products we produce are replaced by other medicines or are removed from the PRC’s insurance catalogue in the future, our revenue may suffer.
Such reductions, along with any future price controls or government mandated price reductions may have a material adverse effect on our financial condition and results of operations, including significantly reducing our revenue and profitability. 9 If the TCMP products we produce are replaced by other medicines or are removed from the PRC’s insurance catalogue in the future, our revenue may suffer.
Therefore, our shareholders may not know on a timely basis when our officers, directors and principal shareholders purchase or sell our Ordinary Shares. 17 As a foreign private issuer, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the NASDAQ Stock Market corporate governance listing standards.
Therefore, our shareholders may not know on a timely basis when our officers, directors and principal shareholders purchase or sell our Ordinary Shares. 16 As a foreign private issuer, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the NASDAQ Stock Market corporate governance listing standards.
We face uncertainty about future actions by the PRC government that could significantly affect the operating company’s financial performance and the enforceability of the VIE Agreements. 13 Furthermore, on February 17, 2023, the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures”), which took effect on March 31, 2023.
We face uncertainty about future actions by the PRC government that could significantly affect the operating company’s financial performance and the enforceability of the VIE Agreements. 12 Furthermore, on February 17, 2023, the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures”), which took effect on March 31, 2023.
If the foreign exchange control system prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to our security-holders. 26 Our business may be materially and adversely affected if any of our PRC subsidiaries declare bankruptcy or become subject to a dissolution or liquidation proceeding.
If the foreign exchange control system prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to our security-holders. 25 Our business may be materially and adversely affected if any of our PRC subsidiaries declare bankruptcy or become subject to a dissolution or liquidation proceeding.
See a more detailed discussion of this risk factor on page 20 of this annual report. ● The uncertainties with respect to the Chinese legal system, including uncertainties regarding the enforcement of laws, and sudden or unexpected changes in laws and regulations in China with little advance notice could adversely affect us and limit the legal protections available to you and us.
See a more detailed discussion of this risk factor on page 22 of this annual report. ● The uncertainties with respect to the Chinese legal system, including uncertainties regarding the enforcement of laws, and sudden or unexpected changes in laws and regulations in China with little advance notice could adversely affect us and limit the legal protections available to you and us.
In addition, we do not have any business interruption insurance due to the limited coverage of any available business interruption insurance in China, and as a result, any business disruption or natural disaster could severely disrupt our business and operations and significantly decrease our revenue and profitability. 9 We face risks related to research and the ability to develop new TCMP products.
In addition, we do not have any business interruption insurance due to the limited coverage of any available business interruption insurance in China, and as a result, any business disruption or natural disaster could severely disrupt our business and operations and significantly decrease our revenue and profitability. 8 We face risks related to research and the ability to develop new TCMP products.
The U.S. regulators may consider cross-border cooperation with securities regulatory authority of the PRC by way of judicial assistance, diplomatic channels or regulatory cooperation mechanism established with the securities regulatory authority of the PRC. 23 We face exposure to foreign currency exchange rate fluctuations, and such fluctuations could adversely affect our business, results of operations and financial condition.
The U.S. regulators may consider cross-border cooperation with securities regulatory authority of the PRC by way of judicial assistance, diplomatic channels or regulatory cooperation mechanism established with the securities regulatory authority of the PRC. 22 We face exposure to foreign currency exchange rate fluctuations, and such fluctuations could adversely affect our business, results of operations and financial condition.
See a more detailed discussion of this risk factor on page 24 of this annual report. 4 Risks Related to Our Ordinary Shares In addition to the risks described above, we are subject to general risks and uncertainties relating to our ordinary shares, including, but not limited to, the following: ● The market price for our ordinary shares may be volatile.
See a more detailed discussion of this risk factor on page 23 of this annual report. 4 Risks Related to Our Ordinary Shares In addition to the risks described above, we are subject to general risks and uncertainties relating to our ordinary shares, including, but not limited to, the following: ● The market price for our ordinary shares may be volatile.
These developments could add uncertainties to our offerings. See a more detailed discussion of this risk factor on page 19 of this annual report. ● The PRC government has significant authority to intervene or influence the China operations of an offshore holding company, such as ours, at any time.
These developments could add uncertainties to our offerings. See a more detailed discussion of this risk factor on page 18 of this annual report. ● The PRC government has significant authority to intervene or influence the China operations of an offshore holding company, such as ours, at any time.
See a more detailed discussion of this risk factor on page 12 of this annual report. ● The approval of the China Securities Regulatory Commission and other compliance procedures may be required in connection with this offering, and, if required, we cannot predict whether we will be able to obtain such approval.
See a more detailed discussion of this risk factor on page 11 of this annual report. ● The approval of the China Securities Regulatory Commission and other compliance procedures may be required in connection with this offering, and, if required, we cannot predict whether we will be able to obtain such approval.
If we lose our foreign private issuer status on this date, we will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms beginning on January 1, 2024, which are more detailed and extensive than the forms available to a foreign private issuer.
If we lose our foreign private issuer status on this date, we will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms beginning on January 1, 2026, which are more detailed and extensive than the forms available to a foreign private issuer.
See a more detailed discussion of this risk factor on page 23 of this annual report. ● It may be difficult for overseas shareholders and/or regulators to conduct investigation or collect evidence within China. See a more detailed discussion of this risk factor on page 23 of this annual report. ● We face exposure to foreign currency exchange rate fluctuations.
See a more detailed discussion of this risk factor on page 22 of this annual report. ● It may be difficult for overseas shareholders and/or regulators to conduct investigation or collect evidence within China. See a more detailed discussion of this risk factor on page 22 of this annual report. ● We face exposure to foreign currency exchange rate fluctuations.
See a more detailed discussion of this risk factor on page 17 of this annual report. ● If we fail to establish and maintain proper internal financial reporting controls, our ability to produce accurate financial statements or comply with applicable regulations could be impaired.
See a more detailed discussion of this risk factor on page 15 of this annual report. ● If we fail to establish and maintain proper internal financial reporting controls, our ability to produce accurate financial statements or comply with applicable regulations could be impaired.
See a more detailed discussion of this risk factor on page 14 of this annual report. ● Uncertainties exist with respect to the interpretation and implementation of the PRC Foreign Investment Law and how it may impact the viability of our current corporate structure and business operations.
See a more detailed discussion of this risk factor on page 13 of this annual report. ● Uncertainties exist with respect to the interpretation and implementation of the PRC Foreign Investment Law and how it may impact the viability of our current corporate structure and business operations.
See a more detailed discussion of this risk factor on page 13 of this annual report. ● Uncertainties exist with respect to the interpretation and implementation of the Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations.
See a more detailed discussion of this risk factor on page 12 of this annual report. ● Uncertainties exist with respect to the interpretation and implementation of the Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations.
These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers. 18 We do not intend to pay dividends for the foreseeable future.
These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers. 17 We do not intend to pay dividends for the foreseeable future.
We cannot assure you that we will be able to compete effectively with current or future competitors or that the competitive pressures we face will not harm our business. 7 Our dependence on a small number of customers could adversely affect our business or results of operations.
We cannot assure you that we will be able to compete effectively with current or future competitors or that the competitive pressures we face will not harm our business. 6 Our dependence on a small number of customers could adversely affect our business or results of operations.
These restrictions on the availability of our funding may impact our ability to pay dividends to our shareholders and to service our indebtedness. 15 If we exercise the option to acquire equity ownership of Taizhou Suxuantang, the ownership transfer may subject us to certain limitation and substantial costs.
These restrictions on the availability of our funding may impact our ability to pay dividends to our shareholders and to service our indebtedness. 14 If we exercise the option to acquire equity ownership of Taizhou Suxuantang, the ownership transfer may subject us to certain limitation and substantial costs.
Therefore, it is unclear how tax authorities will determine tax residency based on the facts of each case. 25 If the PRC tax authorities determine that we are a “resident enterprise” for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow.
Therefore, it is unclear how tax authorities will determine tax residency based on the facts of each case. 24 If the PRC tax authorities determine that we are a “resident enterprise” for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow.
The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter, and, accordingly, the next determination will be made with respect to us on September 30, 2023.
The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter, and, accordingly, the next determination will be made with respect to us on September 30, 2025.
See a more detailed discussion of this risk factor on page 15 of this annual report. ● We have not received or been denied any permission from the PRC authorities to list on U.S. stock exchanges.
See a more detailed discussion of this risk factor on page 14 of this annual report. ● We have not received or been denied any permission from the PRC authorities to list on U.S. stock exchanges.
See a more detailed discussion of this risk factor on page 17 of this annual report. ● We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.
See a more detailed discussion of this risk factor on page 16 of this annual report. ● We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.
See a more detailed discussion of this risk factor on page 10 of this annual report. ● Any disruption in the supply chain of raw materials and our products could adversely impact our ability to produce and deliver products.
See a more detailed discussion of this risk factor on page 9 of this annual report. ● Any disruption in the supply chain of raw materials and our products could adversely impact our ability to produce and deliver products.
As a result, our liquidity and our ability to fund and expand our business may be negatively affected. 24 Labor disputes could significantly affect our operations. Labor disputes with our employees or labor disputes regarding social welfare could significantly disrupt operations or expansion plans.
As a result, our liquidity and our ability to fund and expand our business may be negatively affected. 23 Labor disputes could significantly affect our operations. Labor disputes with our employees or labor disputes regarding social welfare could significantly disrupt operations or expansion plans.
See a more detailed discussion of this risk factor on page 13 of this annual report. ● PRC laws and regulations governing our current business operations are sometimes vague and uncertain.
See a more detailed discussion of this risk factor on page 12 of this annual report. ● PRC laws and regulations governing our current business operations are sometimes vague and uncertain.
See a more detailed discussion of this risk factor on page 22 of this annual report. ● We may have difficulty in enforcing any rights we may have under the VIE Agreements in PRC.
See a more detailed discussion of this risk factor on page 21 of this annual report. ● We may have difficulty in enforcing any rights we may have under the VIE Agreements in PRC.
See a more detailed discussion of this risk factor on page 7 of this annual report. ● Our dependence on a small number of customers could adversely affect our business or results of operations.
See a more detailed discussion of this risk factor on page 6 of this annual report. ● Our dependence on a small number of customers could adversely affect our business or results of operations.
See a more detailed discussion of this risk factor on page 8 of this annual report. ● Our business requires a number of permits and licenses in order to carry on their business.
See a more detailed discussion of this risk factor on page 7 of this annual report. ● Our business requires a number of permits and licenses in order to carry on their business.
See a more detailed discussion of this risk factor on page 18 of this annual report. ● We do not intend to pay dividends for the foreseeable future. See a more detailed discussion of this risk factor on page 19 of this annual report.
See a more detailed discussion of this risk factor on page 17 of this annual report. ● We do not intend to pay dividends for the foreseeable future. See a more detailed discussion of this risk factor on page 18 of this annual report.
See a more detailed discussion of this risk factor on page 9 of this annual report. ● Price control regulations in the PRC may decrease our profitability.
See a more detailed discussion of this risk factor on page 8 of this annual report. ● Price control regulations in the PRC may decrease our profitability.
We derive a substantial portion of our revenue from a relatively small number of customers. Suxuantang had two significant customers which accounted for 45.65% and 16.92% of our total revenue during the year ended March 31, 2024, respectively.
We derive a substantial portion of our revenue from a relatively small number of customers. Suxuantang had one significant customer which accounted for 68.72% of our total revenue during the year ended March 31, 2025. Suxuantang had two significant customers which accounted for 45.65% and 16.92% of our total revenue during the year ended March 31, 2024, respectively.
See a more detailed discussion of this risk factor on page 15 of this annual report.
See a more detailed discussion of this risk factor on page 14 of this annual report.
On December 15, 2022, the PCAOB determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. 19 Our auditor, ZH CPA, LLC, is headquartered in Denver, Colorado, not mainland China or Hong Kong and was not identified in this report as a firm subject to the PCAOB’s determination.
On December 15, 2022, the PCAOB determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. 18 Our auditor, Enrome LLP, is headquartered in Singapore, not mainland China or Hong Kong and was not identified in this report as a firm subject to the PCAOB’s determination.
If we do not have sufficient working capital and are unable to generate sufficient revenues or raise additional funds, we may delay the completion of or significantly reduce the scope of our current business plan; delay some of our development and clinical or marketing efforts; postpone the hiring of new personnel; or, under certain dire financial circumstances, substantially curtail or cease our operations.
If we do not have sufficient working capital and are unable to generate sufficient revenues or raise additional funds, we may delay the completion of or significantly reduce the scope of our current business plan; delay some of our development and clinical or marketing efforts; postpone the hiring of new personnel; or, under certain dire financial circumstances, substantially curtail or cease our operations. 5 To date, we have relied almost exclusively on organically generated revenues and financing transactions to fund our operations.
We are also vulnerable to natural disasters and other calamities. We cannot assure you that we are adequately protected from the effects of fire, floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins, war, riots, terrorist attacks, or similar events.
We cannot assure you that we are adequately protected from the effects of fire, floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins, war, riots, terrorist attacks, or similar events.
To date, we have relied almost exclusively on organically generated revenues and financing transactions to fund our operations. Our inability to obtain sufficient additional financing would have a material adverse effect on our ability to implement our business plan and, as a result, could require us to significantly curtail or potentially cease our operations.
Our inability to obtain sufficient additional financing would have a material adverse effect on our ability to implement our business plan and, as a result, could require us to significantly curtail or potentially cease our operations.
While our auditor is based in the U.S. and is registered with the PCAOB and has been inspected by the PCAOB on a regular basis, in the event it is later determined that the PCAOB is unable to inspect or investigate completely our auditor because of a position taken by an authority in a foreign jurisdiction, then such lack of inspection could cause trading in the our securities to be prohibited under the HFCA Act, and ultimately result in a determination by a securities exchange to delist our securities.
In the event it is later determined that the PCAOB is unable to inspect or investigate completely the Company’s auditor because of a position taken by an authority in a foreign jurisdiction, then such lack of inspection could cause trading in the Company’s securities to be prohibited under the HFCAA ultimately result in a determination by a securities exchange to delist the Company’s securities.
An aggregate of 3,476,091 Ordinary Shares are outstanding as of the date of August 7, 2024. If our existing shareholders sell, or indicate an intent to sell, substantial amounts of our Ordinary Shares in the public market, the market price of our Ordinary Shares could fall.
An aggregate of 116,027,758 Ordinary Shares are outstanding as of the date of July 23, 2025. If our existing shareholders sell, or indicate an intent to sell, substantial amounts of our Ordinary Shares in the public market, the market price of our Ordinary Shares could fall.
We might not identify one or more material weaknesses in our internal controls in connection with evaluating our compliance with Section 404 of the Sarbanes-Oxley Act. In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal controls over financial reporting, we will need to expend significant resources and provide significant management oversight.
In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal controls over financial reporting, we will need to expend significant resources and provide significant management oversight to Section 404 compliance on an ongoing basis.
Thus, you should consider our future prospects in light of the risks and uncertainties experienced by early stage companies in evolving markets rather than typical companies of our age.
As a result, our past operating results are not an accurate indication of the lines of business we are principally engaged in currently. Thus, you should consider our future prospects in light of the risks and uncertainties experienced by early stage companies in evolving markets rather than typical companies of our age.
If we do not obtain adequate capital on a timely basis and on satisfactory terms, our revenues and operations and the value of our Ordinary Shares and Ordinary Share equivalents would be materially negatively impacted and we may cease our operations. 6 Although our operation began 19 years ago, our significant business lines have a limited operating history, which makes it difficult to evaluate our future prospects and results of operations.
If we do not obtain adequate capital on a timely basis and on satisfactory terms, our revenues and operations and the value of our Ordinary Shares and Ordinary Share equivalents would be materially negatively impacted and we may cease our operations.
Therefore, our auditor was not subject to the determinations announced by the PCAOB on December 16, 2021, and it is currently subject to the PCAOB inspections.
Therefore, our auditor was not subject to the determinations announced by the PCAOB on December 16, 2021, and it is currently subject to the PCAOB inspections. Under the PCAOB’s rules, a reassessment of a determination under the HFCA Act may result in the PCAOB reaffirming, modifying or vacating the determination.
As of March 31, 2024, we had cash and cash equivalents and restricted cash of $12,077,187, total current assets of $14,233,359 and total current liabilities of $8,901,944. As of March 31, 2023, we had cash and cash equivalents and restricted cash of $17,368,478, total current assets of $19,521,247 and total current liabilities of $14,496,938.
As of March 31, 2025, we had cash and cash equivalents and restricted cash of $18,129,432, total current assets of $21,296,491 and total current liabilities of $13,279,833. As of March 31, 2024, we had cash and cash equivalents and restricted cash of $12,077,187, total current assets of $14,233,359 and total current liabilities of $8,901,944.
If we fail to establish and maintain proper internal financial reporting controls, our ability to produce accurate financial statements or comply with applicable regulations could be impaired.
Such litigation, if instituted against us, could result in very substantial costs, divert our management’s attention and resources and harm our business, operating results and financial condition. 15 If we fail to establish and maintain proper internal financial reporting controls, our ability to produce accurate financial statements or comply with applicable regulations could be impaired.
