{"url_path":"/sec/sxtc/10-k/2026/item-10","section_key":"item-10","section_title":"Item 10 ADDITIONAL INFORMATION","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-07-01","source_url":"https://www.sec.gov/Archives/edgar/data/1723980/0001213900-26-074310-index.html","accession_number":"0001213900-26-074310","cik":"0001723980","ticker":"SXTC","issuer_name":"China SXT Pharmaceuticals, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1723980/0001213900-26-074310-index.html","primary_entity_key":"0001723980","primary_entity_name":"China SXT Pharmaceuticals, Inc."},"word_count":22411,"has_tables":true,"body_markdown":"ITEM 10. ADDITIONAL INFORMATION\n\n \n\n10.A. Share Capital\n\n \n\nNot Applicable.\n\n \n\n10.B. Memorandum and Articles of Association\n\n \n\nWe are a BVI business company\nincorporated in the British Virgin Islands and our affairs are governed by the provisions of our Memorandum and Articles of Association,\nas amended and restated from time to time (“M&A”), and the BVI Business Companies Act, 2004 (the “BVI\nAct”), and the applicable laws of the BVI (including applicable common law).\n\n \n\nOur M&A authorizes us\nto issue unlimited shares consisting of Class A shares with no par value and Class B shares with no par value of the Company, no par\nvalue each. A copy of our M&A, effective on July 28, 2025, which was filed as Exhibit 1.6 to this annual report.\n\n \n\nOn September 11, 2023, the\nCompany’s board of directors approved an amended and restated memorandum and articles of association to effectuate a one-for-twenty-five\n(1-for-25) reverse split for its ordinary shares. The amended and restated memorandum and articles of association became effective on\nSeptember 29, 2023. The market effective date of 2023 Reverse Split was October 5, 2023, which was the first day when the Company’s\nordinary shares begin trading on a split-adjusted basis. The 2023 Reverse Split did not change the number of the Company’s authorized\npreferred and ordinary shares, which remain as unlimited. As a result of the 2023 Reverse Split, the shareholders received one new ordinary\nshare of the Company, no par value each, for every twenty-five (25) shares they hold. No fractional ordinary shares were issued to any\nshareholders in connection with the reverse stock split. Each shareholder was entitled to receive one ordinary share in lieu of the fractional\nshare that would have resulted from the reverse stock split. The share numbers in this annual report are all presented on a post-split\nbasis unless otherwise noted. Holders of Ordinary Shares are entitled to one vote per share. In addition, on February 25, 2025, the Company\nhas further effectuated a one-for-eight (1:8) reverse split for its ordinary shares (the “2025 Reverse Split”). On September\n29, 2023, the Company’s board of directors approved the elimination of par value for its ordinary shares, and thereafter, no par\nvalue is assigned to the ordinary shares. Accordingly, the reverse stock splits effected on October 5, 2023 and February 25, 2025 did\nnot involve any change in par value for its ordinary shares, and as a result of the 2025 Reverse Split, the shareholders received one\nnew ordinary share of the Company, no par value each, for every eight (8) shares they hold.\n\n \n\n76\n\n \n\n \n\nOn July 28, 2025, the Company’s\nshareholders approved through an EGM an amended and restated memorandum and articles of association to create a new class of Class B\nOrdinary Shares and re-designation of the existing issued and unissued Ordinary Shares as Class A Ordinary Shares. It was approved to\nchange the Company’s authorized share capital to comprise of a dual class of shares through (i) creating a new class of shares\ncomprising unlimited Class B Ordinary Shares which entitle the holder to fifty (50) votes per Class B Ordinary Share on any resolution\nof shareholders; (ii) re-designating an aggregate of then issued 532 Ordinary Shares held by Feng Zhou Management Limited into 532 Class\nB Ordinary Shares (the “Re-designation of Class B Shares”); (iii) re-designating the remaining then issued 116,027,226 Ordinary\nShares as 116,027,226 Class A Ordinary Shares with no par value each.\n\n \n\nThe following description\nof our authorized shares and our constitutional rules under our M&A is qualified in its entirety by reference to our M&A, which\nhave been filed as an exhibit to the annual report and incorporated herein by reference.\n\n \n\nM&A\n\n \n\nThe following discussion\ndescribes our M&A:\n\n \n\n*Objects and Purposes,\nRegister, and Shareholders.*Subject to the BVI Act and our M&A, our objects and purposes are unlimited other than any object\nnot prohibited by the BVI Act or any other law of the British Virgin Islands. Our register of members will be maintained by our registered\nagent. The entry of the name of a person in the register of members as a holder of a share in a BVI company is prima facie evidence that\nlegal title in the share vests in that person. Under the BVI Act, a BVI company may treat the registered holder of a share as the only\nperson entitled to (a) exercise any voting rights attaching to the share, (b) receive notices, (c) receive a distribution in respect\nof the share and (d) exercise other rights and powers attaching to the share. Consequently, as a matter of BVI law, where a shareholder’s\nshares are registered in the name of a nominee, the nominee is entitled to receive notices, receive distributions and exercise rights\nin respect of any such shares registered in its name. The beneficial owners of the shares registered in a nominee’s name will therefore\nbe reliant on their contractual arrangements with the nominee in order to receive notices and dividends and ensure the nominee exercises\nvoting and other rights in respect of the shares in accordance with their directions.\n\n \n\n*Directors’ Powers.*Under the BVI Act, subject to any modifications or limitations in a company’s M&A, a company’s business and affairs\nare managed by, or under the direction or supervision of, its directors; and directors generally have all powers necessary to manage\na company. A director must disclose any interest he has on any proposal, arrangement or contract not entered into in the ordinary course\nof business and on usual terms and conditions. An interested director may (subject to the M&A) vote on a transaction in which he\nhas an interest. In accordance with, and subject to, our M&A, the directors may by resolution of directors exercise all the powers\nof the Company to incur indebtedness, liabilities or obligations and to secure indebtedness, liabilities or obligations whether of the\nCompany or of any third party.\n\n \n\n*Rights, Preferences\nand Restrictions of Class A Ordinary Shares.*Our directors may (subject to the M&A) authorize dividends at such time and\nin such amount as they determine. Each Ordinary Share is entitled to one vote. In the event of a liquidation or dissolution of the Company,\nthe holders of Class A Ordinary Shares are (subject to the M&A) entitled to share ratably in all surplus assets remaining available\nfor distribution to them after payment and discharge of all claims, debts, liabilities and obligations of the Company and after provision\nis made for each class of shares (if any) having preference over the Class A Ordinary Shares if any at that time. There are no sinking\nfund provisions applicable to our Class A Ordinary Shares. Holders of our Class A Ordinary Shares have no pre-emptive rights. Subject\nto the provisions of the BVI Act, we may, (subject to the M&A) with shareholder consent, repurchase our Class A Ordinary Shares in\ncertain circumstances provided always that the company will, immediately after the repurchase, satisfy the solvency test. The company\nwill satisfy the solvency test, if (i) the value of the company’s assets exceeds its liabilities; and (ii) the company is able\nto pay its debts as they fall due.\n\n \n\n77\n\n \n\n \n\nIn accordance with the BVI\nAct:\n\n \n\n(i)the\ncompany may purchase, redeem or otherwise acquire its own shares in accordance with either\n(a) Sections 60, 61 and 62 of the BVI Act (save to the extent that those Sections are negated,\nmodified or inconsistent with provisions for the purchase, redemption or acquisition of its\nown shares specified in the company’s M&A); or (b) such other provisions for the\npurchase, redemption or acquisition of its own shares as may be specified in the company’s\nM&A;\n\n \n\n(ii)where\na company may purchase, redeem or otherwise acquire its own shares otherwise than in accordance\nwith Sections 60, 61 and 62 of the BVI Act, it may not purchase, redeem or otherwise acquire\nthe shares without the consent of the shareholder whose shares are to be purchased, redeemed\nor otherwise acquired, unless the company is permitted by the M&A to purchase, redeem\nor otherwise acquire the shares without that consent; and\n\n \n\n(iii)unless\nthe shares are held as treasury shares in accordance with Section 64 of the BVI Act, any\nshares acquired by the Company are deemed to be cancelled immediately on purchase, redemption\nor other acquisition.\n\n \n\n*Variation of the Rights\nof Shareholders.*As permitted by the BVI Act and in accordance with our M&A, the rights attached to shares of the Company\nmay (subject to the M&A) only, whether or not the Company is being wound up, be varied with the consent in writing of the holders\nof not less than one third of the issued shares of that class and the holders of not less than one third of the issued shares of any\nother class which may be affected by such variation.