We only started to produce Directly-Oral traditional Chinese medicine pieces products (the “Directly-Oral-TCMP”) and After-soaking-oral TCMP products (the “After-Soaking-Oral-TCMP”) as our principal products six years ago. As a result, our past operating results are not an accurate indication of the lines of business we are principally engaged in currently.
Although our operation began 20 years ago, our significant business lines have a limited operating history, which makes it difficult to evaluate our future prospects and results of operations. We only started to produce Directly-Oral traditional Chinese medicine pieces products (the “Directly-Oral-TCMP”) and After-soaking-oral TCMP products (the “After-Soaking-Oral-TCMP”) as our principal products six years ago.
Any one or more of these events may impede our production and delivery efforts and adversely affect our sales results, whether short-term or for a prolonged period of time, which could materially and adversely affect our business, financial condition, and results of operations. 5 COVID-19 has spread to many countries and was declared a pandemic by the WHO, resulting in actions from national and local governments that have significantly affected virtually all facets of the PRC and global economies.
Any one or more of these events may impede our production and delivery efforts and adversely affect our sales results, whether short-term or for a prolonged period of time, which could materially and adversely affect our business, financial condition, and results of operations. We are also vulnerable to natural disasters and other calamities.
Despite recent reforms made possible by the JOBS Act, compliance with these rules and regulations will nonetheless increase our legal, accounting, and financial compliance costs and investor relations and public relations costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources, particularly after we are no longer an “emerging growth company.” The Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and operating results as well as proxy statements.
Compliance with these rules and regulations will nonetheless increase our legal, accounting, and financial compliance costs and investor relations and public relations costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources.
Removed
See a more detailed discussion of this risk factor on page 16 of this annual report. ● For as long as we are an emerging growth company, we will not be required to comply with certain reporting requirements, including those relating to accounting standards and disclosure about our executive compensation, that apply to other public companies.
Added
The standards that must be met for management to assess the internal control over financial reporting as effective are evolving and complex, and require significant documentation, testing, and possible remediation to meet the detailed standards.
Removed
Since early 2020, Jiangsu Province, where we conduct a substantial part of our business, was materially impacted by the COVID-19. We have been following the recommendations of local health authorities to minimize exposure risk for our employees, including the temporary closures of our offices and production, and having employees work remotely.
Added
We might not identify one or more material weaknesses in our internal controls in connection with evaluating our compliance with Section 404 of the Sarbanes-Oxley Act.
Removed
Due to the material impacts of COVID-19 on our logistics, our production was picking up slowly and returned to the normal level in May 2020.
Added
The Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and operating results as well as proxy statements.
Removed
Since January 1, 2022 to December 2022, there have been outbreaks of the Omicron variant of the COVID-19 in China and the local governments have placed lockdown and mass testing policies in several provinces, including Jiangsu, Liaoning, Heilongjiang, Henan, and Anhui, where some of our suppliers and clients operate, which had created disruption in the delivery of our raw materials and finished products and negatively impacted our revenue for the year ended March 31, 2023.
Added
However, recent developments with respect to audits of China-based companies create uncertainty about the ability of Enrome LLP to fully cooperate with the PCAOB’s request for audit work papers without the approval of the Chinese authorities.
Removed
Since January 2023 and as of the date of this annual report, the lockdown and mass testing policies had been lifted, since December 2022 and the operations of our suppliers and clients are gradually recovering. For the year ended March 31, 2024, the Company’s operations and those of our suppliers and clients were not materially impacted by the COVID-19.
Removed
We may be unable to continue as a going concern. Our audited financial statements have been prepared on a going concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the ordinary course of business.
Removed
The assessment of our ability to continue as a going concern and to raise sufficient funds to pay for our ongoing operating expenditures and meet our liabilities for the ensuing year involves significant judgment based on historical experience and other factors, including expectation of future events that are believed to be reasonable under the circumstances.
Removed
Our future operations are dependent upon the identification and successful completion of equity or debt financings and the achievement of profitable operations at an indeterminate time in the future. There can be no assurances that we will be successful in completing equity or debt financings or in achieving profitability.
Removed
Such litigation, if instituted against us, could result in very substantial costs, divert our management’s attention and resources and harm our business, operating results and financial condition. 16 For as long as we are an emerging growth company, we will not be required to comply with certain reporting requirements, including those relating to accounting standards and disclosure about our executive compensation, that apply to other public companies.
Removed
In April 2012, President Obama signed into law the JOBS Act. We are classified as an “emerging growth company” under the JOBS Act.
Removed
For as long as we are an emerging growth company, which may be up to five full fiscal years, unlike other public companies, we will not be required to, among other things, (i) provide an auditor’s attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act, (ii) comply with any new requirements adopted by the PCAOB requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer, (iii) provide certain disclosure regarding executive compensation required of larger public companies or (iv) hold nonbinding advisory votes on executive compensation.
Removed
We will remain an emerging growth company for up to five years, although we will lose that status sooner if we have more than $1.235 billion of revenues in a fiscal year, have more than $700 million in market value of our Ordinary Shares held by non-affiliates, or issue more than $1.0 billion of non-convertible debt over a three-year period.
Removed
To the extent that we rely on any of the exemptions available to emerging growth companies, you will receive less information about our executive compensation and internal control over financial reporting than issuers that are not emerging growth companies.
Removed
If some investors find our Ordinary Shares to be less attractive as a result, there may be a less active trading market for our Ordinary Shares and our stock price may be more volatile.
Removed
However, while we remain an emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.
Removed
The presence of material weaknesses in internal control over financial reporting could result in financial statement errors which, in turn, could lead to errors in our financial reports and/or delays in our financial reporting, which could require us to restate our operating results.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

46 edited+2 added−2 removed232 unchanged
The Guidance supplies critical information to TCMP manufacturers regarding origin of ingredients, description, identification, processing, assay, property and flavor, meridian tropism, actions, indications, administration and dosage, precautions and warnings and storage.
The Guidance supplies critical information to TCMP manufacturers regarding origin of ingredients, description, identification, processing, assay, property and flavor, meridian tropism, actions, indications, administration and dosage, precautions and warnings and storage.
Instead, WFOE, Taizhou Suxuantang and its shareholders entered into a series of contractual arrangements, also known as VIE Agreements, pursuant to which, we are regarded as the primary beneficiary of Taizhou Suxuantang for accounting purpose, and, therefore, we are able to consolidate the financial results of Taizhou Suxuantang in our consolidated financial statements in accordance with U.S. GAAP.
Instead, WFOE, Taizhou Suxuantang and its shareholders entered into a series of contractual arrangements, also known as VIE Agreements, pursuant to which, we are regarded as the primary beneficiary of Taizhou Suxuantang for accounting purpose, and, therefore, we are able to consolidate the financial results of Taizhou Suxuantang in our consolidated financial statements in accordance with U.S. GAAP.
Like Directly-Oral-TCMP, our After-Soaking-Oral-TCMP provide the special features of being non-decocting, such as keeping NMPA-recognized TCM theoretic fundamental principles, preserving the quality of TCM original ingredients, increasing aqueous extracts to improve bioavailability for bioactive constitutes, and being easy to use and store. Fine TCMP We currently have 5 Fine TCMP products for drug stores and hospitals.
Like Directly-Oral-TCMP, our After-Soaking-Oral-TCMP provide the special features of being non-decocting, such as keeping NMPA-recognized TCM theoretic fundamental principles, preserving the quality of TCM original ingredients, increasing aqueous extracts to improve bioavailability for bioactive constitutes, and being easy to use and store. Fine TCMP We have 5 Fine TCMP products for drug stores and hospitals.
Risk Factors-Risks Related to Doing Business in China-The Opinions, the Trial Measures, and the revised Provisions recently issued by the PRC authorities may subject us to additional compliance requirements in the future.” Other than the foregoing, as of the date of this annual report, we are not aware of any PRC laws or regulations in effect requiring that we obtain permission from any PRC authorities to issue securities to foreign investors, and we have not received any inquiry, notice, warning, sanction, or any regulatory objection to the listing and trading of our Ordinary Shares from the CSRC, the CAC, or any other PRC authorities that have jurisdiction over our operations. 31 Transfers Between Our Company, Our Subsidiaries, and the VIE As of the date of this annual report, our Company, SXT HK, WFOE, and the VIE have not distributed any earnings or settled any amounts owed under the VIE Agreements.
Risk Factors-Risks Related to Doing Business in China-The Opinions, the Trial Measures, and the revised Provisions recently issued by the PRC authorities may subject us to additional compliance requirements in the future.” Other than the foregoing, as of the date of this annual report, we are not aware of any PRC laws or regulations in effect requiring that we obtain permission from any PRC authorities to issue securities to foreign investors, and we have not received any inquiry, notice, warning, sanction, or any regulatory objection to the listing and trading of our Ordinary Shares from the CSRC, the CAC, or any other PRC authorities that have jurisdiction over our operations. 30 Transfers Between Our Company, Our Subsidiaries, and the VIE As of the date of this annual report, our Company, SXT HK, WFOE, and the VIE have not distributed any earnings or settled any amounts owed under the VIE Agreements.
Subject to the passive foreign investment company (“PFIC”) rules, the gross amount of distributions we make to investors with respect to our Ordinary Shares (including the amount of any taxes withheld therefrom) will be taxable as a dividend, to the extent that the distribution is paid out of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. 32 Subject to the BVI Act and our M&A, our directors may, by resolution, declare dividends at a time and amount as they think fit if they are satisfied, based on reasonable grounds, that, immediately after distribution of the dividend, the value of our assets will exceed our liabilities and we will be able to pay our debts as they fall due.
Subject to the passive foreign investment company (“PFIC”) rules, the gross amount of distributions we make to investors with respect to our Ordinary Shares (including the amount of any taxes withheld therefrom) will be taxable as a dividend, to the extent that the distribution is paid out of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. 31 Subject to the BVI Act and our M&A, our directors may, by resolution, declare dividends at a time and amount as they think fit if they are satisfied, based on reasonable grounds, that, immediately after distribution of the dividend, the value of our assets will exceed our liabilities and we will be able to pay our debts as they fall due.
Almost all of our members, except our CEO Mr. Feng Zhou, whose expertise is procurement, possess more than 10 years of pharmaceutical and related industry experience. We believe that our leadership team is well positioned to lead us through clinical development, regulatory approval and commercialization of our product candidates.
Almost all of our members, except our Co-CEO Mr. Feng Zhou, whose expertise is procurement, possess more than 10 years of pharmaceutical and related industry experience. We believe that our leadership team is well positioned to lead us through clinical development, regulatory approval and commercialization of our product candidates.
The following table sets forth the breakdown of our employees as of March 31, 2024 by function: Number of Employees % of Total Function Technology and Development 13 18 % Operations, Sales and Marketing 9 12 % Product Development 31 41 % General and Administrative 22 29 % Total 75 100 % As required by PRC regulations, we participate in various government statutory employee benefit plans, including social insurance funds, namely a pension contribution plan, a medical insurance plan, an unemployment insurance plan, a work-related injury insurance plan and a maternity insurance plan, and a housing provident fund.
The following table sets forth the breakdown of our employees as of March 31, 2025 by function: Number of Employees % of Total Function Technology and Development 13 18 % Operations, Sales and Marketing 9 12 % Product Development 31 41 % General and Administrative 22 29 % Total 75 100 % As required by PRC regulations, we participate in various government statutory employee benefit plans, including social insurance funds, namely a pension contribution plan, a medical insurance plan, an unemployment insurance plan, a work-related injury insurance plan and a maternity insurance plan, and a housing provident fund.
Since the sole business of WFOE is to provide Taizhou Suxuantang with technical support, consulting services and other management services relating to its day-to-day business operations and management in exchange for a service fee approximately equal to the net income of Taizhou Suxuantang, such business scope is necessary and appropriate under PRC laws. 28 China SXT Pharmaceutical is a holding company with no business operation other than holding the shares in SXT HK; SXT HK is a pass-through entity with no business operation.
Since the sole business of WFOE is to provide Taizhou Suxuantang with technical support, consulting services and other management services relating to its day-to-day business operations and management in exchange for a service fee approximately equal to the net income of Taizhou Suxuantang, such business scope is necessary and appropriate under PRC laws. 27 China SXT Pharmaceutical is a holding company with no business operation other than holding the shares in SXT HK; SXT HK is a pass-through entity with no business operation.
Application Date A traditional chinese medicine roasting processing equipment Utility Model 202226702142 2022-10-11 A soaking and cleaning machine for traditional chinese medicine Utility Model 202220936550 2022-08-10 A rotary traditional chinese medicine beverage machine Utility Model 202217465078 2022-07-08 A hot air circulating oven for use with traditional chinese medicine Utility Model 2022214119868 2022-06-08 A flip-board dryer for use with traditional chinese medicine Utility Model 2022214122964 2022-06-08 39 Environmental Matters We comply with the Environmental Protection Law of China as well as applicable local regulations.
Application Date A traditional chinese medicine roasting processing equipment Utility Model 202226702142 2022-10-11 A soaking and cleaning machine for traditional chinese medicine Utility Model 202220936550 2022-08-10 A rotary traditional chinese medicine beverage machine Utility Model 202217465078 2022-07-08 A hot air circulating oven for use with traditional chinese medicine Utility Model 2022214119868 2022-06-08 A flip-board dryer for use with traditional chinese medicine Utility Model 2022214122964 2022-06-08 38 Environmental Matters We comply with the Environmental Protection Law of China as well as applicable local regulations.
As a result, we believe the curative effects of our products have been firmly demonstrated. 41 Ready to Use TCMPs Unlike most TCMPs in the market that have to be prepared as decoction before use, our innovative Directly-Oral-TCMPs and After-Soaking-Oral-TCMPs can be easily dissolved or infused in hot water without requiring lengthy preparation.
As a result, we believe the curative effects of our products have been firmly demonstrated. 40 Ready to Use TCMPs Unlike most TCMPs in the market that have to be prepared as decoction before use, our innovative Directly-Oral-TCMPs and After-Soaking-Oral-TCMPs can be easily dissolved or infused in hot water without requiring lengthy preparation.
Organizational Structure Chart The following diagram illustrates our corporate structure, including our subsidiaries and consolidated affiliated entities, as of the date of this annual report: 47 Contractual Arrangements between WFOE and Taizhou Suxuantang Due to PRC legal restrictions on foreign ownership in the pharmaceutical sector, neither we nor our subsidiaries own any equity interest in Taizhou Suxuantang.
Organizational Structure Chart The following diagram illustrates our corporate structure, including our subsidiaries and consolidated affiliated entities, as of the date of this annual report: 46 Contractual Arrangements between WFOE and Taizhou Suxuantang Due to PRC legal restrictions on foreign ownership in the pharmaceutical sector, neither we nor our subsidiaries own any equity interest in Taizhou Suxuantang.
Our research and development team has demonstrated its success in use of the sophisticated research strategies and modern technologies to develop TCMP products with innovative features that lend us an edge over our major competitors. We have established a strong research and development team of 13 dedicated researchers as of March 31, 2024.
Our research and development team has demonstrated its success in use of the sophisticated research strategies and modern technologies to develop TCMP products with innovative features that lend us an edge over our major competitors. We have established a strong research and development team of 13 dedicated researchers as of March 31, 2025.
Although it is not explicitly stipulated in the Power of Attorney, the term of the Power of Attorney shall be the same as the term of that of the Exclusive Option Agreement. 49 This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid for each shareholder from the date it is executed until the date he/she no longer is a shareholder of Taizhou Suxuantang.
Although it is not explicitly stipulated in the Power of Attorney, the term of the Power of Attorney shall be the same as the term of that of the Exclusive Option Agreement. 48 This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid for each shareholder from the date it is executed until the date he/she no longer is a shareholder of Taizhou Suxuantang.
Our quality control starts with procurement and continues in our manufacturing, packaging, storage capabilities, and cost competitiveness to ensure that all of our products meet the requirements and are still profitable. 40 Certificates and Permits A pharmaceutical manufacturer, including a TCMP manufacturer, must obtain a Pharmaceutical Manufacturing Permit from the NMPA’s relevant provincial branch.
Our quality control starts with procurement and continues in our manufacturing, packaging, storage capabilities, and cost competitiveness to ensure that all of our products meet the requirements and are still profitable. 39 Certificates and Permits A pharmaceutical manufacturer, including a TCMP manufacturer, must obtain a Pharmaceutical Manufacturing Permit from the NMPA’s relevant provincial branch.
Our success in existing product development and branding reflects the significant experience that members of our management team have in their respective fields of expertise and their in-depth knowledge of the regulatory framework in China. 42 Our Growth Strength The key elements of our strategy to grow our business include: Promoting Our Existing Brands to Increase Our National Recognition.
Our success in existing product development and branding reflects the significant experience that members of our management team have in their respective fields of expertise and their in-depth knowledge of the regulatory framework in China. 41 Our Growth Strength The key elements of our strategy to grow our business include: Promoting Our Existing Brands to Increase Our National Recognition.
Besides general GMP for drugs, the production of TCMP also needs to follow the GMP specifically tailored for TCMP, which can be found as annex attached to NMPA regulations. 44 Regulations Relating to Pharmaceutical Industry. The pharmaceutical industry in China is highly regulated. The primary regulatory authority is the NMPA, including its provincial and local branches.
Besides general GMP for drugs, the production of TCMP also needs to follow the GMP specifically tailored for TCMP, which can be found as annex attached to NMPA regulations. 43 Regulations Relating to Pharmaceutical Industry. The pharmaceutical industry in China is highly regulated. The primary regulatory authority is the NMPA, including its provincial and local branches.
The following table summarizes the approved indications for our marketed TCMP products and the year in which each such product was first marketed to our distributors. 34 Product Ingredients Indication Year of Commercial Launch SanQiFen (powders) Powders of roots and rhizomes of Panax notoginseng containing ginsenoside and sanchinoside, dencichine, flavonoids, amino acids.
The following table summarizes the approved indications for our marketed TCMP products and the year in which each such product was first marketed to our distributors. 33 Product Ingredients Indication Year of Commercial Launch SanQiFen (powders) Powders of roots and rhizomes of Panax notoginseng containing ginsenoside and sanchinoside, dencichine, flavonoids, amino acids.
All of these patents are preparation process patents, which do not involve new products. 37 Our general R&D strategy was established to use advanced technology to revolutionize TCMP production and continue developing newly advanced and non-decocting TCMP/TCM products capable of meeting the highest quality standard.
All of these patents are preparation process patents, which do not involve new products. 36 Our general R&D strategy was established to use advanced technology to revolutionize TCMP production and continue developing newly advanced and non-decocting TCMP/TCM products capable of meeting the highest quality standard.
Under the administration and regulation of the NMPA, a new TCMP product is subject to GMP requirements to comply with corresponding standards of Chinese Pharmacopeia (Version 2020) Parts I and Part IV before it can be sold commercially without clinic trails and any additional approval from the NMPA.
Under the administration and regulation of the NMPA, a new TCMP product is subject to GMP requirements to comply with corresponding standards of Chinese Pharmacopeia (Version 2020) Parts I and Part IV before it can be sold commercially without clinic trai’ls and any additional approval from the NMPA.
Key Information-D. Risk Factors- Risks Related to Our Business-Our business requires a number of permits and licenses.” 30 We are currently not required to obtain permission from any of the PRC authorities for the trading of Ordinary Shares in foreign stock exchanges.
Key Information-D. Risk Factors- Risks Related to Our Business-Our business requires a number of permits and licenses.” 29 We are currently not required to obtain permission from any of the PRC authorities for the trading of Ordinary Shares in foreign stock exchanges.
As of the date of this annual report, we have successfully developed four solid beverage products. 38 Intellectual Property We emphasize the protection of intellectual property and have signed agreements with patent agents to assist us to file patent applications. We also have signed confidentiality agreements with every employee we have to protect our production design.
As of the date of this annual report, we have successfully developed four solid beverage products. 37 Intellectual Property We emphasize the protection of intellectual property and have signed agreements with patent agents to assist us to file patent applications. We also have signed confidentiality agreements with every employee we have to protect our production design.
The Taizhou Suxuantang Shareholders further agree not to dispose of the pledged equity interests or take any actions that would prejudice WFOE’s interest. 48 The Share Pledge Agreement shall be effective upon execution. Taizhou Suxuantang does not have the right to terminate the Share Pledge Agreement. Only WFOE has right to terminate the Share Pledge Agreement.
The Taizhou Suxuantang Shareholders further agree not to dispose of the pledged equity interests or take any actions that would prejudice WFOE’s interest. 47 The Share Pledge Agreement shall be effective upon execution. Taizhou Suxuantang does not have the right to terminate the Share Pledge Agreement. Only WFOE has right to terminate the Share Pledge Agreement.
Sore throat, laryngopharyngitis, cough, allergic asthma, diabetes, and intoxication. 2018 36 Product Ingredients Indication Year of Commercial Launch JueMingZi (powders) Mature seeds of Cassia obtusifolia L. containing anthraquinones, naphthyl ketones, fatty acids, volatile constituents, daidzein, polysaccharides, amino acids.
Sore throat, laryngopharyngitis, cough, allergic asthma, diabetes, and intoxication. 2018 35 Product Ingredients Indication Year of Commercial Launch JueMingZi (powders) Mature seeds of Cassia obtusifolia L. containing anthraquinones, naphthyl ketones, fatty acids, volatile constituents, daidzein, polysaccharides, amino acids.
Leukopenia; thrombocytopenia; or hypoimmunity; chronic anemia; aplastic anemia; erectile dysfunction; and postoperative rehabilitation. 2016 35 Product Ingredients Indication Year of Commercial Launch XueJie (powders) Powders of fruit resins of Daemonorops draco containing flavanoide, terpenoid, and phlobaphene constituents, and resins.
Leukopenia; thrombocytopenia; or hypoimmunity; chronic anemia; aplastic anemia; erectile dysfunction; and postoperative rehabilitation. 2016 34 Product Ingredients Indication Year of Commercial Launch XueJie (powders) Powders of fruit resins of Daemonorops draco containing flavanoide, terpenoid, and phlobaphene constituents, and resins.
We believe that we maintain a good working relationship with our employees, and we have not experienced any major labor disputes. 43 Insurance We provide social security insurance including pension insurance, unemployment insurance, work-related injury insurance and medical insurance for our employees.
We believe that we maintain a good working relationship with our employees, and we have not experienced any major labor disputes. 42 Insurance We provide social security insurance including pension insurance, unemployment insurance, work-related injury insurance and medical insurance for our employees.
As of March 31, 2024, our end-customer base includes 57 pharmaceutical companies, 14 chain pharmacies and 16 hospitals in 5 provinces and municipalities in China including Jiangsu, Anhui, Jiangxi, Guangdong and Hubei.
As of March 31, 2025, our end-customer base includes 57 pharmaceutical companies, 14 chain pharmacies and 16 hospitals in 5 provinces and municipalities in China including Jiangsu, Anhui, Jiangxi, Guangdong and Hubei.
As of March 31, 2024, our end-customer base includes 57 pharmaceutical companies, 14 chain pharmacies and 16 hospitals in 5 provinces and municipalities in China including Jiangsu, Anhui, Jiangxi, Guangdong and Hubei.
As of March 31, 2025, our end-customer base includes 57 pharmaceutical companies, 14 chain pharmacies and 16 hospitals in 5 provinces and municipalities in China including Jiangsu, Anhui, Jiangxi, Guangdong and Hubei.
The TCMP production and quality standard must comply with corresponding TCM and sections on the Pharmacopeia of the PRC. 45 Continuing NMPA Regulation Pharmaceutical manufacturers in China are subject to continuing regulation by the NMPA.
The TCMP production and quality standard must comply with corresponding TCM and sections on the Pharmacopeia of the PRC. 44 Continuing NMPA Regulation Pharmaceutical manufacturers in China are subject to continuing regulation by the NMPA.
Employees As of March 31, 2024, we had a total of 75 full-time employees and no part-time employee.
Employees As of March 31, 2025, we had a total of 75 full-time employees and no part-time employee.
The actual price of such medicines set by manufacturers, wholesalers and retailers cannot historically exceed the price ceiling imposed by applicable government price control regulations. We have two products not listed on national Medicare Insurance Catalogue, which are Directly-Oral products LuXueJing (which is listed on Medicare Insurance Catalogue of Jiangsu and Guangzhou provinces) and XueJie (powders).
The actual price of such medicines set by manufacturers, wholesalers and retailers cannot historically exceed the price ceiling imposed by applicable government price control regulations. We have one product not listed on national Medicare Insurance Catalogue, which are Directly-Oral products LuXueJing (which is listed on Medicare Insurance Catalogue of Jiangsu and Guangzhou provinces).
During the fiscal years ended March 31, 2024, 2023, and 2022 cash transfers and transfers of other assets between our Company, SXT HK, WFOE, and the VIE were as follows: For the Year Ended March 31, 2024 No.
During the fiscal years ended March 31, 2025, 2024, and 2023cash transfers and transfers of other assets between our Company, SXT HK, WFOE, and the VIE were as follows: For the Year Ended March 31, 2025 No.
For each principal product’s indications and year of commercialization, see “-Our Products.” 29 Taizhou Suxuantang, the VIE entity, was founded in 2005. Our revenues decreased from $1,971,679 in fiscal year ended March 31, 2023 to $1,928,497 in fiscal year ended March 31, 2024, representing a decrease of 2%.
For each principal product’s indications and year of commercialization, see “-Our Products.” 28 Taizhou Suxuantang, the VIE entity, was founded in 2005. Our revenues decreased from $1,928,497 in fiscal year ended March 31, 2024 to $1,740,907 in fiscal year ended March 31, 2025, representing a decrease of 10%.
Transfer From Transfer To Approximate Value ($) Note 1 SXT HK WFOE 490,785 2 WFOE VIE 648,587 For the Year Ended March 31, 2023 No. Transfer From Transfer To Approximate Value ($) Note 1 SXT HK WFOE 3,469,975 2 The Company VIE 2,204,727 3 WFOE VIE 452,323 For the Year Ended March 31, 2022 No.
Transfer From Transfer To Approximate Value ($) Note 1 SXT HK WFOE 490,785 2 WFOE VIE 648,587 For the Year Ended March 31, 2023 No. Transfer From Transfer To Approximate Value ($) Note 1 SXT HK WFOE 3,469,975 2 The Company VIE 2,204,727 3 WFOE VIE 452,323 Dividends or Distributions Made to our Company and U.S.
Our net loss decreased from $5,934,772 in fiscal year ended March 31, 2023 to $3,098,532 in fiscal year ended March 31, 2024, representing a significant decrease of 48% of net loss during this period. Our revenues decreased from $2,602,281 in fiscal year ended March 31, 2022 to $1,971,679 in fiscal year ended March 31, 2023, representing a decrease of 24%.
Our net loss decreased from $5,934,772 in fiscal year ended March 31, 2023 to $3,098,532 in fiscal year ended March 31, 2024, representing a significant decrease of 48% of net loss during this period.
Our Products We currently sell three types of TCMP products: Advanced TCMP, Fine TCMP and Regular TCMP, and raw medicinal materials. 33 Advanced TCMP Advanced TCMP typically has the highest quality because it requires specialized equipment to manufacture and has to go through more manufacturing steps to produce than Fine TCMP and Regular TCMP.
Our Products We currently sell two types of TCMP products: Advanced TCMP and Regular TCMP for the year ended March 31, 2025, while for the year ended March 31, 2024 , we sold three types of TCMP products: Advanced TCMP, Fine TCMP and Regular TCMP and raw medicinal materials. 32 Advanced TCMP Advanced TCMP typically has the highest quality because it requires specialized equipment to manufacture and has to go through more manufacturing steps to produce than Fine TCMP and Regular TCMP.
If a manufacturer fails to meet the GMP requirements and standards in the NMPA non-scheduled compliance-inspection, it may be suspended the Pharmaceutical Manufacturing Permit by the NMPA. A new GMP Certificate for our manufacturing facility had been issued and is effective from August 5, 2019 to August 4, 2024.
If a manufacturer fails to meet the GMP requirements and standards in the NMPA non-scheduled compliance-inspection, it may be suspended the Pharmaceutical Manufacturing Permit by the NMPA. Our manufacturing facility previously held a GMP Certificate, which was valid from August 5, 2019, to August 4, 2024.
As of the date of this annual report, we have developed and introduced a diverse range of products, which include 11 Advanced TCMPs that have been produced and marketed, 5 Fine TCMPs, 200 Regular TCMPs, and 200 raw medicinal materials. Advanced TCMP is our principal product due to its quality and greater market potential.
As of the date of this annual report, we have developed and introduced a diverse range of products, which include 11 Advanced TCMPs that have been produced and marketed, 5 Fine TCMPs, 200 Regular TCMPs, and 200 raw medicinal materials.
Powdered, liquid, Directly-Oral-TCMP and After-Soaking-Oral-TCMP - Their regulations and standards are complied with the description on the GMP certificate and China Pharmacopeia Parts I and IV, including relation to the limitation of the total number of permitted aerobic organisms, molds and yeasts. However, for every 10 grams of powdered Directly-Oral-TCMP and After-Soaking-Oral-TCMP, shall be no Salmonella bacteria detectable.
There are no standard regulations regarding control microbes. Powdered, liquid, Directly-Oral-TCMP and After-Soaking-Oral-TCMP - Their regulations and standards are complied with the description on the GMP certificate and China Pharmacopeia Parts I and IV, including relation to the limitation of the total number of permitted aerobic organisms, molds and yeasts.
For the fiscal year ended March 31, 2022, Advanced TCMP brought in 44.7% of the total revenue, whereas Fine TCMP and Regular TCMP each brought in 15.4% and 30.5% of the total revenue respectively. Our Advanced TCMP includes 11 products, which can be further divided into 7 Directly-Oral-TCMP products, and 4 After-Soaking-Oral-TCMP products.
For the fiscal year ended March 31, 2023, Advanced TCMP accounted for 33.3% of the total revenue, whereas Fine TCMP and Regular TCMP contributed 5.8% and 35.4% of the total revenue, respectively. Our Advanced TCMP includes 11 products, which can be further divided into 7 Directly-Oral-TCMP products, and 4 After-Soaking-Oral-TCMP products.
Any other bile salt resistant organisms shall not exceed 10 4 cfu (1g). We are in full compliance with these microbial limitation standards. National Drug Reference Standard. Our TCMP products must also satisfy national drug reference standard.
However, for every 10 grams of powdered Directly-Oral-TCMP and After-Soaking-Oral-TCMP, shall be no Salmonella bacteria detectable. Any other bile salt resistant organisms shall not exceed 10 4 cfu (1g). We are in full compliance with these microbial limitation standards. National Drug Reference Standard. Our TCMP products must also satisfy national drug reference standard.
For the fiscal year ended March 31, 2024, Advanced TCMP accounted for 49.1% of the total revenue, whereas Regular TCMP contributed 49.0% of the total revenue, respectively. For the fiscal year ended March 31, 2023, Advanced TCMP accounted for 33.3% of the total revenue, whereas Fine TCMP and Regular TCMP contributed 5.8% and 35.4% of the total revenue, respectively.
For the fiscal year ended March 31, 2025, Advanced TCMP accounted for 14.8% of the total revenue, whereas Regular TCMP contributed 82.9% of the total revenue, respectively. For the fiscal year ended March 31, 2024, Advanced TCMP accounted for 49.1% of the total revenue, whereas Regular TCMP contributed 49.0% of the total revenue, respectively.
On the label of TCMP shall be indicated the name of the drug, grade/weight, origin of production, manufacturer, product batch number and production date; if the said TCMP is controlled by an approval number, the number shall also be indicated. Currently, all of our marketed products meet the packaging requirements. 46 Microbial limitation standards on Chinese medicine extraction and TCMP.
A label shall be printed on or attached to the package of TCMP. On the label of TCMP shall be indicated the name of the drug, grade/weight, origin of production, manufacturer, product batch number and production date; if the said TCMP is controlled by an approval number, the number shall also be indicated.
Chinese medicine extraction - The total number of aerobic organisms shall not exceed 10³ cfu/g or cfu/ml. The total number of molds and yeasts in Chinese medicine extraction shall not exceed 10² cfu/g or cfu/ml. There are no standard regulations regarding control microbes.
Currently, all of our marketed products meet the packaging requirements. 45 Microbial limitation standards on Chinese medicine extraction and TCMP. Chinese medicine extraction - The total number of aerobic organisms shall not exceed 10³ cfu/g or cfu/ml. The total number of molds and yeasts in Chinese medicine extraction shall not exceed 10² cfu/g or cfu/ml.
Our net loss increased from $5,736,095 in fiscal year ended March 31, 2022 to $5,934,772 in fiscal year ended March 31, 2023, representing a slight increase of 3% of net loss during this period.
Our net loss decreased from $3,098,532 in fiscal year ended March 31, 2024 to $2,297,600 in fiscal year ended March 31, 2025, representing a decrease of 26% of net loss during this period. Our revenues decreased from $1,971,679 in fiscal year ended March 31, 2023 to $1,928,497 in fiscal year ended March 31, 2024, representing a decrease of 2%.
Packaging materials and containers selected for production of all TCMP shall accommodate to drug property. No TCMP whose package fails to conform to regulations may be marketed. A label shall be printed on or attached to the package of TCMP.
The revenue attributable to LuXueJing were $481,431 (RMB 3,298,573), $900,701 (RMB 6,455,411), and $259,184 (RMB 1,870,351) for the years ended March 31, 2023, 2024 and 2025, respectively. Packaging materials and containers selected for production of all TCMP shall accommodate to drug property. No TCMP whose package fails to conform to regulations may be marketed.
Transfer From Transfer To Approximate Value ($) Note 1 The Company SXT HK 5,000,000 2 SXT HK WFOE 4,069,982 3 WFOE VIE 715,723 Dividends or Distributions Made to our Company and U.S.
Transfer From Transfer To Approximate Value ($) Note 1 The Company SXT HK 580,000 2 SXT HK WFOE 579,992 3 SXT HK VIE 33,682 4 WFOE VIE 458,016 For the Year Ended March 31, 2024 No.
Removed
We were inspected for our compliance with GMP requirements in April 2024 and, as of the date of this annual report, we have submitted all required documents for the renewal of our GMP Certificate as of the date of this annual report..
Added
Following a change in government policy, regulatory authorities no longer issue new GMP Certificates and instead provide an inspection satisfactory notice upon verification of compliance. In April 2024, we underwent a GMP compliance inspection by the relevant government authority.