\n\n \n\n*Shareholder Meetings.*In accordance with, and subject to, our M&A, (a) any director of the Company may convene meetings of the shareholders at\nsuch times as the director considers necessary or desirable (and the director convening a meeting of shareholders may fix as the record\ndate for determining those shareholders that are entitled to vote at the meeting the date notice is given of the meeting, or such other\ndate as may be specified in the notice, being a date not earlier than the date of the notice); and (b) upon the written request of shareholders\nentitled to exercise thirty percent (30%) (or such lesser percentage that may be accepted by the directors in their absolute discretion)\nor more of the voting rights in respect of the matter for which the meeting is requested, the directors shall convene a meeting of shareholders.\nIn accordance with, and subject to, our M&A, (a) the director convening a meeting shall give not less than seven (7) days’\nnotice of a meeting of shareholders to those shareholders whose names on the date the notice is given appear as shareholders in the register\nof shareholders of the Company and are entitled to vote at the meeting; and the other directors; (b) a meeting of shareholders held in\ncontravention of the requirement to give notice is valid if shareholders holding at least ninety percent (90%) of the total voting rights\non all the matters to be considered at the meeting have waived notice of the meeting and, for this purpose, the presence of a shareholder\nat the meeting shall constitute waiver in relation to all of the Class A Ordinary Shares that that shareholder holds; (c) a meeting of\nshareholders is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than one third\nof the votes of the Class A Ordinary Shares or class or series of Class A Ordinary Shares entitled to vote on resolutions of shareholders\nto be considered at the meeting; and (d) if within half an hour from the time appointed for the meeting a quorum is not present, the\nmeeting, if convened upon the request of the shareholders, shall be dissolved.\n\n \n\n*Dividends.*Subject\nto 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\nsatisfied, based on reasonable grounds, that, immediately after distribution of the dividend, the value of our assets will exceed our\nliabilities and we will be able to pay our debts as they fall due. There is no further BVI law restriction on the amount of funds which\nmay be distributed by us by dividend, including all amounts paid by way of the subscription price for Class A Ordinary Shares regardless\nof whether such amounts may be wholly or partially treated as share capital or share premium under certain accounting principles. Shareholder\napproval is not (except as otherwise provided in our M&As) required to pay dividends under BVI law. In accordance with, and subject\nto, our M&A, no dividend shall bear interest as against the Company (except as otherwise provided in our M&As).\n\n \n\n78\n\n \n\n \n\n*Disclosure of the Securities\nand Exchange Commission’s Position on Indemnification for Securities Act Liabilities.*Insofar as indemnification for liabilities\narising under the Securities Act may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing\nprovisions, the registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against\npublic policy as expressed in the Securities Act and is therefore unenforceable.\n\n \n\n*Transfer of Shares*.\nSubject to any applicable restrictions or limitations arising pursuant to (i) our M&A; or (ii) the BVI Act, any of our shareholders\nmay transfer all or any of his or her shares by an instrument of transfer in the usual or common form or in any other form which our\ndirectors may approve (such instrument of transfer being signed by the transferor and containing the name and address of the transferee).\nOur M&A also (save as otherwise provided therein) provide that (i) where Class A Ordinary Shares of the Company are listed on the\nNasdaq Capital Market or any other stock exchange or automated quotation system on which the Class A Ordinary Shares are then traded\n(the “Recognised Exchange”), shares may be transferred without the need for a written instrument of transfer if the transfer\nis carried out in accordance with the law, rules, procedures and other requirements applicable to shares listed on the Recognised Exchange\nor (ii) shares may be transferred by means of a system utilized for the purposes of holding and transferring shares in uncertified form\n(the “Relevant System”), and that the operator of the Relevant System (and any other person necessary to ensure the Relevant\nSystem is effective to transfer shares) shall act as agent and attorney-in-fact of the Shareholders for the purposes of the transfer\nof any shares transferred by means of the Relevant System (including, for such purposes, to execute and deliver an instrument of transfer\nin the name of and on behalf of any Shareholder who is transferring shares).\n\n \n\nSummary of Certain Significant Provisions\nof the BVI Act\n\n \n\nThe BVI Act differs from\nlaws applicable to US corporations and their shareholders. Set forth below is a summary of certain significant provisions of the BVI\nAct applicable to us (save to the extent that such provisions have been, to the extent permitted under the BVI Act, negated or modified\nin our M&A in accordance with the BVI Act).\n\n \n\n*Mergers, Consolidations\nand Similar Arrangements.*The BVI Act provides for mergers as that expression is understood under US corporate law. Common law\nmergers are also permitted outside of the scope of the BVI Act. Under the BVI Act, two or more companies may either merge into one of\nsuch existing companies, or the surviving company, or consolidate with both existing companies ceasing to exist and forming a new company,\nor the consolidated company. The procedure for a merger or consolidation between our Company and another company (which need not be a\nBVI company) is set out in the BVI Act. The directors of the BVI company or BVI companies which are to merge or consolidate must approve\na written plan of merger or consolidation which must also be authorized by a resolution of shareholders (and the outstanding shares of\nevery class of shares that are entitled to vote on the merger or consolidation as a class if the memorandum or articles of association\nso provide or if the plan of merger or consolidation contains any provisions that, if contained in a proposed amendment to the memorandum\nor articles, would entitle the class to vote on the proposed amendment as a class) of the shareholders of the BVI company or BVI companies\nwhich are to merge. A foreign company which is able under the laws of its foreign jurisdiction to participate in the merger or consolidation\nis required by the BVI Act to comply with the laws of that foreign jurisdiction in relation to the merger or consolidation. The BVI company\nmust then execute articles of merger or consolidation, containing certain prescribed details. The plan and articles of merger or consolidation\nare then filed with the Registrar of Corporate Affairs in the BVI, or the Registrar. If the surviving company or the consolidated company\nis to be incorporated under the laws of a jurisdiction outside BVI, it shall file the additional instruments required under Section 174(2)(b)\nof the BVI Act. The Registrar then (if he or she is satisfied that the requirements of the BVI Act have been complied with) registers,\nin the case of a merger, the articles of merger or consolidation and any amendment to the M&A of the surviving company and, in the\ncase of a consolidation, the M&A of the new consolidated company and issues a certificate of merger or consolidation (which is conclusive\nevidence of compliance with all requirements of the BVI Act in respect of the merger or consolidation). The merger or consolidation is\neffective on the date that the articles of merger or consolidation are registered by the Registrar or on such subsequent date, not exceeding\nthirty days, as is stated in the articles of merger or consolidation but if the surviving company or the consolidated company is a company\nincorporated under the laws of a jurisdiction outside the BVI, the merger or consolidation is effective as provided by the laws of that\nother jurisdiction.