Removed
The revenue attributable to LuXueJing were $449,975 (RMB 2,887,939), $481,431 (RMB 3,298,573) and $900,701 (RMB 6,455,411) for the years ended March 31, 2022, 2023 and 2024, respectively. The revenue attributable to Xuejie powders is $1,660 (RMB 10,657), $7,818 (RMB 53,566) and Nil for the years ended March 31, 2022, 2023 and 2024, respectively.
Added
As of the date of this annual report, we have received the inspection satisfactory notice and have not been notified of any revocation or suspension of this notice.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

47 edited+8 added−28 removed42 unchanged
Results of Operations for the Year Ended March 31, 2024 Compared to the Year Ended March 31, 2023 For the Years Ended March 31, Change 2024 2023 Amount % Revenues $ 1,928,497 $ 1,971,679 $ (43,182 ) (2 ) Cost of revenues (1,374,526 ) (1,545,408 ) 170,882 (11 ) Gross profit 553,971 426,271 127,700 30 Selling expenses (433,566 ) (387,452 ) (46,114 ) 12 General and administrative expenses (2,635,622 ) (5,646,328 ) 3,010,706 (53 ) Total operating expenses (3,069,188 ) (6,033,780 ) 2,964,592 (49 ) Loss from operations (2,515,217 ) (5,607,509 ) 3,092,292 (55 ) Interest expense, net (544,279 ) (476,776 ) (67,503 ) 14 Other (expenses) income, net (39,036 ) 149,513 (188,549 ) (126 ) Total other expenses, net (583,315 ) (327,263 ) (256,052 ) 78 Loss before income taxes expense (3,098,532 ) (5,934,772 ) 2,836,240 (48 ) Income tax expenses - - - - Net Loss $ (3,098,532 ) $ (5,934,772 ) $ 2,836,240 (48 ) 51 Revenues We generated revenues primarily from manufacture and sales of the following products: three types of TCMP products, consisting of Advanced TCMP, Fine TCMP and Regular TCMP, and raw medicinal materials and others.
Results of Operations for the Year Ended March 31, 2024 Compared to the Year Ended March 31, 2023 For the Years Ended March 31, Change 2024 2023 Amount % Revenues $ 1,928,497 $ 1,971,679 $ (43,182 ) (2 ) Cost of revenues (1,374,526 ) (1,545,408 ) 170,882 (11 ) Gross profit 553,971 426,271 127,700 30 Selling and marketing expenses (433,566 ) (387,452 ) (46,114 ) 12 General and administrative expenses (2,635,622 ) (5,646,328 ) 3,010,706 (53 ) Total operating expenses (3,069,188 ) (6,033,780 ) 2,964,592 (49 ) Loss from operations (2,515,217 ) (5,607,509 ) 3,092,292 (55 ) Interest expense, net (544,279 ) (476,776 ) (67,503 ) 14 Other income (expenses), net (39,036 ) 149,513 (188,549 ) (126 ) Total other expenses, net (583,315 ) (327,263 ) (256,052 ) 78 Loss before income taxes expense (3,098,532 ) (5,934,772 ) 2,836,240 (48 ) Income tax expenses - - - - Net Loss $ (3,098,532 ) $ (5,934,772 ) $ 2,836,240 (48 ) 53 Revenues We generated revenues primarily from manufacture and sales of the following products: three types of TCMP products, consisting of Advanced TCMP, Fine TCMP and Regular TCMP, and raw medicinal materials and others.
Cash Flow in Financing Activities For the year ended March 31, 2024, the net cash used in financing activities was $2,624,428, which was primarily attributable to advances to related parties of $2,205,254, repayment to related parties of $1,727,418, repayment of principal and interest of bank loans of $78,654, offset by net proceeds from the issuance of convertible notes of $952,971(gross proceeds of $1,063,333 and debt issuance cost of $110,362) and proceeds from borrowing from banks and individuals of $433,927.
For the year ended March 31, 2024, the net cash used in financing activities was $2,624,428, which was primarily attributable to advances to related parties of $2,205,254, repayment to related parties of $1,727,418, repayment of principal and interest of bank loans of $78,654, offset by net proceeds from the issuance of convertible notes of $952,971(gross proceeds of $1,063,333 and debt issuance cost of $110,362) and proceeds from borrowing from banks and individuals of $433,927.
General and administrative expenses of $5,646,328 for the year ended March 31, 2023 mainly consisted of payroll expenses of $$1,151,466, credit loss for accounts receivable of $820,352, credit loss for prepayment, receivable and other current assets of $474,342, credit loss for loan receivable and accrued interest of $1,581,000, and impairment expense for construction in progress of $349,390.
General and administrative expenses of $5,646,328 for the year ended March 31, 2023 mainly consisted of payroll expenses of $$1,151,466, credit loss for accounts receivable of $820,352, credit loss for other receivable and other current assets of $474,342, credit loss for loan receivable and accrued interest of $1,581,000, and impairment expense for construction in progress of $349,390.
Selling Expenses Selling expenses primarily consisted of sales staff payroll and welfare expenses, travelling expenses, market development and advertising fees, distribution and promotion expenses. The selling expenses increased from $387,452 for the year ended March 31, 2023 to $433,566 for the year ended March 31, 2024, representing an increase of $46,114, or 11%.
Selling and Marketing Expenses Selling and marketing expenses primarily consisted of sales staff payroll and welfare expenses, travelling expenses, market development and advertising fees, distribution and promotion expenses. The selling and marketing expenses increased from $387,452 for the year ended March 31, 2023 to $433,566 for the year ended March 31, 2024, representing an increase of $46,114, or 11%.
The significant decrease in our general and administrative expenses is mainly due to the following reasons: (i) the staff payroll and welfare expenses decreased significantly during the year ended March 31, 2024 compared to the year ended March 31, 2023; (ii) the credit loss provision decreased by 90% during the year ended March 31, 2024 compared to the year ended March 31, 2023. 53 Other Income (Expenses), Net Interest expenses, net for the year ended March 31, 2024 mainly consisted of accretion of finance cost and interest expense related to the Convertible Note we issued on December 19, 2022, March 7, 2023, December 13, 2023 and March 27, 2024, and interest expenses from our borrowings from banks and various individuals.
The significant decrease in our general and administrative expenses is mainly due to the following reasons: (i) the staff payroll and welfare expenses decreased significantly during the year ended March 31, 2024 compared to the year ended March 31, 2023; (ii) the credit loss provision decreased by 90% during the year ended March 31, 2024 compared to the year ended March 31, 2023. 55 Other Income (Expense), Net Interest expenses, net for the year ended March 31, 2024 mainly consisted of accretion of finance cost and interest expense related to the Convertible Note we issued on December 19, 2022, March 7, 2023, December 13, 2023 and March 27, 2024, and interest expenses from our borrowings from banks and various individuals.
The increase in selling expenses was mainly due to the increase market development and advertising fee from $227,850 for the year ended March 31, 2023 to $327,208 for the year ended March 31, 2024.
The increase in selling and marketing expenses was mainly due to the increase market development and advertising fee from $227,850 for the year ended March 31, 2023 to $327,208 for the year ended March 31, 2024.
Critical accounting estimates are those estimates made in accordance with generally accepted accounting principles that i) involve a significant level of estimation uncertainty and ii) have had or are reasonably likely to have a material impact on the financial condition or results of operations. The management determined there were no critical accounting estimates. 62
Critical accounting estimates are those estimates made in accordance with generally accepted accounting principles that i) involve a significant level of estimation uncertainty and ii) have had or are reasonably likely to have a material impact on the financial condition or results of operations. The management determined there were no critical accounting estimates. 61
See “Forward-Looking Statements”. 50 Key Factors Affecting Our Results of Operation We are an offshore holding company incorporated in British Virgin Islands and we conduct all of our business through our subsidiaries and the consolidated variable interest entity, Taizhou Suxuantang, in China. Neither we nor our subsidiaries own any share in Taizhou Suxuantang.
See “Forward-Looking Statements”. 49 Key Factors Affecting Our Results of Operation We are an offshore holding company incorporated in British Virgin Islands and we conduct all of our business through our subsidiaries and the consolidated variable interest entity, Taizhou Suxuantang, in China. Neither we nor our subsidiaries own any share in Taizhou Suxuantang.
The increase in revenue from Regular TCMP products is due to the increased market demand for our Regular TCMP during the year ended March 31, 2024. 52 Raw medicinal materials For the year ended March 31, 2024 and 2023, we generated revenue from sales of raw medicinal materials of $24,166 and $502,425, which represented 1% and 25% of our total revenue, respectively.
The increase in revenue from Regular TCMP products is due to the increased market demand for our Regular TCMP during the year ended March 31, 2024. 54 Raw medicinal materials For the year ended March 31, 2024 and 2023, we generated revenue from sales of raw medicinal materials of $24,166 and $502,425, which represented 1% and 25% of our total revenue, respectively.
Cash Flow in Investing Activities We had net cash provided by investing activities of $26,423 for the year ended March 31, 2024, which primarily consisted of cash received from Huangshan Panjie Investment Management Co., Ltd. of $33,486, offset by cash paid for purchase of property, plant and equipment of $7,063.
We had net cash provided by investing activities of $26,423 for the year ended March 31, 2024, which primarily consisted of cash received from Huangshan Panjie Investment Management Co., Ltd. of $33,486, offset by cash paid for purchase of property, plant and equipment of $7,063.
As of March 31, 2024, our VIE accounted for an aggregate of 98% and 75% of our total assets and total liabilities, respectively.
As of March 31, 2025, our VIE accounted for an aggregate of 90% and 91% of our total assets and total liabilities, respectively. As of March 31, 2024, our VIE accounted for an aggregate of 98% and 75% of our total assets and total liabilities, respectively.
For the year ended March 31, 2023, the change in refund liabilities was $1,380 net cash outflow, which led to a $0.11 million increase in net cash inflow from operating activities.
For the year ended March 31, 2024, the change in refund liabilities was $0.11 million net cash inflow, which led to a $0.27 million increase in net cash outflow from operating activities.
This has resulted in a cash and cash equivalents and restricted cash balance of $12,077,187 as of March 31, 2024, as compared to $17,368,478 as of March 31, 2023. We primarily hold our excess unrestricted cash in short-term interest-bearing bank accounts at financial institutions.
This has resulted in a cash and cash equivalents and restricted cash balance of $18,129,432 as of March 31, 2025, as compared to $12,077,187 as of March 31, 2024. We primarily hold our excess unrestricted cash in short-term interest-bearing bank accounts at financial institutions.
Related Party Transactions” and Note 17 of our Consolidated Financial Statements included in this Form 20-F for details of related parties and material related party transactions. Critical Accounting Estimates The preparation of consolidated financial statements in conformity with U.S.
Related Parties and Material Related Party Transactions Please refer to “Item 7.B. Related Party Transactions” and Note 19 of our Consolidated Financial Statements included in this Form 20-F for details of related parties and material related party transactions. Critical Accounting Estimates The preparation of consolidated financial statements in conformity with U.S.
Both Directly Oral TCMP and After-soaking-oral TCMP are new types of Advanced TCMP. Revenue from Advanced TCMP accounted for 33% and 45% of the revenue recognized during the years ended March 31, 2023 and 2022, respectively.
Both Directly Oral TCMP and After-soaking-oral TCMP are new types of Advanced TCMP. Revenue from Advanced TCMP accounted for 15% and 49% of the revenue recognized during the years ended March 31, 2025 and 2024, respectively.
Regular TCMP We manufactured 235 Regular TCMP products listed on China Pharmacopoeia (version 2020) Parts I and IV for hospitals and drug stores in treatment of various diseases or serving as dietary supplements. Revenue from Regular TCMP accounted for 35% and 30% of the revenue recognized during the years ended March 31, 2023 and 2022, respectively.
Regular TCMP We currently manufacture 200 Regular TCMP products listed on China Pharmacopoeia (version 2020) Parts I and IV for hospitals and drug stores in treatment of various diseases or serving as dietary supplements. Revenue from Regular TCMP accounted for 83% and 49% of the revenue recognized during the years ended March 31, 2025 and 2024, respectively.
General and Administrative Expenses General and administrative expenses primarily consisted of staff payroll and welfare expenses, research and development expenses, entertainment expenses, travelling expenses, depreciation and amortization expenses for administrative purposes, office supply expenses, bad debt expenses and impairment expenses.
General and Administrative Expenses General and administrative expenses primarily consisted of staff payroll and welfare expenses, research and development expenses, professional fees, entertainment expenses, travelling expenses, depreciation and amortization expenses for administrative purposes, office supply expenses, credit loss provision and impairment expenses.
For the year ended March 31, 2022, the change in advance to suppliers was $0.48 million net cash inflow, which led to a $0.48 million decrease in net cash inflow from operating activities. d) Change in prepayments, receivables and other current assets was $0.05 million net cash inflow for the year ended March 31, 2023.
For the year ended March 31, 2024, the change in advance to suppliers was $0.03 million net cash inflow, which led to a $0.33 million increase in net cash outflow from operating activities. d) Change in other receivables and other current assets was $0.22 million net cash outflow for the year ended March 31, 2025.
For the year ended March 31, 2022, the change in prepayments, receivables and other current assets was $1.02 million net cash inflow, which led to a $0.97 million decrease in net cash inflow from operating activities. e) Change in refund liabilities was $1,380 net cash outflow for the year ended March 31, 2023.
For the year ended March 31, 2024, the change in other receivables and other current assets was $0.14 million net cash inflow, which led to a $0.36 million increase in net cash outflow from operating activities. e) Change in refund liabilities was $0.16 million net cash outflow for the year ended March 31, 2025.
As of March 31, 2024, we had a balance of $1,047,550 due to related parties, which we expect to repay using our cash and cash equivalents. 59 For the years ended March 31, 2024 2023 2022 Net cash (used in) provided by operating activities $ (1,928,053 ) $ (80,757 ) 268,293 Net cash provided by (used in) investing activities 26,423 (12,303 ) (46,909 ) Net cash (used in) provided by financing activities (2,624,428 ) 2,941,602 1,595,140 Effect of exchange rate changes on cash and cash equivalents (765,233 ) (1,049,683 ) 394,120 Net (decrease) increase in cash, cash equivalents and restricted cash (5,291,291 ) 1,798,859 2,210,644 Cash, cash equivalents and restricted cash at beginning of year 17,368,478 15,569,619 13,358,975 Cash, cash equivalents and restricted cash at end of year $ 12,077,187 $ 17,368,478 15,569,619 Cash Flow in Operating Activities For the year ended March 31, 2024, net cash used in operating activities was $1,928,053, as compared to net cash used in operating activities of $80,757 for the year ended March 31, 2023, representing an increase in cash outflow of $1,847,296.
As of March 31, 2025 and 2024, we had a balance of $7,267,770 and $1,047,550 due to related parties, respectively, which we expect to repay using our cash and cash equivalents. 58 For the years ended March 31, 2025 2024 2023 Net cash used in operating activities $ (2,345,333 ) $ (1,928,053 ) (80,757 ) Net cash provided by (used in) investing activities 63,516 26,423 (12,303 ) Net cash provided by (used in) financing activities 8,399,153 (2,624,428 ) 2,941,602 Effect of exchange rate changes on cash and cash equivalents (65,091 ) (765,233 ) (1,049,683 ) Net increase (decrease) in cash, cash equivalents and restricted cash 6,052,245 (5,291,291 ) 1,798,859 Cash, cash equivalents and restricted cash at beginning of the year 12,077,187 17,368,478 15,569,619 Cash, cash equivalents and restricted cash at end of the year $ 18,099,019 $ 12,077,187 17,368,478 Cash Flow in Operating Activities For the year ended March 31, 2025, net cash used in operating activities was $2,345,333, as compared to net cash used in operating activities of $1,928,053 for the year ended March 31, 2024, representing an increase in cash outflow of $417,280.
Pursuant to the VIE Agreements, WFOE is regarded as the primary beneficiary of Taizhou Suxuantang and we are able to consolidate the financial statements of Taizhou Suxuantang in accordance with U.S. GAAP.
WFOE, shareholders of Taizhou Suxuantang and Taizhou Suxuantang entered into a series of contractual arrangements, also known as VIE Agreements, on October 13, 2017. Pursuant to the VIE Agreements, WFOE is regarded as the primary beneficiary of Taizhou Suxuantang and we are able to consolidate the financial statements of Taizhou Suxuantang in accordance with U.S. GAAP.
The following is a selected consolidating schedule depicting the financial position as of March 31, 2024 and 2023, cash flows and results of operations for the years ended March 31, 2024 and 2023 for our Company, our subsidiaries, the VIE and corresponding eliminating adjustments.
As of March 31, 2025 and 2024, $17,897,875 and $$11,589,400 of cash and cash equivalents were denominated in RMB, respectively. 56 The following is a selected consolidating schedule depicting the financial position as of March 31, 2025 and 2024, cash flows and results of operations for the years ended March 31, 2025 and 2024 for our Company, our subsidiaries, the VIE and corresponding eliminating adjustments.