\n\n \n\n79\n\n \n\n \n\nAs soon as a merger or consolidation\nbecomes effective (inter alia), (a) the surviving company or consolidated company (so far as is consistent with its amended M&A,\nas amended or established by the articles of merger or consolidation) has all rights, privileges, immunities, powers, objects and purposes\nof each of the constituent companies; (b) the M&A of any surviving company are automatically amended to the extent, if any, that\nchanges to its amended M&A are contained in the articles of merger; (c) assets of every description, including choses-in-action and\nthe business of each of the constituent companies, immediately vest in the surviving company or consolidated company; (d) the surviving\ncompany or consolidated company is liable for all claims, debts, liabilities and obligations of each of the constituent companies; (e)\nno conviction, judgment, ruling, order, claim, debt, liability or obligation due or to become due, and no cause existing, against a constituent\ncompany or against any shareholder, director, officer or agent thereof, is released or impaired by the merger or consolidation; and (f)\nno proceedings, whether civil or criminal, pending at the time of a merger or consolidation by or against a constituent company, or against\nany shareholder, director, officer or agent thereof, are abated or discontinued by the merger or consolidation, but: (i) the proceedings\nmay be enforced, prosecuted, settled or compromised by or against the surviving company or consolidated company or against the shareholder,\ndirector, officer or agent thereof, as the case may be or (ii) the surviving company or consolidated company may be substituted in the\nproceedings for a constituent company but if the surviving company or the consolidated company is incorporated under the laws of a jurisdiction\noutside the BVI, the effect of the merger or consolidation is the same as noted foregoing except in so far as the laws of the other jurisdiction\notherwise provide.\n\n \n\nThe Registrar shall strike\noff the register of companies each constituent company that is not the surviving company in the case of a merger and all constituent\ncompanies in the case of a consolidation (save that this shall not apply to a foreign company).\n\n \n\nIf the directors determine\nit to be in the best interests of us, it is also possible for a merger to be approved as a court approved plan of arrangement or as a\nscheme of arrangement in accordance with (in each such case) the BVI Act. The convening of any necessary shareholders meetings and subsequently\nthe arrangement must be authorized by the BVI court. A scheme of arrangement requires the approval of 75% of the votes of the shareholders\nor class of shareholders, 75% in value of the creditors or class of creditors, as the case may be. If the effect of the scheme is different\nin relation to different shareholders, it may be necessary for them to vote separately in relation to the scheme, with it being required\nto secure the requisite approval level of each separate voting group. Under a plan of arrangement, a BVI court may determine what shareholder\napprovals are required and the manner of obtaining the approval.\n\n \n\n*Continuation into a\nJurisdiction Outside the BVI.*In accordance with, and subject to, our M&A, the Company may by resolution of Shareholders\nor by a resolution passed unanimously by all directors of the Company continue as a company incorporated under the laws of a jurisdiction\noutside the BVI in the manner provided under those laws. The Company does not cease to be a BVI company unless the foreign law permits\ncontinuation and the BVI company has complied with the requirements of that foreign law. Where a company is continued under the laws\nof a jurisdiction outside the BVI, (a) the Company continues to be liable for all of its claims, debts, liabilities and obligations that\nexisted prior to its continuation, (b) no conviction, judgment, ruling, order, claim, debt, liability or obligation due or to become\ndue, and no cause existing, against the Company or against any shareholder, director, officer or agent thereof, is released or impaired\nby its continuation as a company under the laws of the jurisdiction outside the BVI, (c) no proceedings, whether civil or criminal, pending\nby or against the Company, or against any shareholder, director, officer or agent thereof, are abated or discontinued by its continuation\nas a company under the laws of the jurisdiction outside the BVI, but the proceedings may be enforced, prosecuted, settled or compromised\nby or against the Company or against the shareholder, director, officer or agent thereof, as the case may be; and (d) service of process\nmay continue to be effected on the registered agent of the Company in the BVI in respect of any claim, debt, liability or obligation\nof the Company during its existence as a company under the BVI Act.\n\n \n\n*Directors.*In\naccordance with, and subject to, our M&A (including, for the avoidance of any doubt, any rights or restrictions attaching to any\nClass A Ordinary Shares), (a) the directors are elected by resolution of shareholders or by resolution of directors for such term as\nthe shareholders or directors determine; (b) each director holds office until his disqualification, death, resignation or removal; (c)\na director may be removed from office by resolution of directors or resolution of shareholders; (d) a director may resign his office\nby giving written notice of his resignation to the Company and the resignation has effect from the date the notice is received by the\nCompany at the office of its registered agent or from such later date as may be specified in the notice and a director shall resign forthwith\nas a director if he is, or becomes, disqualified from acting as a director under the BVI Act; and (e) a director is not required to hold\nClass A Ordinary Shares as a qualification to office.\n\n \n\n80\n\n \n\n \n\nIn accordance with, and subject\nto, our M&A, (a) any one director of the Company may call a meeting of the directors by sending a written notice to each other director;\n(b) the directors of the Company or any committee thereof may meet at such times and in such manner as the directors may determine to\nbe necessary or desirable; (c) a director shall be given not less than three (3) days’ notice of meetings of directors, but a meeting\nof directors held without three (3) days’ notice having been given to all directors shall be valid if all the directors entitled\nto vote at the meeting who do not attend waive notice of the meeting, and the inadvertent failure to give notice of a meeting to a director,\nor the fact that a director has not received the notice, does not invalidate the meeting; (d) a meeting of directors is duly constituted\nfor all purposes if at the commencement of the meeting there are present in person or by alternate not less than such number as may be\nfixed by the directors and if not fixed shall be two (2), unless there are only one (1) director in which case the quorum is one; (e)\na director may by a written instrument appoint an alternate who need not be a director and the alternate shall be entitled to attend\nmeetings in the absence of the director who appointed him and to vote or consent in place of the director until the appointment lapses\nor is terminated; (f) a resolution of directors is passed if either (i) the resolution is approved at a duly convened and constituted\nmeeting of directors of the Company or of a committee of directors of the Company by the affirmative vote of a majority of the directors\npresent at the meeting who voted except that where a director is given more than one vote, he shall be counted by the number of votes\nhe casts for the purpose of establishing a majority casting the vote; or (ii) in the form of written resolution by all of the directors\nor by all of the members of a committee of directors of the Company, as the case may be, unless (in either case) the BVI Act or our M&A\nrequire a different majority.\n\n \n\n*Indemnification of\nDirectors.*In accordance with, and subject to, our M&A (including the limitations detailed therein), the Company shall indemnify\nagainst all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in\nconnection with legal, administrative or investigative proceedings any person who (a) is or was a party or is threatened to be made a\nparty to any threatened, pending or completed proceedings, whether civil, criminal, administrative or investigative, by reason of the\nfact that the person is or was a director of the Company; or (b) is or was, at the request of the Company, serving as a director of,\nor in any other capacity is or was acting for, another company or a partnership, joint venture, trust or other enterprise.\n\n \n\nIn accordance with, and subject\nto, our M&A (including the limitations detailed therein), the indemnity referred to above only applies if the liability does not\narise as a result of actual fraud or willful default of the indemnified person.\n\n \n\nIn accordance with, and subject\nto, our M&A, the Company may purchase and maintain insurance in relation to any person who is or was a director, officer or liquidator\nof the Company, or who at the request of the Company is or was serving as a director, officer or liquidator of, or in any other capacity\nis or was acting for, another company or a partnership, joint venture, trust or other enterprise, against any liability asserted against\nthe person and incurred by the person in that capacity, whether or not the Company has or would have had the power to indemnify the person\nagainst the liability as provided in the articles.\n\n \n\n*Directors and Conflicts\nof Interest.*As noted above, pursuant to the BVI Act and the Company’s M&A, a director of a company who has an interest\nin a transaction and who has declared such interest to the other directors, may:\n\n \n\n \n(a)\nvote on a matter relating\nto the transaction;\n\n \n\n \n(b)\nattend a meeting of directors\nat which a matter relating to the transaction arises and be included among the directors present at the meeting for the purposes\nof a quorum; and\n\n \n\n \n(c)\nsign a document on behalf\nof the Company, or do any other thing in his capacity as a director, that relates to the transaction, and, subject to compliance\nwith the BVI Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from such transaction\nand no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.\n\n \n\nIn accordance with, and subject\nto, our M&A, no director shall be disqualified by his office from contracting with the Company either as a buyer, seller or otherwise,\nnor shall any such contract or arrangement entered into by or on behalf of the Company in which any director shall be in any way interested\nbe voided, nor shall any director so contracting or being so interested be liable to account to the Company for any profit realized by\nany such contract or arrangement, by reason of such director holding that office or by reason of the fiduciary relationship thereby established,\nprovided such director shall, immediately after becoming aware of the fact that he is interested in a transaction entered into or to\nbe entered into by the Company, disclose such interest to the board. For the purposes noted foregoing, a disclosure to all other directors\nto the effect that a director is a member, director, officer or trustee of another named company or other person and is to be regarded\nas interested in any transaction which may, after the date of the entry or disclosure, be entered into with that entity or individual,\nis a sufficient disclosure of interest in relation to that transaction.\n\n \n\n81\n\n \n\n \n\n*Shareholders’\nSuits.*The enforcement of the Company’s rights will ordinarily be a matter for its directors.\n\n \n\nIn certain circumstances,\na shareholder has the right to seek various remedies against a BVI company in the event the directors are in breach of their duties under\nthe BVI Act. Pursuant to Section 184B of the BVI Act, if a company or director of a BVI company engages, proposes to engage in, or has\nengaged in conduct that contravenes the provisions of the BVI Act or the M&A of the company, the BVI court may, on application of\na shareholder or director of the company, make an order directing the company or director to comply with, or restraining the company\nor director from engaging in conduct that contravenes, the BVI Act or the memorandum or articles of association.\n\n \n\nFurthermore, pursuant to\nSection 184I(1) of the BVI Act a shareholder of a company who considers that the affairs of the company have been, are being or are likely\nto be, conducted in a manner that is, or any acts of the company have been, or are likely to be oppressive, unfairly discriminatory,\nor unfairly prejudicial to him in that capacity, may apply to the BVI Court for an order which, inter alia, can require the company or\nany other person to pay compensation to the shareholder.\n\n  \n\nThe BVI Act provides for\na series of remedies available to shareholders. Where a company incorporated under the BVI Act conducts some activity which contravenes\nthe BVI Act or the company’s M&A, the court can issue a restraining or compliance order. Under Section 184G of the BVI Act,\na shareholder of a company may bring an action against the company for breach of a duty owed by the company to him as a shareholder.\nA shareholder also pursuant to Section 184C of the BVI Act may, with the leave of the BVI court, bring proceedings or intervene in proceedings\nin the name of the company, in certain circumstances. Such actions are known as derivative actions. The BVI court may only grant leave\nto bring a derivative action where the following circumstances apply:\n\n \n\n \n●\nthe company does not intend\nto bring, diligently continue or defend or discontinue proceedings; and\n\n \n\n \n●\nit is in the interests\nof the company that the conduct of the proceedings not be left to the directors or to the determination of the shareholders as a\nwhole.\n\n \n\nWhen considering whether\nto grant leave, the BVI court is also required to have regard to the following matters:\n\n \n\n \n●\nwhether the shareholder\nis acting in good faith;\n\n \n\n \n●\nwhether a derivative action\nis in the company’s interests, taking into account the directors’ views on commercial matters;\n\n \n\n \n●\nwhether the proceedings\nare likely to succeed;\n\n \n\n \n●\nthe costs of the proceedings;\nand\n\n \n\n \n●\nwhether an alternative\nremedy is available.\n\n \n\nAny shareholder of a company\nmay apply to the BVI court under the Insolvency Act, 2003 of the BVI (the “Insolvency Act”) for the appointment of a liquidator\nto liquidate the company and the court may appoint a liquidator for the company if it is of the opinion that it is just and equitable\nto do so.\n\n \n\n82\n\n \n\n \n\n*Appraisal Rights.*The\nBVI Act provides that any shareholder of a company is entitled to payment of the fair value of his shares upon dissenting from any of\nthe following: (a) a merger if the company is a constituent company, unless the company is the surviving company and the shareholder\ncontinues to hold the same or similar shares; (b) a consolidation, if the company is a constituent company; (c) any sale, transfer, lease,\nexchange or other disposition of more than 50% in value of the assets or business of the Company if not made in the usual or regular\ncourse of the business carried on by the Company but not including: (i) a disposition pursuant to an order of the court having jurisdiction\nin the matter, (ii) a disposition for money on terms requiring all or substantially all net proceeds to be distributed to the shareholders\nin accordance with their respective interests within one year after the date of disposition, or (iii) a transfer pursuant to the power\nof the directors to transfer assets for the protection thereof; (d) a compulsory redemption of 10% or fewer of the issued shares of the\nCompany required by the holders of 90% or more of the votes of the outstanding shares of the Company pursuant to the terms of Section\n176 of the BVI Act; and (e) an arrangement, if permitted by the BVI court.\n\n \n\nGenerally, any other claims\nagainst a company by its shareholders must be based on the general laws of contract or tort applicable in the BVI or their individual\nrights as shareholders as established by the company’s M&A. There are common law rights for the protection of shareholders\nthat may be invoked, largely derived from English common law. For example, under the rule established in the English case known as Foss\nv. Harbottle, a court will generally refuse to interfere with the management of a company at the insistence of a minority of its shareholders\nwho express dissatisfaction with the conduct of the company’s affairs by the majority or the board of directors. However, every\nshareholder is entitled to seek to have the affairs of the company conducted properly according to law and the constituent documents\nof the company. As such, if those who control the Company have persistently disregarded the requirements of company law or the provisions\nof the company’s M&A, then the courts may grant relief. Generally, the areas in which the courts will intervene are the following:\n\n \n\n \n●\na company is acting or\nproposing to act illegally or beyond the scope of its authority;\n\n \n\n \n●\nthe act complained of,\nalthough not beyond the scope of the authority, could only be effected if duly authorized by more than the number of votes which\nhave actually been obtained;\n\n \n\n \n●\nthe individual rights of\nthe plaintiff shareholder have been infringed or are about to be infringed; or\n\n \n\n \n●\nthose who control the Company\nare perpetrating a “fraud on the minority.”\n\n \n\n*Share Repurchases and\nRedemptions.*As permitted by the BVI Act and subject to our M&A, shares may be repurchased, redeemed or otherwise acquired\nby us with shareholder consent. Depending on the circumstances of the redemption or repurchase, our directors may need to determine that,\nimmediately following the redemption or repurchase, we will be able to satisfy our debts as they fall due and the value of our assets\nexceeds our liabilities. Our directors may only exercise this power on our behalf, subject to the BVI Act, our M&A and to any applicable\nrequirements imposed from time to time by the SEC, the NASDAQ or any other stock exchange on which our securities are listed.\n\n \n\n*Inspection of Books\nand Records*. Under the BVI Act, members of the general public, on payment of a nominal fee, can obtain copies of the public records\nof a company available at the office of the Registrar, including the company’s certificate of incorporation, its M&A (with\nany amendments thereto), records of license fees paid to date, any articles of dissolution, any articles of merger, and a register of\ncharges created by the company (if the Company has elected to file such a register or an applicable charge has caused the same to be\nfiled).\n\n \n\nA shareholder of a company\nis entitled, on giving written notice to the company, to inspect:\n\n \n\n \n(a)\nthe M&A;\n\n \n\n \n(b)\nthe register of members;\n\n \n\n \n(c)\nthe register of directors;\nand\n\n \n\n \n(d)\nthe minutes of meetings\nand resolutions of shareholders and of those classes of shares of which he is a shareholder.\n\n \n\n83\n\n \n\n \n\nIn addition, a shareholder\nmay make copies of or take extracts from the documents and records referred to in (a) through (d) above. However, subject to the M&A\nof the Company, the directors may, if they are satisfied that it would be contrary to the Company’s interests to allow a shareholder\nto inspect any document, or part of any document, specified in (b), (c) or (d) above, refuse to permit the shareholder to inspect the\ndocument or limit the inspection of the document, including limiting the making of copies or the taking of extracts from the records.