For the year ended March 31, 2023, the net cash provided by financing activities was $2,941,602, which was primarily attributable to net proceeds from the issuance of convertible notes of $3,289,930 (gross proceeds of $3,721,667 and debt issuance cost of $431,737), net proceeds from shares purchase agreements of $2,194,827, and proceeds from borrowing from banks and individuals of $309,417, net by repayment to related parties of $2,197,555, advances to related parties of $628,911, and repayment of principal and interest of bank loans of $26,106.
For the year ended March 31, 2023, the net cash provided by financing activities was $2,941,602, which was primarily attributable to net proceeds from the issuance of convertible notes of $3,289,930 (gross proceeds of $3,721,667 and debt issuance cost of $431,737), net proceeds from shares purchase agreements of $2,194,827, and proceeds from borrowing from banks and individuals of $309,417, net by repayment to related parties of $2,197,555, advances to related parties of $628,911, and repayment of principal and interest of bank loans of $26,106. 60 Off-Balance Sheet Arrangements The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
The decrease in net loss was mainly due to the increase in gross profit and decrease in operating expenses.
The increase in net loss was mainly due to the increase in general and administrative expenses.
For the year ended March 31, 2022, the change in inventory was $0.18 million net cash outflow, which led to a $0.59 million increase in net cash inflow from operating activities. 60 c) Change in advance to suppliers was $138 net cash inflow for the year ended March 31, 2023.
For the year ended March 31, 2024, the change in inventory was $0.22 million net cash outflow, which led to a $0.21 million decrease in net cash outflow from operating activities. c) Change in advance to suppliers was $0.30 million net cash outflow for the year ended March 31, 2025.
For the year ended March 31, 2023, we recorded amortization of issuance cost and debt discount of $335,654 and interest expenses of $130,282 for the Convertible Notes. For the year ended March 31, 2023, we recorded interest expenses of $10,840 for the other borrowings from banks and individuals.
For the year ended March 31, 2025, we recorded amortization of issuance cost and debt discount of $520,787 and interest expenses of $106,238 for the Convertible Notes. For the year ended March 31, 2025, we recorded interest expenses of $21,688 for the other borrowings from banks and individuals.
For the years ended March 31, 2023 and 2022, payroll expenses of $1,151,466 and $2,979,374 were recorded in general and administrative expenses. 56 Other Income (Expense), Net Interest expenses, net for the year ended March 31, 2023 mainly consisted of accretion of finance costs and interest expenses related to the Convertible Notes we issued on March 16, 2022, December 19, 2022 and March 7, 2023, and interest expenses from our borrowings from banks and various individuals.
Interest expenses, net for the year ended March 31, 2024 mainly consisted of accretion of finance cost and interest expense related to the Convertible Note we issued on December 19, 2022, March 7, 2023, December 13, 2023 and March 27, 2024, and interest expenses from our borrowings from banks and various individuals.
Income Tax Expenses Income tax expenses represented current and deferred income tax expenses derived from income before taxes generated by Suxuantang, the variable interest entity of the Company. As compared with the year ended March 31, 2022, the income tax expense for the year ended March 31, 2023 decreased by $328,146, or 100%.
Income Tax Expenses Income tax expenses represented current and deferred income tax expenses derived from income before taxes generated by Suxuantang, the variable interest entity of the Company. Current income tax expenses for the years ended March 31, 2025 and 2024 were Nil and Nil, respectively.
This represents an increase in cash inflow of $138,502 for the year ended March 31, 2023, compared with the year ended March 31, 2022. b) Change in inventory was $0.41 million net cash inflow for the year ended March 31, 2023.
This represents a decrease in cash outflow of $172,896 for the year ended March 31, 2025, compared with the year ended March 31, 2024. b) Change in inventory was $0.01 million net cash outflow for the year ended March 31, 2024.
The decrease in cash inflow in operating activities primarily resulted from the change of the following accounts: a) A net loss for the year ended March 31, 2023 of $5,934,772, compared with a net loss of $5,736,095 for the year ended March 31, 2022.
The increase in cash outflow in operating activities primarily resulted from the change of the following accounts: a) A net loss for the year ended March 31, 2025 of $3,303,652, compared with a net loss of $3,098,532 for the year ended March 31, 2024.
Excluding the adjustments of non-cash items, the net losses for the year ended March 31, 2023 and 2022 were $1,496,267 and $1,634,769, respectively.
Excluding the adjustments of non-cash items, net loss for the year ended March 31, 2025 and 2024 were $1,373,598 and $1,546,494, respectively.
Selected Consolidation Schedule of Balance Sheet As of March 31, 2024 Parent and Hong Kong WFOE VIE Elimination and Reclassification Consolidated Cash $ 487,787 $ 3,058 $ 11,586,342 $ - 12,077,187 Intercompany receivables 2,359,863 3,592,064 - (5,951,927 ) - Total Current Assets 2,859,319 3,627,210 13,698,757 (5,951,927 ) 14,233,359 Investment in Subsidiaries 8,430,742 - - (8,430,742 ) - Total Non-current Assets 8,430,742 - 8,893,698 (8,430,742 ) 8,893,698 Intercompany payables - - 5,951,927 (5,951,927 ) - Total Liabilities 2,117,612 178,589 12,852,337 (5,951,927 ) 9,196,611 Total Shareholders’ Equity 9,172,449 3,448,621 9,740,118 (8,430,742 ) 13,930,446 Selected Consolidation Schedule of Operations and Comprehensive Loss For the year ended March 31, 2024 Parent and Hong Kong WFOE VIE Elimination and Reclassification Consolidated Revenues $ - $ 13,150 $ 1,915,347 $ - 1,928,497 Cost of revenues - (9,167 ) (1,365,359 ) - (1,374,526 ) Gross profit - 3,983 549,988 - 553,971 Total operating expenses (621,878 ) (29,977 ) (2,417,333 ) - (3,069,188 ) Loss from operations (621,878 ) (25,994 ) (1,867,345 ) - (2,515,217 ) Net loss (1,147,536 ) (108,498 ) (1,842,498 ) - (3,098,532 ) Total Comprehensive Loss (1,147,536 ) (108,498 ) (2,670,722 ) - (3,926,756 ) Selected Consolidation Schedule of Cash Flows For the year ended March 31, 2024 Parent and Hong Kong WFOE VIE Elimination and Reclassification Consolidated Net cash (used in) provided by operating activities $ (738,154 ) $ 53,990 $ (1,243,891 ) $ - (1,928,053 ) Net cash provided by investing activities - - 26,423 - 26,423 Net cash provided by (used in) financing activities 577,422 (220,917 ) (2,980,933 ) - (2,624,428 ) 58 Selected Consolidation Schedule of Balance Sheet As of March 31, 2023 Parent and Hong Kong WFOE VIE Elimination and Reclassification Consolidated Cash $ 632,540 $ 177,420 $ 16,558,518 $ - 17,368,478 Intercompany receivables 2,244,727 2,943,477 - (5,188,204 ) - Total Current Assets 3,031,436 3,170,114 18,507,901 (5,188,204 ) 19,521,247 Investment in Subsidiaries 7,939,957 - - (7,939,957 ) - Total Non-current Assets 7,939,957 - 10,032,809 (7,939,957 ) 10,032,809 Intercompany payables - - 5,188,204 (5,188,204 ) - Total Liabilities 3,667,315 102,656 16,280,994 (5,188,204 ) 14,862,761 Total Shareholders’ Equity 7,304,078 3,067,458 12,259,716 (7,939,957 ) 14,691,295 Selected Consolidation Schedule of Operations and Comprehensive Loss For the year ended March 31, 2023 Parent and Hong Kong WFOE VIE Elimination and Reclassification Consolidated Revenues $ - $ - $ 1,971,679 $ - 1,971,679 Cost of revenues - - (1,545,408 ) - (1,545,408 ) Gross profit - - 426,271 - 426,271 Total operating expenses (2,889,348 ) (525 ) (3,143,907 ) - (6,033,780 ) Loss from operations (2,889,348 ) (525 ) (2,717,636 ) - (5,607,509 ) Net loss (3,357,186 ) (628 ) (2,576,958 ) - (5,934,772 ) Total Comprehensive Loss (3,357,186 ) (628 ) (3,730,671 ) - (7,088,485 ) Selected Consolidation Schedule of Cash Flows For the year ended March 31, 2023 Parent and Hong Kong WFOE VIE Elimination and Reclassification Consolidated Net cash (used in) provided by operating activities $ (483,882 ) $ (15,525 ) $ 418,650 $ - (80,757 ) Net cash used in investing activities - - (12,303 ) - (12,303 ) Net cash (used in) provided by financing activities (189,945 ) 192,629 2,938,918 - 2,941,602 As of the date of this annual report, we have financed our operations primarily through shareholder capital contributions, and mainly cash used on operating activities.
Selected Consolidation Schedule of Balance Sheet As of March 31, 2025 Parent and Hong Kong WFOE VIE Elimination and Reclassification Consolidated Cash, cash equivalents and restricted cash $ 231,557 $ 1,058 $ 17,896,817 $ - $ 18,129,432 Intercompany receivables 2,393,545 4,050,080 - (6,443,625 ) - Total Current Assets 4,375,580 4,339,427 19,025,109 (6,443,625 ) 21,296,491 Investment in Subsidiaries 9,010,734 - - (9,010,734 ) - Total Non-current Assets 9,010,734 - 367,017 (9,010,734 ) 367,017 Intercompany payables - - 6,443,625 (6,443,625 ) - Total Liabilities 410,433 178,589 12,078,349 (6,443,625 ) 6,223,746 Total Shareholders’ Equity 12,975,881 4,160,838 7,313,777 (9,010,734 ) 15,439,762 Selected Consolidation Schedule of Operations and Comprehensive Loss For the year ended March 31, 2025 Parent and Hong Kong WFOE VIE Elimination and Reclassification Consolidated Revenues $ - $ 38,264 $ 1,702,643 $ - $ 1,740,907 Cost of revenues - (19,044 ) (1,354,436 ) - (1,373,480 ) Gross profit - 19,220 348,207 - 367,427 Total operating expenses (579,713 ) (3,745 ) (2,464,448 ) - (3,047,906 ) Loss from operations (579,713 ) (3,745 ) (2,097,021 ) - (2,680,479 ) Net (loss) income (1,209,263 ) 130,378 (2,224,767 ) - (3,303,652 ) Total Comprehensive Loss (1,209,263 ) 130,378 (2,274,494 ) - (3,353,379 ) Selected Consolidation Schedule of Cash Flows For the year ended March 31, 2025 Parent and Hong Kong WFOE VIE Elimination and Reclassification Consolidated Net cash used in operating activities $ (436,238 ) $ (299,847 ) $ (1,609,248 ) $ - $ (2,345,333 ) Net cash provided by investing activities - - 63,516 - 63,516 Net cash provided by financing activities 7,949,554 297,851 151,748 - 8,399,153 57 Selected Consolidation Schedule of Balance Sheet As of March 31, 2024 Parent and Hong Kong WFOE VIE Elimination and Reclassification Consolidated Cash, cash equivalents and restricted cash $ 487,787 $ 3,058 $ 11,586,342 $ - $ 12,077,187 Intercompany receivables 2,359,863 3,592,064 - (5,951,927 ) - Total Current Assets 2,859,319 3,627,210 13,698,757 (5,951,927 ) 14,233,359 Investment in Subsidiaries 8,430,742 - - (8,430,742 ) - Total Non-current Assets 8,430,742 - 8,893,698 (8,430,742 ) 8,893,698 Intercompany payables - - 5,951,927 (5,951,927 ) - Total Liabilities 2,117,612 178,589 12,852,337 (5,951,927 ) 9,196,611 Total Shareholders’ Equity 9,172,449 3,448,621 9,740,118 (8,430,742 ) 13,930,446 Selected Consolidation Schedule of Operations and Comprehensive Loss For the year ended March 31, 2024 Parent and Hong Kong WFOE VIE Elimination and Reclassification Consolidated Revenues $ - $ 13,150 $ 1,915,347 $ - $ 1,928,497 Cost of revenues - (9,167 ) (1,365,359 ) - (1,374,526 ) Gross profit - 3,983 549,988 - 553,971 Total operating expenses (621,878 ) (29,977 ) (2,417,333 ) - (3,069,188 ) Loss from operations (621,878 ) (25,994 ) (1,867,345 ) - (2,515,217 ) Net loss (1,147,536 ) (108,498 ) (1,842,498 ) - (3,098,532 ) Total Comprehensive Loss (1,147,536 ) (108,498 ) (2,670,722 ) - (3,926,756 ) Selected Consolidation Schedule of Cash Flows For the year ended March 31, 2024 Parent and Hong Kong WFOE VIE Elimination and Reclassification Consolidated Net cash (used in) provided by operating activities $ (738,154 ) $ 53,990 $ (1,243,891 ) $ - $ (1,928,053 ) Net cash provided by investing activities - - 26,423 - 26,423 Net cash provided by (used in) financing activities 577,422 (220,917 ) (2,980,933 ) - (2,624,428 ) As of the date of this annual report, we have financed our operations primarily through shareholder capital contributions, and mainly cash used on operating activities.
For the year ended March 31, 2023, net cash used in operating activities was $80,757, as compared to net cash provided by operating activities of $268,293 for the year ended March 31, 2022, representing a decrease in cash inflow of $349,050.
For the year ended March 31, 2024, net cash used in operating activities was $1,928,053, as compared to net cash used in operating activities of $80,757 for the year ended March 31, 2023, representing an increase in cash outflow of $1,847,296.
As the market demand for our products has declined for several years, we sold some of the raw medicinal materials to increase our sales and revitalize our current assets. Gross Profit Cost of revenues primarily includes cost of materials, direct labors, overhead, and other related incidental expenses that are directly attributable to the Company’s principal operations.
For the year ended March 31, 2024, the Company generated of $24,166 from sales of raw medicinal materials. Cost of Revenues Cost of revenues primarily includes cost of materials, direct labors, overhead, and other related incidental expenses that are directly attributable to the Company’s principal operations.
Liquidity and Capital Resources Consolidation The Company provides all of its products in China via the VIE of the Company, due to PRC legal restrictions of foreign ownership on certain sectors. WFOE, shareholders of Taizhou Suxuantang and Taizhou Suxuantang entered into a series of contractual arrangements, also known as VIE Agreements, on October 13, 2017.
The decrease in net loss was mainly due to the increase in gross profit and decrease in operating expenses. Liquidity and Capital Resources Consolidation The Company provides all of its products in China via the VIE of the Company, due to PRC legal restrictions of foreign ownership on certain sectors.
As compared with the year ended March 31, 2022, our revenue from TCMHS products decreased by $245,959, or 100% for the year ended March 31, 2023. The decrease was primarily due to the unfavorable condition of the market.
As compared with the year ended March 31, 2024, our revenue from Advanced TCMP decreased by $687,599, or 73%, for the year ended March 31, 2025. The decrease was primarily the decreased market demand for our Regular TCMP.
Selling Expenses Selling expenses primarily consisted of sales staff payroll and welfare expenses, travelling expenses, advertisement expenses, distribution expenses. The selling expenses decreased from $924,538 for the year ended March 31, 2022 to $387,452 for the year ended March 31, 2023, representing a decrease of $537,086, or 58%.
Selling and Marketing Expenses Selling and marketing expenses primarily consisted of sales staff payroll and welfare expenses, travelling expenses, market development and advertising fees, distribution and promotion expenses. The selling and marketing expenses increased from $433,566 for the year ended March 31, 2024 to $289,859 for the year ended March 31, 2025, representing an decrease of $143,707, or 33%.
Other income for the year ended March 31, 2023 mainly consisted of other non-operating income of $156,914 and other non-operating expenses of $7,401. Other expenses for the year ended March 31, 2022 mainly consisted of other non-operating income of $164,013 and other non-operating expenses of $345,593.
Other expenses for the year ended March 31, 2025 mainly consisted of other non-operating income of $193,639 and other non-operating expenses of $166,628. Other expenses for the year ended March 31, 2024 mainly consisted of other non-operating income of $53,853 and other non-operating expenses of $109,740.
Interest expenses, net for the year ended March 31, 2022 mainly consisted of accretion of finance cost and interest expense related to the Convertible Note we issued on March 16, 2022. For the year ended March 31, 2022, the Company recorded amortization of issuance cost and debt discount of $29,926 and interest expense of $7,020 for the Convertible Notes.
For the year ended March 31, 2024, we recorded amortization of issuance cost and debt discount of $292,771 and interest expenses of $231,583 for the Convertible Notes. For the year ended March 31, 2024, we recorded interest expenses of $29,022 for the other borrowings from banks and individuals.
The general and administrative expenses increased from $5,516,778 for the year ended March 31, 2022 to $5,646,328 for the year ended March 31, 2023, representing a slight increase of $129,550, or 2%.
For the year ended March 31, 2025, general and administrative expenses increased $122,425, or 5%, compared to the year ended March 31, 2024.
For the year ended March 31, 2022, the change in refund liabilities was $0.36 million net cash outflow, which led to a $0.36 million decrease in net cash outflow from operating activities. f) Change in contract liabilities was $0.09 million net cash inflow for the year ended March 31, 2023.
For the year ended March 31, 2023, the change in refund liabilities was $1,380 net cash outflow, which led to a $0.11 million increase in net cash inflow from operating activities. 59 Cash Flow in Investing Activities We had net cash provided by investing activities of $63,516 for the year ended March 31, 2025, which primarily consisted of cash received from disposal of property, plant and equipment of $65,539, offset by cash paid for purchase of property, plant and equipment of $2,023.