\nWhere a company fails or refuses to permit a shareholder to inspect a document or permits a shareholder to inspect a document subject\nto limitations, that shareholder may apply to the High Court of the BVI for an order that he should be permitted to inspect the document\nor to inspect the document without limitation.\n\n \n\nOur registered agent is Sertus\nIncorporations (BVI) Limited, Sertus Chambers, P.O. Box 905, Quastisky Building, Road Town, Tortola, British Virgin Islands. A company\nis required to keep a copy of its register of members and register of directors at the offices of its registered agent in the BVI, and\nthe Company is required to notify any changes to the originals of such registers (assuming the originals are held elsewhere) to the registered\nagent, in writing, within 15 days of any change; and to provide the registered agent with a written record of the physical address of\nthe place or places at which the original register of members or the original register of directors is kept.\n\n \n\nWhere the place at which\nthe original register of members or the original register of directors of the Company is changed, the Company must provide the registered\nagent with the physical address of the new location of the records within 14 days of the change of location.\n\n \n\nA company is also required\nto keep at the office of its registered agent or at such other place or places, within or outside the BVI, as the directors may determine\nthe minutes of meetings and resolutions of shareholders and of classes of shareholders; and the minutes of meetings and resolutions of\ndirectors and committees of directors. If such records are kept at a place other than at the office of the Company’s registered\nagent, the Company is required to provide the registered agent with a written record of the physical address of the place or places at\nwhich the records are kept and to notify the registered agent, within 14 days, of the physical address of any new location where such\nrecords may be kept.\n\n \n\n*Dissolution; Winding\nUp.*As permitted by the BVI Act and subject to our M&A, we may be voluntarily liquidated and dissolved under Part XII of\nthe BVI Act by resolution of directors and resolution of shareholders if we have no liabilities or we are able to pay our debts as they\nfall due and the value of our assets equals or exceeds our liabilities.\n\n \n\nWe also may be wound up and\ndissolved in circumstances where we are insolvent in accordance with the terms of the Insolvency Act.\n\n \n\n*Anti-Money Laundering\nLaws.*In order to comply with legislation and regulations aimed at the prevention of money laundering we are required to adopt\nand maintain anti-money laundering procedures, and may require subscribers to provide evidence to verify their identity. Where permitted,\nand subject to certain conditions, we also may delegate the maintenance of our anti-money laundering procedures (including the acquisition\nof due diligence information) to a suitable person. We reserve the right to request such information as is necessary to verify the identity\nof a subscriber. In the event of delay or failure on the part of the subscriber in producing any information required for verification\npurposes, we may refuse to accept the application, in which case any funds received will be returned without interest to the account\nfrom which they were originally debited.\n\n \n\nIf any person resident in\nthe BVI knows or suspects that another person is engaged in money laundering or terrorist financing and the information for that knowledge\nor suspicion came to his or her attention in the course of his or her business the person will be required to report his belief or suspicion\nto the Financial Investigation Agency of the BVI, pursuant to the Proceeds of Criminal Conduct Act 1997 (as amended). Such a report shall\nnot be treated as a breach of confidence or of any restriction upon the disclosure of information imposed by any enactment or otherwise.\n\n \n\n84\n\n \n\n \n\n*Exchange controls.*We know of no BVI laws, decrees, regulations or other legislation that limit the import or export of capital or the payment of\ndividends to shareholders holders who do not reside in the BVI.\n\n \n\nMaterial Differences in BVI Law and our Amended\nand Restated M&A and Delaware Law\n\n \n\nOur corporate affairs are\ngoverned by our amended and restated M&A and the provisions of applicable BVI law, including the BVI Act and BVI common law. The\nBVI Act differs from laws applicable to US corporations and their shareholders. The following table provides a comparison between certain\nstatutory provisions of the BVI Act (together with the provisions of our M&A) and the Delaware General Corporation Law relating to\nshareholders’ rights.\n\n \n\nShareholder Meetings\n\n \n\nBVI\n \nDelaware\n\n \n \n \n\n●\nIn accordance\nwith, and subject to, our M&A, (a) any director of the company may convene meetings of the shareholders at such times and in\nsuch manner as the director considers necessary or desirable; and (b) upon the written request of shareholders entitled to exercise\nthirty percent (30%) or more of the voting rights in respect of the matter for which the meeting is requested the directors shall\nconvene a meeting of shareholders\n \n●\nMay be held\nat such time or place as designated in the charter or the by-laws, or if not so designated, as determined by the board of directors\n\n \n \n \n \n \n\n●\nMay be held inside or outside\nthe BVI\n \n●\nMay be held inside or outside\nDelaware\n\n \n \n \n \n \n\n●\nIn accordance with, and\nsubject to, our M&A, (a) the director convening a meeting shall give not less than 7 days’ notice of a meeting of shareholders\nto those shareholders whose names on the date the notice is given appear as shareholders in the register of members of the company\nand are entitled to vote at the meeting; and the other directors; and (b) the director convening a meeting of shareholders may fix\nas the record date for determining those shareholders that are entitled to vote at the meeting the date notice is given of the meeting,\nor such other date as may be specified in the notice, being a date not earlier than the date of the notice\n \n●\nWhenever shareholders are\nrequired to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, if any, date\nand hour of the meeting, and the means of remote communication, if any\n\n \n \n \n \n \n\n●\nIn accordance with, and\nsubject to, our M&A (including, for the avoidance of any doubt, any rights or restrictions attaching to any shares), (a) a shareholder\nmay be represented at a meeting of shareholders by a proxy who may speak and vote on behalf of the shareholder; and (b) the instrument\nappointing a proxy shall be produced at the place designated for the meeting before the time for holding the meeting at which the\nperson named in such instrument proposes to vote. The notice of the meeting may specify an alternative or additional place or time\nat which the proxy shall be presented.\n \n●\nAny person authorized to\nvote may authorize another person or persons to act for him by proxy\n\n \n\n85\n\n \n\n \n\nShareholder’s Voting Rights\n\n \n\nBVI\n \nDelaware\n\n \n \n \n\n●\nIn accordance\nwith, and subject to, our M&A (including, for the avoidance of any doubt, any rights or restrictions attaching to any shares),\n(a) a meeting of shareholders is duly constituted if, at the commencement of the meeting, there are present in person or by proxy\nnot less than one third of the votes of the Class A Ordinary Shares or class or series of Class A Ordinary Shares entitled to vote\non resolutions of shareholders to be considered at the meeting; and (b) if within half an hour from the time appointed for the meeting\na quorum is not present, the meeting, if convened upon the request of shareholders, shall be dissolved.\n \n●\nThe charter\nor bylaws may specify the number to constitute a quorum but in no event shall a quorum consist of less than one-third of shares entitled\nto vote at a meeting. In the absence of such specifications, a majority of shares shall constitute a quorum\n\n \n \n \n \n \n\n●\nIn accordance with, and\nsubject to, our M&A (including, for the avoidance of any doubt, any rights or restrictions attaching to any shares), (a) at any\nmeeting of the shareholders, a resolution put to the vote of the meeting shall be decided on a show of hands by a simple majority,\nunless a poll is (before or on the declaration of the result of the show of hands) demanded by the Chairman; or one or more shareholders\npresent in person or by proxy entitled to vote and who together hold not less than 10 percent of the total voting share issued and\nhaving the right to vote on such resolution. Unless a poll is so demanded, a declaration by the Chairman that a resolution has, on\na show of hands, been carried, or carried unanimously, or by a particular majority, or lost, and an entry to that effect in the book\nof the proceedings of the Company, shall be conclusive evidence of the fact, without proof of the number or proportion of the votes\nrecorded in favour of or against such resolution; (b)if a poll is duly demanded it shall be taken in such manner as the Chairman\ndirects, and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. The demand\nfor a poll may be withdrawn, at the discretion of the Chairman; (c) on a poll, every holder of a voting share present in person or\nby proxy shall have one vote for every voting share of which he is the holder which confers the right to a vote on the resolution;\nand (d) in the case of an equality of votes, whether on a show of hands or on a poll, the Chairman of the meeting at which the show\nof hands takes place, or at which the poll is demanded, shall not be entitled to a second or casting vote. In accordance with the\nBVI Act, a shareholder resolution is passed if approved by a majority of in excess of 50% or, if a higher majority is required by\nthe M&A, that higher majority, of the votes of those shareholders entitled to vote and voting on the resolution; unless (in either\ncase) the BVI Act or our M&A require a different majority.