Gross profit decreased by $825,372, or 66%, to $ 426,271 for the year ended March 31, 2023 from $1,251,643 for the year ended March 31, 2022. Gross margin was 21.6% for the year ended March 31, 2023, compared to 48.1% for the year ended March 31, 2022.
Gross margin was 21.1% for the year ended March 31, 2025, compared to 28.7% for the year ended March 31, 2024.
The decrease in selling expenses was mainly due to lower marketing and advertising expenses and shipping and handling expenses, resulting from the decline in our revenues.
The decrease in selling and marketing expenses was mainly due to the decrease market development and advertising fee from $327,208 for the year ended March 31, 2024 to $108,822 for the year ended March 31, 2025.
Total cost of revenue increased by $194,770, or 14%, to $1,545,408 for the year ended March 31, 2023 from $1,350,638 for the year ended March 31, 2022.
Revenue from Regular TCMP products increased by $497,466, or 53%, to $1,442,466 for the year ended March 31, 2025 from $945,000 for the year ended March 31, 2024.
Revenue from Fine TCMP accounted for 6% and 15% of the revenue recognized during the years ended March 31, 2023 and 2022. As compared with the year ended March 31, 2022, our revenue from Fine TCMP decreased by $284,976, or 71% for the year ended March 31, 2023.
As compared with the year ended March 31, 2024, our total revenues decreased by $187,590, or 10%, for the year ended March 31, 2025.
The significant decrease in our gross margin is mainly due to the decrease in our sales of products affected by the continuous lockdown in China for the year ended March 31, 2023, the decrease in sales price of our LuXuejing product, the low gross margin of raw medicinal materials, and the increase in purchasing prices of our raw materials.
The decrease in our gross margin is mainly due to the following reasons: (i) the sales in our Advanced TCMP products decreased significantly for the year ended March 31, 2025 compared to the year ended March 31, 2024, and Advanced TCMP products have relatively high margin; (ii) the sales of Regular TCMP products, which have low margin, accounted for higher portion of our total revenue for the year ended March 31, 2025 compared to the year ended March 31, 2024.
Net Loss As a result of the foregoing, net loss for the year ended March 31, 2023 was $5,934,772, representing a slight increase of $198,677, or 3%, from net loss of $5,736,095 for the year ended March 31, 2022. The increase in net loss was mainly due to the decrease in our revenues and gross profit.
Deferred income tax expenses for the years ended March 31, 2025 and 2024 were Nil and Nil, respectively. Net Loss As a result of the foregoing, net loss for the year ended March 31, 2025 was $3,303,652, representing an increase of $205,120, or 7%, from net loss of $3,098,532, for the year ended March 31, 2024.
Removed
Results of Operations for the Year Ended March 31, 2023 Compared to the Year Ended March 31, 2022 For the Years Ended March 31, Change 2023 2022 Amount % Revenues $ 1,971,679 $ 2,602,281 $ (630,602 ) (24 ) Cost of revenues (1,545,408 ) (1,350,638 ) (194,770 ) 14 Gross profit 426,271 1,251,643 (825,372 ) (66 ) Selling expenses (387,452 ) (924,538 ) 537,086 (58 ) General and administrative expenses (5,646,328 ) (5,516,778 ) (129,550 ) 2 Total operating expenses (6,033,780 ) (6,441,316 ) 407,536 (6 ) Loss from operations (5,607,509 ) (5,189,673 ) (417,836 ) 8 Interest expense, net (476,776 ) (36,695 ) (440,081 ) 1,199 Other income (expenses), net 149,513 (181,581 ) 331,094 (182 ) Total other expenses, net (327,263 ) (218,276 ) (108,987 ) 50 Loss before income taxes expense (5,934,772 ) (5,407,949 ) (526,823 ) 10 Income tax expenses - 328,146 328,146 (100 ) Net Loss $ (5,934,772 ) $ (5,736,095 ) $ (198,677 ) 3 54 Revenues We generated revenues primarily from manufacture and sales of three types of TCMP products: Advanced TCMP, Fine TCMP, Regular TCMP, TCMHS products and raw medicinal materials.
Added
Results of Operations for the Year Ended March 31, 2025 Compared to the Year Ended March 31, 2024 For the Years Ended March 31, Change 2025 2024 Amount % Revenues $ 1,740,907 $ 1,928,497 $ (187,590 ) (10 ) Cost of revenues (1,373,480 ) (1,374,526 ) 1,046 (0 ) Gross profit 367,427 553,971 (186,544 ) (34 ) Selling and marketing expenses (289,859 ) (433,566 ) 143,707 (33 ) General and administrative expenses (2,758,047 ) (2,635,622 ) (122,425 ) 5 Total operating expenses (3,047,906 ) (3,069,188 ) 21,282 (1 ) Loss from operations (2,680,479 ) (2,515,217 ) (165,262 ) 7 Interest expense, net (648,221 ) (544,279 ) (103,942 ) 19 Other (expenses) income, net 25,048 (39,036 ) 64,084 (164 ) Total other expenses, net (623,173 ) (583,315 ) (39,858 ) 7 Loss before income taxes expense (3,303,652 ) (3,098,532 ) (205,120 ) 7 Income tax expenses - - - - Net Loss $ (3,303,652 ) $ (3,098,532 ) $ (205,120 ) 7 50 Revenues We generated revenues primarily from manufacture and sales of the following products: three types of TCMP products, consisting of Advanced TCMP, Fine TCMP and Regular TCMP, and raw medicinal materials and others.
Removed
TCMHS is a classification of health-supporting food used traditionally in China as TCM but which are also consumed as food. As compared with the year ended March 31, 2022, our total revenues decreased by $630,602, or 24%, for the year ended March 31, 2023.
Added
The following table sets forth the breakdown of revenues by revenue source for each period presented: For the Years Ended March 31, Change 2025 2024 Amount % Advanced TCMP $ 258,416 946,015 $ (687,599 ) (73 ) Regular TCMP 1,442,466 945,000 497,466 53 Others 40,025 37,482 2,543 7 Total revenues $ 1,740,907 $ 1,928,497 $ (187,590 ) (10 ) Advanced TCMP Advanced TCMP is comprised of seven Directly-Oral-TCMP products and four After-Soaking-Oral-TCMP products.
Removed
The decrease was primarily due to the effect of the continuous lockdown for COVID-19 during the calendar year of 2023.
Added
The increase in revenue from Regular TCMP products is due to the increased market demand for our Regular TCMP during the year ended March 31, 2025. 51 Others For the years ended March 31, 2025 and 2024, we also generated revenue of $40,025 and $37,482, which represented 2% and 2% of our total revenue, respectively. or 7% For the year ended March 31, 2025, the Company generated of $38,264 from sales of a new health beverage product launched in 2024.
Removed
The following table sets forth the breakdown of revenues by revenue source for each period presented: For the Years Ended March 31, Change 2023 2022 Amount % Advanced TCMP $ 656,942 1,163,122 $ (506,180 ) (44 ) Fine TCMP 114,794 399,770 (284,976 ) (71 ) Regular TCMP 697,518 793,430 (95,912 ) (12 ) Raw medicinal materials 502,425 - 502,425 100 TCMHS - 245,959 (245,959 ) (100 ) Total revenues $ 1,971,679 $ 2,602,281 $ (630,602 ) (24 ) Advanced TCMP Advanced TCMP is comprised of seven Directly-Oral-TCMP and ten After-Soaking-Oral-TCMP.
Added
Total cost of revenue slightly decreased by $1,046, to $1,373,480 for the year ended March 31, 2025 from $1,374,526 for the year ended March 31, 2024. Gross Profit Gross profit decreased by $186,544, or 34%, to $ 367,427 for the year ended March 31, 2025 from $553,971 for the year ended March 31, 2024.
Removed
As compared with the year ended March 31, 2022, our revenue from Advanced TCMP decreased by $506,180, or 44%, for the year ended March 31, 2023. The decrease was primarily due to the continuous lockdown in China in the calendar year of 2022, which adversely affected the production and distribution of our products.
Added
General and administrative expenses of $2,758,047 for the year ended March 31, 2025 mainly consisted of payroll expenses of $273,580, professional fees of $643,053, credit loss for accounts receivable of $361,623 and impairment loss for long-term deposit of $1,006,052.
Removed
Additionally, as part of our marketing strategy to maintain our market share, we reduced the price of our Advanced TCMP products. Fine TCMP We produced over 10 Fine TCMP products for drug stores and hospitals. Our Fine TCMP products are manufactured manually from only high-quality authentic ingredients derived from their region of origin.
Added
General and administrative expenses of $2,635,622 for the year ended March 31, 2024 mainly consisted of payroll expenses of $828,341, professional fees of $617,365, credit loss for accounts receivable of $283,234, and impairment expense for property, plant and equipment of $422,924.
Removed
The decrease was primarily attributable to the continuous lockdown in China, which impacted the operation of pharmaceutical stores, the main sale channel for fine TCMP products. Additionally, our decided to discontinue cooperation with some clients in the sales of fine TCMP, as the purchase price of raw materials surged during the year ended March 31, 2023.
Added
The increase in our general and administrative expenses is mainly due to the following reasons: (i) credit loss for accounts receivable increased during the year ended March 31, 2025 compared to the year ended March 31, 2024; (ii) impairment loss for long-term deposit of $1,006,052 recorded during the year ended March 31, 2025. 52 Other Income (Expenses), Net Interest expenses, net for the year ended March 31, 2024 mainly consisted of accretion of finance cost and interest expense related to the Convertible Note we issued on December 19, 2022, December 13, 2023, March 27, 2024, May 9, 2024 and October 10, March 2024, and interest expenses from our borrowings from banks and various individuals.
Removed
Revenue from Regular TCMP products decreased by $95,912, or 12%, to $697,518 for the year ended March 31, 2023 from $793,430 for the year ended March 31, 2022. The decrease in revenue from Regular TCMP products is due to the continuous lockdown in China, which affected the production and distribution of our products.
Added
Cash Flow in Financing Activities For the year ended March 31, 2025, the net cash provided by financing activities was $8,399,153, which was primarily attributable to net proceeds from due to related parties of $5,839,277, net proceeds from the issuance of convertible notes of $1,460,000 (gross proceeds of $1,595,000 and debt issuance cost of $135,000), net proceeds from shares purchase agreements of $2,759,991 (gross proceeds of $2,840,000 and issuance cost of $80,009) and proceeds from borrowing from banks and individuals of $258,003, offset by repayment of borrowing of $78,118 and repayment of convertible notes of $1,840,000.
Removed
Additionally, the portion of revenue from Regular TCMP products of our total revenue also decreased because of our effort to start the new sales of raw medicinal materials during the year ended March 31, 2023. 55 TCMHS Solid Beverages Four solid beverage products as part of the Company’s TCMHS products were developed and commercially launched in April 2019 and generated revenue of $0 and $245,959 for the years ended March 31, 2023 and 2022, respectively.
Removed
For the year ended March 31, 2023, we decided to suspend our production and sales of TCMHS products and develop new product lines in the near future. Raw medicinal materials For the year ended March 31, 2023, we generated revenue from sales of raw medicinal materials of $502,425, which represented 25% of our total revenue.
Removed
The reason that cost of revenues did not decrease comparatively with the revenue was mainly because of the increase in the purchasing price of raw materials, and fixed costs such as the depreciation of our property, plant and equipment and direct labor cost.
Removed
For the years ended March 31, 2023 and 2022, the Company had abnormal capacity due to unexpected product demand reductions, and a partial of the fixed overhead was recorded in general and administrative expenses instead of in cost of revenues.
Removed
General and administrative expenses for the year ended March 31, 2023 mainly consisted of bad debt provision for accounts receivable of $820,352, bad debt provision for prepayment, receivable and other current assets of $474,342, bad debt provision for loan receivable and accrued interest of $1,581,000, and impairment expense for construction in progress of $349,390.
Removed
General and administrative expenses for the year ended March 31, 2022 mainly consisted of payroll expenses of $2,334,397 recorded related to the equity incentive plan and bad debt provision for accounts receivable of $477,299.
Removed
For the years ended March 31, 2023 and 2022, the Company had abnormal capacity due to unexpected product demand reductions, and fixed overhead of $157,028 and $67,096 were recorded in general and administrative expenses instead of in cost of revenues, respectively.
Removed
The current income tax expenses of Nil and Nil for the years ended March 31, 2023 and 2022 were mainly due to the loss before corporate income taxes of the Company and its subsidiaries and the VIE entity. Deferred income tax expenses for the years ended March 31, 2023 and 2022 were Nil and $328,146, respectively.
Removed
As of March 31, 2024 and 2023, $11,589,400 and $16,735,938 of cash and cash equivalents were denominated in RMB, respectively. 57 As of March 31, 2023, our VIE accounted for an aggregate of 97% and 75% of our total assets and total liabilities, respectively.
Removed
As of March 31, 2022, our VIE accounted for an aggregate of 85% and 85% of our total assets and total liabilities, respectively. As of March 31, 2023 and 2022, $16,735,938 and $14,217,855 of cash and cash equivalents were denominated in RMB, respectively.
Removed
For the year ended March 31, 2022, the change in contract liabilities was $0.19 million net cash outflow, which led to a $0.28 million increase in net cash inflow from operating activities. g) Change in accrued expenses and other current liabilities was $0.05 million net cash outflow for the year ended March 31, 2023.
Removed
For the year ended March 31, 2022, the change in accrued expenses and other current liabilities was $0.38 million net cash inflow, which led to a $0.43 million decrease in net cash inflow from operating activities.
Removed
We had net cash used in investing activities of $46,909 for the year ended March 31, 2022, which primarily consisted of purchase of property, plant and equipment of $60,932, capital expenditure in construction in process of $1,558, and cash received from Huangshan Panjie Investment Management Co., Ltd. of $15,581.
Removed
For the year ended March 31, 2022, the net cash provided by financing activities was $1,595,140, which was primarily attributable to net proceeds from the 2022 convertible note of $2,356,557 (gross proceeds of $2,804,848 and debt issuance cost of $448,291), and net proceeds from the 2022 public offering of $3,115,106, net by advances to related parties of $3,581,746, repayment to amounts due from related parties of $231,722, payment related to equity incentive plan of $30,000, and repayment of principal and interest of bank loans of $33,055. 61 Going Concern The accompanying consolidated financial statements for the years ended March 31, 2024 and 2023 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.
Removed
As reflected in the accompanying consolidated financial statements, we reported net losses of $3,098,532, $5,934,772, and $5,736,095 for the years ended March 31, 2024, 2023 and 2022, respectively. We had accumulated deficits of $24,711,665 and $21,613,133 as of March 31, 2024 and 2023, respectively.
Removed
We used funds in operating activities of $1,928,053 and $80,757 for the years ended March 31, 2024 and 2023, and generated funds in operating activities of $268,293 for the year ended March 31, 2022, respectively. In addition, we have suffered a continuous decline in revenue for the years ended March 31, 2024, 2023, and 2022.
Removed
These factors raise substantial doubt about our ability to continue as a going concern. We are in the process of building our customer base to generate more revenues as well as cutting expenses, and we are seeking to raise capital through additional debt from equity financings to fund our operations.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

40 edited+22 added−1 removed66 unchanged
We may terminate the employment for cause, at any time, without notice or remuneration, for certain acts of the executive officer, such as conviction or plea of guilty to a felony or grossly negligent or dishonest acts to our detriment, or misconduct or a failure to perform agreed duties.
We may terminate the employment for cause, at any time, without notice or remuneration, for certain acts of the executive officer, such as conviction or plea of guilty to a felony or grossly negligent or dishonest acts to our detriment, or misconduct or a failure to perform agreed duties.
In such case, the executive officer will not be entitled to receive payment of any severance benefits or other amounts by reason of the termination, and the executive officer’s right to all other benefits will terminate, except as required by any applicable law. We may also terminate an executive officer’s employment without cause upon one-month advance written notice.
In such case, the executive officer will not be entitled to receive payment of any severance benefits or other amounts by reason of the termination, and the executive officer’s right to all other benefits will terminate, except as required by any applicable law. We may also terminate an executive officer’s employment without cause upon one-month advance written notice.
The executive officer may terminate the employment at any time with a one-month advance written notice if there is any significant change in the executive officer’s duties and responsibilities or a material reduction in the executive officer’s annual salary.
The executive officer may terminate the employment at any time with a one-month advance written notice if there is any significant change in the executive officer’s duties and responsibilities or a material reduction in the executive officer’s annual salary.
The 2022 Reverse Split did not change the number of the Company’s authorized preferred and ordinary shares, which remain as unlimited. As a result of 2022 Reverse Split, the shareholders received one new ordinary share of the Company, par value $0.08 each, for every twenty (20) shares they hold.
The 2022 Reverse Split did not change the number of the Company’s authorized preferred and ordinary shares, which remain as unlimited. As a result of the 2022 Reverse Split, the shareholders received one new ordinary share of the Company, par value $0.08 each, for every twenty (20) shares they hold.