\n \n \n \n\n \n \n \n \n \n\n●\nIn accordance with, and\nsubject to, our M&A, (a) the rights attached to Class A Ordinary Shares as specified in the M&A may only, whether or not\nthe company is being wound up, be varied with the consent in writing of the holders of not less than one third of the issued shares\nof that class and the holders of not less than one third of the issued shares of any other class which may be affected by such variation.,\nexcept where some other majority is required under our M&A or the BVI Act.\n \n●\nExcept as provided in the\ncharter documents, changes in the rights of shareholders as set forth in the charter documents require approval of a majority of\nits shareholders\n\n \n\n86\n\n \n\n \n\n●\nIn accordance\nwith, and subject to, our M&A (including, for the avoidance of any doubt, any rights or restrictions attaching to any shares),\nthe company may amend its memorandum or articles by a resolution of shareholders or by a resolution of directors, save that no amendment\nmay be made by a Resolution of directors: (i) to restrict the rights or powers of the shareholders to amend the memorandum or articles;\n(ii) to change the percentage of shareholders required to pass a Resolution of Shareholders to amend the memorandum or articles;\n(iii) in circumstances where the memorandum or articles cannot be amended by the shareholders.\n \n●\nThe certificate\nof incorporation or bylaws may provide for cumulative voting\n\n \n\nDirectors\n\n \n\nBVI\n\n \nDelaware\n\n \n \n \n \n \n\n●\nIn accordance with, and\nsubject to, our M&A, the minimum number of directors shall be one\n \n●\nBoard must consist of at\nleast one member\n\n \n \n \n \n \n\n●\nIn accordance with, and\nsubject to, our M&A (including, for the avoidance of any doubt, any rights or restrictions attaching to any Class A Ordinary\nShares), (a) the directors are elected by resolution of shareholders or by resolution of directors for such term as the shareholders\nor directors determine; (b) each director holds office until his disqualification, death, resignation or removal; (c) a director\nmay be removed from office by resolution of directors or resolution of shareholders; (d) a director may resign his office by giving\nwritten notice of his resignation to the Company and the resignation has effect from the date the notice is received by the Company\nat the office of its registered agent or from such later date as may be specified in the notice and a director shall resign forthwith\nas a director if he is, or becomes, disqualified from acting as a director under the BVI Act; and (e) a director is not required\nto hold Class A Ordinary Shares as a qualification to office.\n \n●\nNumber of board members\nshall be fixed by the by laws, unless the charter fixes the number of directors, in which case a change in the number shall be made\nonly by amendment of the charter\n\n \n \n \n \n \n\n●\nDirectors do not have to\nbe independent.\n \n●\nDirectors do not have to\nbe independent\n\n \n\nFiduciary Duties\n\n \n\nBVI\n\n \nDelaware\n\n \n \n \n \n \n\n●\nDirectors owe duties at\nboth common law and under statute including as follows:\n \n●\nDirectors and officers\nmust act in good faith, with the care of a prudent person, and in the best interest of the corporation\n\n \n \n \n \n \n\n●\nDuty to act honestly and\nin good faith and in what the director believes to be in the best interests of the company;\n \n●\nDirectors and officers\nmust refrain from self-dealing, usurping corporate opportunities and receiving improper personal benefits\n\n \n\n87\n\n \n\n \n\n●\nDuty to exercise\npowers for a proper purpose and directors shall not act, or agree to the Company acting, in a manner that contravenes the BVI Act\nor the M&A;\n \n \n \n\n \n \n \n \n \n\n●\nThe BVI Act provides that\na director of a company shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into, or\nto be entered into, by the company, disclose the interest to the board of the company. However, the failure of a director to disclose\nthat interest does not affect the validity of a transaction entered into by the director or the company, so long as the transaction\nwas not required to be disclosed because the transaction is between the company and the director himself and is in the ordinary course\nof business and on usual terms and conditions. Additionally, the failure of a director to disclose an interest does not affect the\nvalidity of the transaction entered into by the company if (a) the material facts of the interest of the director in the transaction\nare known by the shareholders entitled to vote at a meeting of shareholders and the transaction is approved or ratified by a resolution\nof shareholders or (b) the company received fair value for the transaction\n \n●\nDirectors may vote on a\nmatter in which they have an interest so long as the director has disclosed any interests in the transaction\n\n \n\nShareholder’s Derivative Actions\n\n \n\nBVI\n\n \nDelaware\n\n \n \n \n \n \n\n●\nGenerally speaking, the\ncompany is the proper plaintiff in any action. A shareholder may, with the leave of the BVI court, bring proceedings or intervene\nin proceedings in the name of the company, in certain circumstances. Such actions are known as derivative actions. The BVI court\nmay only grant leave to bring a derivative action where the following circumstances apply:\n \n●\nIn any derivative suit\ninstituted by a shareholder of a corporation, it shall be averred in the complaint that the plaintiff was a shareholder of the corporation\nat the time of the transaction of which he complains or that such shareholder’s stock thereafter devolved upon such shareholder\nby operation of law\n\n \n \n \n \n \n\n●\nthe company does not intend\nto bring, diligently continue or defend or discontinue the proceedings; and\n \n●\nComplaint shall set forth\nwith particularity the efforts of the plaintiff to obtain the action by the board or the reasons for not making such effort\n\n \n \n \n \n \n\n●\nit is in the interests\nof the company that the conduct of the proceedings not be left to the directors or to the determination of the shareholders as a\nwhole when considering whether to grant leave, the BVI court is also required to have regard to the following matters:\n \n●\nSuch action shall not be\ndismissed or compromised without the approval of the Delaware Court of Chancery\n\n \n\n \ni.\nwhether the shareholder\nis acting in good faith;\n\n \n \n \n\n \nii.\nwhether a derivative action\nis in the interests of the company, taking into account the directors’ views on commercial matters;\n\n \n \n \n\n \niii.\nwhether the action is likely\nto succeed;\n\n \n \n \n\n \niv.\nthe costs of the proceedings\nin relation to the relief likely to be obtained; and\n\n \n \n \n\n \nv.\nwhether an alternative\nremedy to the derivative claim is available\n\n \n\n88\n\n \n\n \n\n10.C. Material Contracts\n\n \n\n*The following descriptions\nof the material provisions of the referenced agreements do not purport to be complete and are subject to, and qualified in their entirety\nby reference to the agreements which have been filed as exhibits to this report.*\n\n \n\nThe Underwriting Agreement with Aegis Capital\nCorp.\n\n \n\nOn January 18, 2022, the\nCompany entered into an underwriting agreement (the “Underwriting Agreement”) with Aegis Capital Corp. (the “Underwriter”),\npursuant to which the Company agreed to sell to the Underwriter, in a firm commitment public offering (the “Offering”) (i)\n8,285,260 ordinary shares (pre-2022 Reverse Split, the “Firm Shares”) of the Company, for a public offering price of $0.18\nper share (pre-2022 Reverse Split), (ii) 11,521,500 pre-funded warrants (the “Pre-funded Warrants”) to purchase 11,521,500\nshares (pre-2022 Reverse Split, the “Warrant Shares”), for a public offering price of $0.17 per Pre-funded Warrant to those\npurchasers whose purchase of ordinary shares in this offering would otherwise result in the purchaser, together with its affiliates and\ncertain related parties, beneficially owning more than 4.99% (or, at the election of the holder, 9.99%) of the Company’s outstanding\nordinary shares immediately following the consummation of this Offering. The Company also granted the Underwriter an over-allotment option\nto purchase up to 2,971,014 ordinary shares (pre-2022 Reverse Split, the “Option Shares”, together with Firm Shares, the\n“Shares”). The Pre-funded Warrants have an exercise price of $0.01 per share. The Pre-funded Warrants were issued in registered\nform under a warrant agent agreement (the “Warrant Agent Agreement”) between the Company and TranShare Corporation as the\nwarrant agent. The Underwriter has exercised, an over-allotment option to purchase the Option Shares.