Board Diversity Matrix Country of Principal Executive Offices: China Foreign Private Issuer Yes Disclosure Prohibited under Home Country Law No Total Number of Directors 5 Female Male Non- Binary Did Not Disclose Gender Part I: Gender Identity Directors 0 5 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ+ 0 Did Not Disclose Demographic Background 0 The table below provides certain information regarding the diversity of our board of directors as of March 31, 2023.
Board Diversity Matrix Country of Principal Executive Offices: China Foreign Private Issuer Yes Disclosure Prohibited under Home Country Law No Total Number of Directors 5 Female Male Non- Binary Did Not Disclose Gender Part I: Gender Identity Directors 0 5 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ+ 0 Did Not Disclose Demographic Background 0 The table below provides certain information regarding the diversity of our board of directors as of March 31, 2025.
Feng Zhou is deemed to have the voting power and investment discretion over the shares held by Mr. Zhijun Xiao. 70 On May 10, 2022, the Company’s board of directors approved an amended and restated memorandum and articles of association to effectuate a one-for-twenty (1-for-20) reverse split for its ordinary shares (the “2022 Reverse Split”).
Feng Zhou is deemed to have the voting power and investment discretion over the shares held by Mr. Zhijun Xiao. 69 On May 10, 2022, the Company’s board of directors approved an amended and restated memorandum and articles of association to effectuate a one-for-twenty (1-for-20) reverse split for its ordinary shares (the “2022 Reverse Split”).
At each annual general meeting, each director so elected shall hold office for a one-year term and until the election of their respective successors in office or removed. 64 Board Diversity The table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.
At each annual general meeting, each director so elected shall hold office for a one-year term and until the election of their respective successors in office or removed. 63 Board Diversity The table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.
Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company or of any third party. 66 6.B.
Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company or of any third party. 65 6.B.
We will continue our search for a suitable candidate in order to increase the diversity of our board. 65 Family Relationships None of the directors or executive officers has a family relationship as defined in Item 401 of Regulation S-K.
We will continue our search for a suitable candidate in order to increase the diversity of our board. 64 Family Relationships None of the directors or executive officers has a family relationship as defined in Item 401 of Regulation S-K.
Code of Conduct and Ethics We adopted a code of conduct and ethics applicable to our directors, officers and employees in accordance with applicable federal securities laws and NASDAQ rules. 69 6.D. Employees See the section entitled “Employees” in Item 4 above. 6.E.
Code of Conduct and Ethics We adopted a code of conduct and ethics applicable to our directors, officers and employees in accordance with applicable federal securities laws and NASDAQ rules. 68 6.D. Employees See the section entitled “Employees” in Item 4 above. 6.E.
Compensation Summary Compensation Table The following table sets forth certain information with respect to compensation for the year ended March 31, 2024 earned by or paid to our directors and senior management.
Compensation Summary Compensation Table The following table sets forth certain information with respect to compensation for the year ended March 31, 2025 earned by or paid to our directors and senior management.
(iii) 65,032 Ordinary Shares that are subject to the voting agreement entered into between Feng Zhou, Haoxia and Zhijun Xiao, whose principal business address is No.41 Team Huangjiu, Liangxu Town, Jiangyan District, Taizhou City, Jiangsu Province, China, dated September 22, 2022, pursuant to which Mr. Zhijun Xiao irrevocably grants a power of attorney to, and entrust Mr. Zhou and Mr.
(iii) 8,129 Ordinary Shares that are subject to the voting agreement entered into between Feng Zhou, Haoxia and Zhijun Xiao, whose principal business address is No.41 Team Huangjiu, Liangxu Town, Jiangyan District, Taizhou City, Jiangsu Province, China, dated September 22, 2022, pursuant to which Mr. Zhijun Xiao irrevocably grants a power of attorney to, and entrust Mr. Zhou and Mr.
Feng Zhou through his wholly owned entity Feng Zhou Management Limited; (ii) 68,966 Ordinary Shares that are subject to the voting agreement entered into between Feng Zhou and Rising Sun Capital Ltd., a limited liability company organized under the laws of Australia, which is wholly-owned by Wei Shi.
Feng Zhou through his wholly owned entity Feng Zhou Management Limited; (ii) 8,621 Ordinary Shares that are subject to the voting agreement entered into between Feng Zhou and Rising Sun Capital Ltd., a limited liability company organized under the laws of Australia, which is wholly-owned by Wei Shi.
As of July 31, 2024, we did not have at least one diverse director because we have not yet identified a suitable candidate.
As of July 31, 2025, we did not have at least one diverse director because we have not yet identified a suitable candidate.
It is determined that Mr. Songfan He possesses accounting or related financial management experience that qualifies him as an “audit committee financial expert” as defined by the rules and regulations of the SEC. Compensation Committee Mr. Tong Liu, Mr. Songfan He, and Mr. Xiaodong Ji are members of our Compensation Committee and Mr. Tong Liu is the chairman.
It is determined that Mr. Yong Lip Chee possesses accounting or related financial management experience that qualifies him as an “audit committee financial expert” as defined by the rules and regulations of the SEC. Compensation Committee Mr. Tong Liu, Mr. Yong Lip Chee, and Mr. Xiaodong Ji are members of our Compensation Committee and Mr. Tong Liu is the chairman.
On May 9, 2024, China SXT Pharmaceuticals, Inc., a British Virgin Islands company (the “Company”) entered into a securities purchase agreement (the “May 2024 Purchase Agreement”) with Streeterville Capital, LLC, a Utah limited liability company (the “Investor”), pursuant to which the Company issued the Investor an unsecured promissory note on May 9, 2024 in the original principal amount of $797,500.00 (the “May 2024 Note”), convertible into ordinary shares, $0.08 par value per share, of the Company (the “Ordinary Shares”), for $750,000.00 in gross proceeds.
On May 9, 2024, the Company entered into a securities purchase agreement (the “May 2024 Purchase Agreement”) with Streeterville Capital, LLC, a Utah limited liability company (the “Investor”), pursuant to which the Company issued the Investor an unsecured promissory note on May 9, 2024 in the original principal amount of $797,500.00 (the “May 2024 Note”), convertible into ordinary shares, $0.08 par value per share, of the Company (the “Ordinary Shares”), for $750,000.00 in gross proceeds.
Tong Liu and Mr. Xiaodong Ji are members of our Audit Committee, where Mr. Songfan He, serves as the chairman. All members of our Audit Committee satisfy the independence standards promulgated by the SEC and by NASDAQ as such standards apply specifically to members of audit committees.
Tong Liu and Mr. Xiaodong Ji are members of our Audit Committee, where Mr. Yong Lip Chee, serves as the chairman. All members of our Audit Committee satisfy the independence standards promulgated by the SEC and by NASDAQ as such standards apply specifically to members of audit committees.
Feng Zhou has been our CEO and director since July 4, 2017. He was the CEO of Taizhou Suxuantang, the VIE Entity from May 2017 to February, 2018. From January 2015 to May 2017, he was the vice manager of Taizhou Suxuantang.
Feng Zhou has been our CEO and director since July 4, 2017 and was changed to Co-CEO on January 20, 2025. He was the CEO of Taizhou Suxuantang, the VIE Entity from May 2017 to February, 2018. From January 2015 to May 2017, he was the vice manager of Taizhou Suxuantang.
On March 27, 2024, the Company entered into a securities purchase agreement (the “ March 2024 Purchase Agreement ”) with the Investor, pursuant to which the Company issued the Investor an unsecured promissory note on March 27, 2024 in the original principal amount of $531,666.67 (the “ March 2024 Note ”), convertible into Ordinary Shares of the Company, for $500,000.00 in gross proceeds.
The Company will not receive proceeds from the sale of the underlying Ordinary Shares. 70 On March 27, 2024, the Company entered into a securities purchase agreement (the “ March 2024 Purchase Agreement ”) with the Investor, pursuant to which the Company issued the Investor an unsecured promissory note on March 27, 2024 in the original principal amount of $531,666.67 (the “ March 2024 Note ”), convertible into Ordinary Shares of the Company, for $500,000.00 in gross proceeds.
There are no other arrangements or understandings pursuant to which our directors are selected or nominated. 68 Committees of the Board of Directors We established an audit committee, a compensation committee and a nominating and governance committee. Each of the committees of the Board have the composition and responsibilities described below. Audit Committee Mr. Songfan He, Mr.
There are no other arrangements or understandings pursuant to which our directors are selected or nominated. 67 Committees of the Board of Directors We established an audit committee, a compensation committee and a nominating and governance committee. Each of the committees of the Board have the composition and responsibilities described below. Audit Committee Mr. Yong Lip Chee, Mr.
Songfan He are the members of our Nominating and Governance Committee where Mr. Xiaodong Ji serves as the chairman. All members of our Nominating and Governance Committee are qualified as independent under the current definition promulgated by NASDAQ.
Yong Lip Chee are the members of our Nominating and Governance Committee where Mr. Xiaodong Ji serves as the chairman. All members of our Nominating and Governance Committee are qualified as independent under the current definition promulgated by NASDAQ.
Name and Principal Position Salary ($) Bonus ($) Stock Awards ($) Option Awards ($) Non-Equity Incentive Plan Compensation Deferred Compensation Earnings Other Total ($) Feng Zhou, CEO and Director 50,000 - - - - - - 50,000 Xiaodong Pan, CFO (1) 50,000 - - - - - - 50,000 Junsong Li, Former Independent Director (2) - - - - - - - - Wenwei Fan, Former Independent Director (3) - - - - - - - - Jun Zheng, Director - - - - - - - - Tong Liu, Independent Director (4) - - - - - - - - Xiaodong Ji, Independent Director - - - - - - - - Songfan He, Independent Director (5) - - - - - - - - (1) Xiaodong Pan assumed his position of CFO of the Company on January 31, 2022.
Name and Principal Position Salary ($) Bonus ($) Stock Awards ($) Option Awards ($) Non-Equity Incentive Plan Compensation Deferred Compensation Earnings Other Total ($) Feng Zhou, Co-CEO and Director 50,000 - - - - - - 50,000 Simon Lim Sze Beng, Co-CEO (1) Xiaodong Pan, CFO (2) 50,000 - - - - - - 50,000 Junsong Li, Former Independent Director (3) - - - - - - - - Jun Zheng, Director - - - - - - - - Tong Liu, Independent Director (4) - - - - - - - - Xiaodong Ji, Independent Director - - - - - - - - Songfan He, Independent Director (5) - - - - - - - - Yong Lip Chee, Independent Director (6) (1) Simon Lim Sze Beng assumed his position of Co-CEO of the Company on January 20, 2025 (2) Xiaodong Pan assumed his position of CFO of the Company on January 31, 2022.
Ordinary Shares are issuable upon conversion of the December 2023 Note which are currently held by Streeterville. The shares issuable upon conversion of the December 2023 Note may be offered for sale from time to time by Streeterville. The Company will not receive proceeds from the sale of the underlying Ordinary Shares.
Ordinary Shares are issuable upon conversion of the December 2023 Note which are currently held by Streeterville. The shares issuable upon conversion of the December 2023 Note may be offered for sale from time to time by Streeterville.
A copy of the incentive plan was filed as Exhibit 4.7 to this annual report. 72
A copy of the incentive plan was filed as Exhibit 4.8 to this annual report. 71
As of the date of this annual report, Mr. Feng Zhou is entitled to an aggregate of 138,203 with shared voting power, includes (i) 4,205 Ordinary Shares solely held by Mr.
As of the date of this annual report, Mr. Feng Zhou is entitled to an aggregate of 17,282 with shared voting power, includes (i) 532 Ordinary Shares solely held by Mr.
(2) Junsong Li resigned from his position of director of the Company on May 9, 2022 (3) Wenwei Fan resigned from his position of director of the Company on May 9, 2022 (4) Tong Liu assumed his position of director of the Company on May 10, 2022 (5) Songfan He assumed his position of director of the Company on May 10, 2022 67 Agreements with Named Executive Officers On December 30, 2017, we entered into an employment agreement with our CEO, Mr.
(3) Junsong Li resigned from his position of director of the Company on May 9, 2022 (4) Tong Liu assumed his position of director of the Company on May 10, 2022 (5) Songfan He assumed his position of director of the Company on May 10, 2022 and resigned from his position of director of the Company on January 20, 2025 (6) Yong Lip Chee assumed his position of director of the Company on January 20, 2025 66 Agreements with Named Executive Officers On December 30, 2017, we entered into an employment agreement with our CEO, Mr.
Ji was in charge of the strategic planning and ecological chain construction of Shopping Mall, which is a world shopping mall system under the Belt and Road Initiative. Mr. Ji earned his bachelor degree from Beijing University of Chinese Medicine. Mr. Songfan He was appointed as our independent director on May 10, 2022.
Ji was in charge of the strategic planning and ecological chain construction of Shopping Mall, which is a world shopping mall system under the Belt and Road Initiative. Mr. Ji earned his bachelor degree from Beijing University of Chinese Medicine. Mr.
Ordinary Shares Beneficially Owned As of June 20, 2024 Number Percent Directors and Executive Officers: Feng Zhou (1) 138,203 4.47 % Xiaodong Pan - - Jun Zheng - - Tong Liu - - Xiaodong Ji - - Songfan He - - All directors and executive officers as a group (6 persons) 138,203 4.47 % 5% shareholder: - - - Total share outstanding 138,203 4.47 % (1) Feng Zhou is the 100% owner of Feng Zhou Management Limited and therefore shall be deemed as the beneficial owner of shares held by such entity.
Ordinary Shares Beneficially Owned As of July 23, 2025 Number Percent Directors and Executive Officers: Feng Zhou (1) 532 - % Xiaodong Pan - - Jun Zheng - - Tong Liu - - Xiaodong Ji - - Yong Lip Chee - - All directors and executive officers as a group (6 persons) 532 - % 5% shareholder: - - - Total share outstanding 532 - % (1) Feng Zhou is the 100% owner of Feng Zhou Management Limited and therefore shall be deemed as the beneficial owner of shares held by such entity.
Share Ownership The following table sets forth information with respect to the beneficial ownership of our equity shares as of June 20, 2024 by each director and our senior management executives. There were 3,092,994 Ordinary Shares issued and outstanding as of June 20, 2024.
Share Ownership The following table sets forth information with respect to the beneficial ownership of our equity shares as of July 23, 2025 by each director and our senior management executives. There were 116,027,758 Ordinary Shares issued and outstanding as of July 23, 2025.
A copy of the incentive plan was filed as Exhibit 4.6 to this annual report. 2022 Equity Incentive Plan On March 15, 2022, the board of directors adopted an equity incentive plan for our employees, directors and consultants (the “2022 Plan”).
As of the date of this annual report, we have issued 185,316 Ordinary Shares available under such plan. A copy of the incentive plan was filed as Exhibit 4.7 to this annual report. 2022 Equity Incentive Plan On March 15, 2022, the board of directors adopted an equity incentive plan for our employees, directors and consultants (the “2022 Plan”).
Each shareholder was entitled to receive one ordinary share in lieu of the fractional share that would have resulted from the reverse stock split. 71 On December 13, 2023, the Company entered into a securities purchase agreement (the “ December 2023 Purchase Agreement ”) with Streeterville Capital, LLC (the “Investor”) , pursuant to which the Company issued the Investor an unsecured promissory note on December 13, 2023 in the original principal amount of $531,666.67 (the “ December 2023 Note ” ) convertible into Ordinary Shares, for $500,000.00 in gross proceeds.
On December 13, 2023, the Company entered into a securities purchase agreement (the “December 2023 Purchase Agreement ”) with Streeterville Capital, LLC (the “Investor”) , pursuant to which the Company issued the Investor an unsecured promissory note on December 13, 2023 in the original principal amount of $531,666.67 (the “ December 2023 Note ” ) convertible into Ordinary Shares, for $500,000.00 in gross proceeds.
In such case, the executive officer will be entitled to receive compensation equivalent to 12 months of the executive officer’s base salary. On January 31, 2022, we entered into an employment agreement with our CFO, Mr. Xiaodong Pan, pursuant to which he shall receive an annual base salary of $50,000 Under his employment agreement, Mr.
In such case, the executive officer will be entitled to receive compensation equivalent to 12 months of the executive officer’s base salary. On January 20, 2025 we entered into an employment agreement with our Co-CEO, Mr. Simon Lim Sze Beng, pursuant to which he receive an annual base salary of $50,000 Under this employment agreement, Mr.
Name Age Position(s) Feng Zhou 33 Chief Executive Officer and Director Xiaodong Pan 47 Chief Financial Officer Jun Zheng 48 Director Tong Liu 46 Independent Director Xiaodong Ji 55 Independent Director Songfan He 52 Independent Director The following is a brief biography of each of our executive officers and directors: Executive Officers: Mr.
Name Age Position(s) Feng Zhou 34 Co-Chief Executive Officer and Director Simon Lim Sze Beng 49 Co- Chief Executive Officer Xiaodong Pan 48 Chief Financial Officer Jun Zheng 49 Director Tong Liu 47 Independent Director Xiaodong Ji 56 Independent Director Yong Lip Chee 37 Independent Director The following is a brief biography of each of our executive officers and directors: Executive Officers: Mr.
Zheng was a sales area manager at Jiangxi Bo Shi Da Pharmaceutical Co., Ltd. from 1999 to 2004, and a department manager and deputy general manager at Taizhou Jiutian Pharmaceutical Co., Ltd. from the 2005 to 2012. Mr.