\n\n \n\nAs of February 8, 2022, the\ninvestors have exercised all the Pre-funded Warrants to purchase 11,521,500 ordinary shares (pre-2022 Reverse Split). As a result, the\nnumber of issued and outstanding ordinary shares of the Company was 40,627,868 (pre-2022 Reverse Split) as of February 9, 2022.\n\n \n\nThe Underwriting Agreement\nand the form of the Warrant Agent Agreement were filed as Exhibits 1.1 and 4.1 to the Current Report on Form 6-K filed with the Commission\non January 21, 2022, and such documents are incorporated herein by reference. The foregoing is only a brief description of the material\nterms of the Underwriting Agreement and the Warrant Agent Agreement, and does not purport to be a complete description of the rights\nand obligations of the parties thereunder and is qualified in its entirety by reference to such exhibits.\n\n \n\nThe Securities Purchase Agreement with Streeterville\nCapital, LLC (March 2022)\n\n \n\nOn March 14, 2022, the Company\nentered into a securities purchase agreement (the “Purchase Agreement”) with Streeterville Capital, LLC, a Utah limited liability\ncompany, pursuant to which the Company issued Streeterville an unsecured promissory note on March 16, 2022 in the original principal\namount of $2,804,848.00 (the “2022 Note”), convertible into ordinary shares, $0.004 par value per share (pre-2022 Reverse\nSplit), of the Company (the “Pre-reverse Ordinary Shares”), for $2,636,557.00 in gross proceeds.\n\n \n\nThe 2022 Note bears interest\nat a rate of 6% per annum compounding daily. All outstanding principal and accrued interest on the 2022 Note will become due and payable\ntwelve months after the purchase price of the 2022 Note is delivered by Purchaser to the Company (the “Purchase Price Date”).\nThe 2022 Note includes an original issue discount of $168,291.00 along with $20,000.00 for Investor’s fees, costs and other transaction\nexpenses incurred in connection with the purchase and sale of the Note. The Company may prepay all or a portion of the 2022 Note at any\ntime by paying 120% of the outstanding balance elected for pre-payment. The Investor has the right to redeem the 2022 Note at any time\nninety (90) days after the Purchase Price Date, subject to maximum monthly redemption amount of $600,000. Redemptions may be satisfied\nin cash or Pre-reverse Ordinary Shares at the Company’s election during the period ninety (90) days after the Purchase Price Date\nand six months after the Purchase Price Date. However, the Company will be required to pay the redemption amount in cash, in the event\nthere is an Equity Conditions Failure (as defined in the Note). If Company chooses to satisfy a redemption in Pre-reverse Ordinary Shares,\nsuch Pre-reverse Ordinary Shares shall be issued at a redemption conversion price of the lower of (i) the Lender Conversion Price (as\ndefined in the Note) which is initially $0.30 and (ii) 80% of the average of the lowest VWAP during the fifteen (15) trading days immediately\npreceding the redemption notice is delivered. In addition, Streeterville agreed that in any given calendar week (being from Sunday to\nSaturday of that week), the number of Pre-reverse Ordinary Shares sold by it in the open market will not be more than fifteen percent\n(15%) of the weekly trading volume for the Pre-reverse Ordinary Shares during any such week.\n\n \n\n89\n\n \n\n \n\nUnder the Purchase Agreement,\nwhile the 2022 Note is outstanding, the Company agreed to keep adequate public information available and maintain its Nasdaq listing.\nUpon the occurrence of a Trigger Event (as defined in the 2022 Note), Streeterville shall have the right to increase the balance of the\n2022 Note by 15% for Major Trigger Event (as defined in the 2022 Note) and 5% for Minor Trigger Event (as defined in the 2022 Note).\nIn addition, the 2022 Note provides that upon occurrence of an Event of Default, the interest rate shall accrue on the outstanding balance\nat the rate equal to the lesser of 15% per annum or the maximum rate permitted under applicable law.\n\n \n\nAs of the date of this annual\nreport, Streeterville has redeemed all original principal amount and interest fee and the Company has issued 4,748,930 Ordinary Shares\n(pre-2022 Reverse Split) to Streeterville upon conversion of the note issued on March 16, 2022.\n\n \n\nThe form of the Purchase\nAgreement and the form of the Note are filed as Exhibits 10.1 and 10.2 to the Current Report on Form 6-K filed with the Commission on\nMarch 16, 2022, and such documents are incorporated herein by reference. The foregoing is only a brief description of the material terms\nof the Purchase Agreement and the Note, and does not purport to be a complete description of the rights and obligations of the parties\nthereunder and is qualified in its entirety by reference to such exhibits.\n\n \n\nThe Securities Purchase Agreement relating\nto the offering and sale of 1,625,798 Ordinary Shares.\n\n \n\nOn September 22, 2022, the\nCompany entered into certain securities purchase agreement (the “SPA”) with Zhijun Xiao, a non-affiliate non-U.S. person,\npursuant to which Mr. Xiao agreed to purchase 1,625,798 Ordinary Shares (pre-2023 Reverse Split) of the Company, par value $0.08 per\nshare at a per share purchase price of $1.35. The gross proceeds of this transaction are $2,194,827.3.\n\n \n\nOn October 11, 2022, the\nCompany received the funds from Zhijun Xiao and issued the Ordinary Shares in reliance of the exemption from the registration requirements\nof the Securities Act of 1933, as amended, pursuant to Regulation S promulgated thereunder. On October 11, 2022, the transaction contemplated\nby the SPA closed since all the closing conditions of the SPA have been satisfied or waived.\n\n \n\nThe form of the securities\npurchase agreement is filed as Exhibit 10.1 to the Current Report on Form 6-K filed with the Commission on September 27, 2022, and such\ndocument is incorporated herein by reference.\n\n \n\nThe foregoing is only a brief\ndescription of the material terms of the securities purchase agreement, and does not purport to be a complete description of the rights\nand obligations of the parties thereunder and is qualified in its entirety by reference to such exhibit.\n\n \n\nThe Securities Purchase Agreement with Streeterville\nCapital, LLC (December 2022)\n\n \n\nOn December 19, 2022, the\nCompany entered into a securities purchase agreement (the “2022 Streeterville Purchase Agreement”) with Streeterville Capital,\nLLC, a Utah limited liability company, pursuant to which the Company issued Streeterville an unsecured promissory note on December 19,\n2022 in the original principal amount of $1,595,000.00 (the “Note”), convertible into Ordinary Shares, $0.08 par value per\nshare, of the Company, for $1,500,000.00 in gross proceeds.\n\n \n\nThe Note bears interest at\na rate of 6% per annum compounding daily. All outstanding principal and accrued interest on the Note will become due and payable twelve\nmonths after the purchase price of the Note is delivered by Purchaser to the Company (the “Purchase Price Date”). The Note\nincludes an original issue discount of $95,000.00 along with $20,000.00 for Investor’s fees, costs and other transaction expenses\nincurred in connection with the purchase and sale of the Note. The Company may prepay all or a portion of the Note at any time by paying\n120% of the outstanding balance elected for pre-payment. The Investor has the right to redeem the Note at on the earlier of the date\nthat is six (6) months from the Purchase Price Date and the effective date of the first prospectus supplement filed in connection with\nthe Note, subject to maximum monthly redemption amount of $425,000.00. Redemptions may be satisfied in cash or Ordinary Shares at the\nCompany’s election. However, the Company will be required to pay the redemption amount in cash, in the event there is an Equity\nConditions Failure (as defined in the Note). If Company chooses to satisfy a redemption in Ordinary Shares, such Ordinary Shares shall\nbe issued at a redemption conversion price of the lower of (i) the Lender Conversion Price (as defined in the Note) which is initially\n$0.60 and (ii) 80% of the average of the lowest VWAP during the fifteen (15) trading days immediately preceding the redemption notice\nis delivered. In addition, Streeterville agreed that in any given calendar week (being from Sunday to Saturday of that week), the number\nof Ordinary Shares sold by it in the open market will not be more than fifteen percent (15%) of the weekly trading volume for the Ordinary\nShares during any such week.\n\n \n\n90\n\n \n\n \n\nUnder the 2022 Streeterville\nPurchase Agreement, while the Note is outstanding, the Company agreed to keep adequate public information available and maintain its\nNasdaq listing. Upon the occurrence of a Trigger Event (as defined in the Note), Streeterville shall have the right to increase the balance\nof the Note by 15% for Major Trigger Event (as defined in the Note) and 5% for Minor Trigger Event (as defined in the Note). In addition,\nthe Note provides that upon occurrence of an Event of Default, the interest rate shall accrue on the outstanding balance at the rate\nequal to the lesser of 15% per annum or the maximum rate permitted under applicable law.