Jun Zheng has been appointed as our director upon closing of our IPO on December 31, 2018. Mr. Zheng was a sales area manager at Jiangxi Bo Shi Da Pharmaceutical Co., Ltd. from 1999 to 2004, and a department manager and deputy general manager at Taizhou Jiutian Pharmaceutical Co., Ltd. from the 2005 to 2012. Mr.
He has served as the Finance Director of Jiangsu Suxuantang Pharmaceutical Co., Ltd., the consolidated variable interests entity of the Company in China, since March 2015. Prior to that, Mr. Pan was the Financial Director of Taizhou Jieda Concrete Co., Ltd. from January 2007 to March 2015. Mr.
He earned a bachelor’s degree in arts from Universiti Malaya in Malaysia in 2001. Mr. Xiaodong Pan was appointed as our Chief Financial Officer on January 31, 2022. He has served as the Finance Director of Jiangsu Suxuantang Pharmaceutical Co., Ltd., the consolidated variable interests entity of the Company in China, since March 2015. Prior to that, Mr.
He graduated from Xuzhou Medical College in Clinical Medicine in 1996, graduated from China Yantai College of Traditional Chinese Medicine in Clinical Medicine in 2011. Pursuant to our articles of association as amended, the minimum number of directors shall consist of not less than one person unless otherwise determined by the shareholders in a general meeting.
He earned a bachelor’s degree in business administration from University Malaya in Malaysia in 2013. Pursuant to our articles of association as amended, the minimum number of directors shall consist of not less than one person unless otherwise determined by the shareholders in a general meeting.
Zhou should serve as a member of our board of directors due to the perspective and experience he brings as our founder, Chairman, and CEO, and as our largest and controlling shareholder. Mr. Xiaodong Pan was appointed as our Chief Financial Officer on January 31, 2022.
Zhou should serve as a member of our board of directors due to the perspective and experience he brings as our founder, Chairman, and CEO, and as our largest and controlling shareholder. Mr. Simon Lim Sze Beng was appointed as our Co-CEO on January 20, 2025. Mr. Simon Lim Sze Beng is an experienced professional in the healthcare sector.
Pan earned his Bachelor’s Degree in Accounting from Nanjing College of Economics in 2000, and obtained his Master’s Degree in Business Administration in 2021 from Nanjing Institute of Technology. 63 Non-Management Directors Mr. Jun Zheng has been appointed as our director upon closing of our IPO on December 31, 2018. Mr.
Pan was the Financial Director of Taizhou Jieda Concrete Co., Ltd. from January 2007 to March 2015. Mr. Pan earned his Bachelor’s Degree in Accounting from Nanjing College of Economics in 2000, and obtained his Master’s Degree in Business Administration in 2021 from Nanjing Institute of Technology. 62 Non-Management Directors Mr.
Under the 2024 Plan, there are 185,316 Ordinary Shares available for issuance. As of the date of this annual report, we have issued 185,316 Ordinary Shares available under such plan.
Equity Incentive Plans 2025 Equity Incentive Plan On March 21, 2025, the board of directors adopted an equity incentive plan for our employees, directors and consultants (the “2025 Plan”). Under the 2025 Plan, there are 2,064,490 Ordinary Shares available for issuance. As of the date of this annual report, we have issued 2,064,490 Ordinary Shares available under such plan.
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our Company. Equity Incentive Plans 2024 Equity Incentive Plan On January 24, 2024, the board of directors adopted an equity incentive plan for our employees, directors and consultants (the “2024 Plan”).
As of July 23, 2025, the Company’s total issued and outstanding number of shares were 116,027,758 Ordinary Shares. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our Company.
Removed
He has worked at Beijing Qitong International Institute of Traditional Chinese Medicine Science since 2017. He has served as the director of editorial board of “National Civil Servants’ Health Guide”. From August 1996 to December 2003, he worked at Fifth People’s Hospital of Xinyi City. Mr.
Added
Since 2019, he has served as a manager of Reform Medical Marketing Co., Limited, where he serves clients in medical, and healthcare sectors and promotes their products and services. From 2017 to 2019, he was the senior operations director at Axcel Digital, where he conducts multichannel promotion for healthcare sector clients.
Added
Yong Lip Chee was appointed as our independent director on January 20, 2025 to fill in the vacancies result from Mr. Songfan He’s resignation as our then independent director. Mr. Yong Lip Chee has a background in sales and client relations within the healthcare sector. Since 2021, Mr.
Added
Yong has been an independent sales consultant, advising healthcare companies on market penetration strategies and distributor partnerships. From 2017 to 2021, he served as a sales supervisor at Winner Medical Hong Kong, where he promotes medical consumables products to hospitals and private healthcare medical professionals and related users.
Added
In such case, the executive officer will be entitled to receive compensation equivalent to 12 months of the executive officer’s base salary. In connection with the appointment of Mr. Simon Lim Sze Beng as our Co-CEO, on January 20, 2025, the title of Mr. Zhou was changed from the CEO and Director to the Co-CEO and Director of the Company.
Added
On January 31, 2022, we entered into an employment agreement with our CFO, Mr. Xiaodong Pan, pursuant to which he shall receive an annual base salary of $50,000 Under his employment agreement, Mr.
Added
Beng is employed as our Co-CEO for a term of five years, which automatically renews for additional one year term unless previously terminated on three months written notice by either party.
Added
We may terminate the employment for cause, at any time, without notice or remuneration, for certain acts of the executive officer, such as conviction or plea of guilty to a felony or grossly negligent or dishonest acts to our detriment, or misconduct or a failure to perform agreed duties.
Added
In such case, the executive officer will not be entitled to receive payment of any severance benefits or other amounts by reason of the termination, and the executive officer’s right to all other benefits will terminate, except as required by any applicable law. We may also terminate an executive officer’s employment without cause upon one-month advance written notice.
Added
In such case of termination by us, we are required to provide compensation to the executive officer, including severance pay equal to 12 months of base salary.
Added
The executive officer may terminate the employment at any time with a one-month advance written notice if there is any significant change in the executive officer’s duties and responsibilities or a material reduction in the executive officer’s annual salary.
Added
Each shareholder was entitled to receive one ordinary share in lieu of the fractional share that would have resulted from the reverse stock split.
Added
On January 21, 2025, the Company entered into a securities purchase agreement to sell 14,200,000 ordinary shares at $0.20 per share in a PIPE offering (the “January 2025 PIPE”). Investors received warrants (the “January 2025 PIPE Warrants”) for 200% of their purchased shares.
Added
Separately, lenders who had provided a $1.84 million one-month loan on January 15, 2025, surrendered their repayment rights in exchange for PIPE shares through a January 21, 2025 surrender agreement. This transaction effectively converted the debt into equity as part of the January 2025 PIPE financing arrangement.
Added
On March 13, 2025, the Company entered into a warrant exchange agreement with holders of 28,400,000 January 2025 PIPE Warrants issued on January 21, 2025. These January 2025 PIPE Warrants, adjusted for a reverse stock split and reset, were exercisable for 1.52 ordinary shares each (totaling 43,134,871 shares at $0.66 per share).
Added
Under the agreement, the holders surrendered all 28,400,000 January 2025 PIPE Warrants for cancellation, and in exchange, the Company issued 11,225,000 ordinary shares to them. In addition, on February 25, 2025, the Company has further effectuated a one-for-eight (1:8) reverse split for its ordinary shares (the “2025 Reverse Split”).
Added
On September 29, 2023, the Company’s board of directors approved the elimination of par value for its ordinary shares, and thereafter, no par value is assigned to the ordinary shares.
Added
Accordingly, the reverse stock splits effected on October 5, 2023 and February 25, 2025 did not involve any change in par value for its ordinary shares, and as a result of the 2025 Reverse Split, the shareholders received one new ordinary share of the Company, no par value each, for every eight (8) shares they hold.
Added
On May 5, 2025, the Company entered into a securities purchase agreement with an investor, pursuant to which the Company agreed to sell and issue 200,000 Ordinary Shares, with no par value, of the Company for $100,000 in gross proceeds.
Added
On May 16, 2025, the Company entered into a securities purchase agreement with several investors, pursuant to which the Company agreed to sell and issue (i) 10,000,000 Ordinary Shares, with no par value, of the Company; and (ii) Ordinary Share purchase warrants to purchase up to 100,000,000 Ordinary Shares (the “May 2025 Warrants”); and (iii) up to 100,000,000 Ordinary Shares issuable upon exercise of the Warrants (the “Underlying Shares”).
Added
Each Ordinary Share is being sold together with two associated Warrants, each to purchase one Ordinary Share at a combined offering price of $0.51 per Ordinary Share and associated Warrants. From May 30 to June 2, 2025, certain investors (the “ Investors ”) have exercised their Warrants under the alternate cashless exercise provision.
Added
According to which, the Investors may exercise the Warrants in exchange for 0.9 times the number of Ordinary Shares they would receive upon a standard cash exercise. Accordingly, the Company has cancelled the Warrants that were exercisable into 100,000,000 ordinary shares, and issued a total of 90,000,000 Underlying Shares to such Investors.
Added
A copy of the incentive plan was filed as Exhibit 4.6 to this annual report. 2024 Equity Incentive Plan On January 24, 2024, the board of directors adopted an equity incentive plan for our employees, directors and consultants (the “2024 Plan”). Under the 2024 Plan, there are 185,316 Ordinary Shares available for issuance.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

11 edited+1 added−0 removed5 unchanged
As such, the Company expects no liabilities from the financial guarantee. Employment Agreements See Item 6.B “Agreements with Named Executive Officers.” 7.C. Interests of Experts and Counsel Not applicable. 74
As such, the Company expects no liabilities from the financial guarantee. Employment Agreements See Item 6.B “Agreements with Named Executive Officers.” 7.C. Interests of Experts and Counsel Not applicable. 73
On October 28, 2013, Taizhou Suxuantang signed a financial guarantee agreement with Fenlan Xu for JJianping Zhou in borrowing of $803,291 (equivalent of RMB 5,800,000) for an unlimited period. Taizhou Suxuantang is obliged to pay the amount if Jianping Zhou in default of the payment of principal and interests.
On October 28, 2013, Taizhou Suxuantang signed a financial guarantee agreement with Fenlan Xu for JJianping Zhou in borrowing of $799,261 (equivalent of RMB 5,800,000) for an unlimited period. Taizhou Suxuantang is obliged to pay the amount if Jianping Zhou in default of the payment of principal and interests.
For the years ended March 31, 2024, 2023 and 2022, the Company made repayments to related parties of $1,727,418, $2,197,555 and $231,722, respectively. For the years ended March 31, 2024, 2023 and 2022, non-cash settlement between balances of accounts receivable from related parties and due to related parties were $1,235,290, $1,263,993 and $Nil, respectively.
For the years ended March 31, 2025, 2024 and 2023, the Company made repayments to related parties of $Nil, $1,727,418 and $2,197,555, respectively. For the years ended March 31, 2025, 2024 and 2023, non-cash settlement between balances of accounts receivable from related parties and due to related parties were $Nil, $1,235,290 and $1,263,993, respectively.
Ltd. An entity controlled by Jianping Zhou Jiangsu Health Pharmaceutical Investment Co., Ltd. An entity controlled by Jianping Zhou Taizhou Su Xuan Tang Chinese Medicine Clinic An entity controlled by Jianping Zhou Taizhou Su Xuan Tang Chinese hospital Co., Ltd. An entity controlled by Jianping Zhou Jiangsu Sutaitang Online Commercial Co., Ltd.
An entity controlled by Jianping Zhou Taizhou Su Xuan Tang Chinese Medicine Clinic An entity controlled by Jianping Zhou Taizhou Su Xuan Tang Chinese hospital Co., Ltd. An entity controlled by Jianping Zhou Jiangsu Sutaitang Online Commercial Co., Ltd.
These related party transactions were conducted in the ordinary course of business of the Company. For the years ended March 31, 2024 2023 2022 Taizhou Su Xuan Tang Chinese Hospital Co. Ltd. 25,528 17,478 19,246 Taizhou Su Xuan Tang Chinese Medicine Clinic 2,232 11,533 16,658 Taizhou Jiutian Pharmaceutical Co.
These related party transactions were conducted in the ordinary course of business of the Company. For the years ended March 31, 2025 2024 2023 Taizhou Su Xuan Tang Chinese Hospital Co. Ltd. 1,621 25,528 17,478 Taizhou Su Xuan Tang Chinese Medicine Clinic 1,091 2,232 11,533 Taizhou Jiutian Pharmaceutical Co.
Ltd. - 4,610 138,275 Total revenue generated from related parties $ 27,760 $ 33,621 $ 174,179 73 2) Other related party transactions For the years ended March 31, 2024, 2023 and 2022, the Company made advances to related parties of $2,205,254, $628,911 and $3,581,746, respectively.
Ltd. 1,589 - 4,610 Total revenue generated from related parties $ 4,301 $ 27,760 $ 33,621 72 2) Other related party transactions For the years ended March 31, 2025, 2024 and 2023, the Company made advances to related parties of $Nil, $2,205,254 and $628,911, respectively.
For the years ended March 31, 2024, 2023 and 2022, the Company record operating lease expenses were $69,819, $73,034, and $77,968, respectively. Guarantee On April 12, 2021, Taizhou Suxuantang signed a financial guarantee agreement with Jiangsu Changjiang Commercial Bank for Taizhou Jiutian Pharmaceutical Co. Ltd. in borrowing of $387,796 (equivalent of RMB 2,800,000) for three-year period.
For the years ended March 31, 2025, 2024 and 2023, the Company record operating lease expenses were $69,343, $69,819, and $73,034, respectively. Guarantee On April 12, 2021, Taizhou Suxuantang signed a financial guarantee agreement with Jiangsu Changjiang Commercial Bank for Taizhou Jiutian Pharmaceutical Co.
Related Party Transactions Nature of relationships with related parties Name of related parties Relationship with the Company Feng Zhou Major shareholder of the Company, Chief Executive Officer Zhijun Xiao 5% shareholder for the year ended March 31, 2023 Jun Zheng Director of the Company Xiaodong Ji Independent Director of the Company Xiaodong Pan Chief Financial Officer Taizhou Jiutian Pharmaceutical Co.
Related Party Transactions Nature of relationships with related parties Name of related parties Relationship with the Company Feng Zhou Major shareholder of the Company, Chief Executive Officer Jun Zheng Director of the Company Xiaodong Ji Independent Director of the Company Jiangsu Health Pharmaceutical Investment Co., Ltd.
An entity controlled by Xiaodong Ji Related party balances The amounts due to related parties as of March 31, 2024 and 2023 were as follows: As of March 31, 2024 2023 Jiangsu Health Pharmaceutical Investment Co., Ltd. $ 1,047,550 $ 2,910,088 Feng Zhou - 1,823,679 Jiangsu Sutaitang Online Commercial Co., Ltd. - 320,202 Jun Zheng - 14,025 Xiaodong Pan - 73,110 Zhijun Xiao - 62,658 Total due to related parties $ 1,047,550 $ 5,203,762 Material Transactions with Related Parties 1) Revenues generated from related parties The company sells several TCMP products to related companies based on terms and conditions mutually agreed between the relevant parties.
An entity controlled by Xiaodong Ji Related party balances The amounts due from related parties as of March 31, 2025 and 2024 were as follows: As of March 31, 2025 2024 Jiangsu Sutaitang Online Commercial Co., Ltd. $ 370,862 $ - Taizhou Su Xuan Tang Chinese hospital Co., Ltd. 41,561 - Taizhou Su Xuan Tang Chinese Medicine Clinic 5,140 - Total due from related parties $ 417,563 $ - The amounts due to related parties as of March 31, 2025 and 2024 were as follows: As of March 31, 2025 2024 Jiangsu Health Pharmaceutical Investment Co., Ltd. $ - $ 1,047,550 Total due to related parties $ - $ 1,047,550 Material Transactions with Related Parties 1) Revenues generated from related parties The company sells several TCMP products to related companies based on terms and conditions mutually agreed between the relevant parties.
For the year ended March 31, 2023, the Company borrowed $94,647 from Jun Zheng, which is valid from January 18, 2023 to January 17, 2024 and bear interest of 6%.
For the year ended March 31, 2024, the Company borrowed $90,024 from Jun Zheng, which has no fixed term and bear interest of 6%.
For the years ended March 31, 2024, 2023 and 2022, non-cash settlement between balances of due from related parties and due to related parties were $6,080,971, $4,051,569 and $3,653,418, respectively. For the year ended March 31, 2024, the Company borrowed $90,024 from Jun Zheng, which has no fixed term and bear interest of 6%.
For the years ended March 31, 2025, 2024 and 2023, non-cash settlement between balances of due from related parties and due to related parties were $8,993,443, $6,080,971 and $4,051,569, respectively. For the year ended March 31, 2025, non-cash settlement between balances of long-term deposit and due to related parties was $7,267,770.
Added
Ltd. in borrowing of $387,796 (equivalent of RMB 2,800,000) for three-year period, which expires on April 11, 2024. On April 23, 2024, Taizhou Suxuantang signed a financial guarantee agreement with Jiangsu Changjiang Commercial Bank for Taizhou Jiutian Pharmaceutical Co. Ltd. in borrowing of $303,168 (equivalent of RMB 2,200,000) for three-year period, which expires on April 22, 2027.

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