\n\n \n\nIn addition, until the earlier\nof (i) the date that is six (6) months from the Purchase Price Date and (ii) the date that Company has filed one (1) or more prospectus\nsupplement(s) relating to the sale of up to $1,595,000 of Ordinary Shares, the Company should, within than three (3) trading days after\nat least $100,000.00 becomes available for the Company to register its securities in accordance with General Instruction I.B.5 of Form\nF-3, file a prospectus supplement to its registration statement on Form F-3 (File No. 333-252664) (the “Shelf”), provided\nthat, each prospectus supplement should at least register $100,000.00 of Ordinary Shares. In any event, Company agreed to cause at least\none prospectus supplement to the Shelf to be filed in connection with the Note on or before March 24, 2023. The obligation of the Company\nto file prospectus supplements for registration statement will continue until the $1,595,000 of Ordinary Shares issuable upon conversion\nof the Note are registered on an effective registration statement.\n\n \n\nAs of the date of this annual\nreport, the balance of the Note has been all converted into 1,483,313 Ordinary Shares to Streeterville.\n\n \n\nThe form of the Streeterville\nPurchase Agreement and the form of the Note are filed as Exhibits 10.1 and 10.2 to the Current Report on Form 6-K filed with the Commission\non December 23, 2022, and such documents are incorporated herein by reference. The foregoing is only a brief description of the material\nterms of the Streeterville Purchase Agreement and the Note, and does not purport to be a complete description of the rights and obligations\nof the parties thereunder and is qualified in its entirety by reference to such exhibits.\n\n \n\nThe Securities Purchase Agreement with Rising\nSun Capital Ltd.\n\n \n\nOn February 22, 2023, the\nCompany entered into certain securities purchase agreement with Rising Sun Capital Ltd., a limited liability company organized under\nthe laws of Australia, pursuant to which Rising Sun Capital Ltd. agreed to purchase 1,724,138 Ordinary Shares (pre-2023 Reverse Split)\nof the Company, par value $0.08 per share at a per share purchase price of $0.58. The gross proceeds of this transaction are approximately\n$1 million. Upon the issuance date of these condensed consolidated financial statements, the transaction has not been closed and the\nCompany has not received the proceeds.\n\n \n\nThe form of the securities\npurchase agreement is filed as Exhibit 10.1 to the Current Report on Form 6-K filed with the Commission on February 28, 2023, and such\ndocument is incorporated herein by reference.\n\n \n\nThe foregoing is only a brief\ndescription of the material terms of the securities purchase agreement, and does not purport to be a complete description of the rights\nand obligations of the parties thereunder and is qualified in its entirety by reference to such exhibit.\n\n \n\n91\n\n \n\n \n\nThe Securities Purchase Agreement with Streeterville\nCapital, LLC (March 2023)\n\n \n\nOn March 7, 2023, the Company\nentered into a securities purchase agreement (the “2023 Streeterville Purchase Agreement”) with Streeterville Capital, LLC,\na Utah limited liability company, pursuant to which the Company issued Streeterville an unsecured promissory note on March 7, 2023 in\nthe original principal amount of $2,126,666.67 (the “2023 Note”), convertible into Ordinary Shares, $0.08 par value per share,\nof the Company, for $2,000,000.00 in gross proceeds.\n\n \n\nThe 2023 Note bears interest\nat a rate of 6% per annum compounding daily. All outstanding principal and accrued interest on the 2023 Note will become due and payable\ntwelve months after the purchase price of the 2023 Note is delivered by Purchaser to the Company (the “Closing Date”). The\n2023 Note includes an original issue discount of $126,666.67 along with $20,000.00 for Investor’s fees, costs and other transaction\nexpenses incurred in connection with the purchase and sale of the 2023 Note. The Company may prepay all or a portion of the 2023 Note\nat any time by paying 120% of the outstanding balance elected for pre-payment. The Investor has the right to redeem the 2023 Note at\non the earlier of the date that is six (6) months from the Closing Date and the effective date of the first prospectus supplement filed\nin connection with the 2023 Note, subject to maximum monthly redemption amount of $550,000.00. Redemptions may be satisfied in cash or\nOrdinary Shares at the Company’s election. However, the Company will be required to pay the redemption amount in cash, in the event\nthere is an Equity Conditions Failure (as defined in the 2023 Note). If Company chooses to satisfy a redemption in Ordinary Shares, such\nOrdinary Shares shall be issued at a redemption conversion price of the lower of (i) the Lender Conversion Price (as defined in the 2023\nNote) which is initially $0.60 and (ii) 80% of the average of the lowest VWAP during the fifteen (15) trading days immediately preceding\nthe redemption notice is delivered. In addition, Streeterville agreed that in any given calendar week (being from Sunday to Saturday\nof that week), the number of Ordinary Shares sold by it in the open market will not be more than fifteen percent (15%) of the weekly\ntrading volume for the Ordinary Shares during any such week.\n\n \n\nUnder the 2023 Streeterville\nPurchase Agreement, while the 2023 Note is outstanding, the Company agreed to keep adequate public information available and maintain\nits Nasdaq listing. Upon the occurrence of a Trigger Event (as defined in the 2023 Note), Streeterville shall have the right to increase\nthe balance of the 2023 Note by 15% for Major Trigger Event (as defined in the 2023 Note) and 5% for Minor Trigger Event (as defined\nin the 2023 Note).\n\n \n\nIn addition, the 2023 Note\nprovides that upon occurrence of an Event of Default, the interest rate shall accrue on the outstanding balance at the rate equal to\nthe lesser of 15% per annum or the maximum rate permitted under applicable law.\n\n \n\nIn addition, until the earlier\nof (i) the date that is six (6) months from the Closing Date and (ii) the date that Company has filed one (1) or more prospectus supplement(s)\nrelating to the sale of up to $2,126,666.67 of Ordinary Shares, the Company should, within than three (3) trading days after at least\n$100,000.00 becomes available for the Company to register its securities in accordance with General Instruction I.B.5 of Form F-3, file\na prospectus supplement to its registration statement on Form F-3 (File No. 333-252664) (the “Shelf”), provided that, each\nprospectus supplement should at least register $100,000.00 of Ordinary Shares. In any event, Company agreed to cause at least one prospectus\nsupplement to the Shelf to be filed in connection with the 2023 Note on or before March 24, 2023.\n\n \n\nThe obligation of the Company\nto file prospectus supplements for registration statement will continue until the $2,126,666.67 of Ordinary Shares issuable upon conversion\nof the 2023 Note are registered on an effective registration statement. In the event the $2,126,666.67 of Ordinary Shares have not been\nregistered under the Shelf by the date that is six (6) months from the Closing Date, then on such date the Outstanding Balance will automatically\nincrease by an amount equal to five percent (5%) multiplied by the portion of original principal amount that was not registered under\nthe Shelf.\n\n \n\nOn March 9, 2023, the transaction\ncontemplated by the 2023 Streeterville Purchase Agreement was closed as all the closing conditions of as set forth therein have been\nsatisfied.\n\n \n\nAs of the date of this annual\nreport, Streeterville has redeemed for an amount of $2,194,807 and the Company has issued 8,404,945 Ordinary Shares (pre-2023 Reverse\nSplit) to Streeterville upon conversion of the note issued on March 7, 2023. The Company has filed a prospectus supplement to its registration\nstatement on Form F-3 (File No. 333-252664) relating to the sale of up to $1,374,712 of Ordinary Shares on March 27, 2023.\n\n \n\n92\n\n \n\n \n\nThe form of the 2023 Streeterville\nPurchase Agreement and the form of the 2023 Note are filed as Exhibits 10.1 and 10.2 to the Current Report on Form 6-K filed with the\nCommission on March 23, 2023, and such documents are incorporated herein by reference. The foregoing is only a brief description of the\nmaterial terms of the 2023 Streeterville Purchase Agreement and the 2023 Note, and does not purport to be a complete description of the\nrights and obligations of the parties thereunder and is qualified in its entirety by reference to such exhibits.\n\n \n\nThe Securities Purchase Agreement with Streeterville\nCapital, LLC (December 2023)\n\n \n\nOn December 13, 2023, the\nCompany entered into a securities purchase agreement (the “December 2023 Purchase Agreement”) with Streeterville Capital,\nLLC (the “Investor”), pursuant to which the Company issued the Investor an unsecured promissory note on December 13, 2023\nin the original principal amount of $531,666.67 (the “December 2023 Note” ) convertible into Ordinary Shares, for $500,000.00\nin gross proceeds.\n\n \n\nThe December 2023 Note bears\ninterest at a rate of 6% per annum compounding daily. All outstanding principal and accrued interest on the December 2023 Note will become\ndue and payable twelve months after the purchase price of the December 2023 Note is delivered by Purchaser to the Company (the “December\n2023 Note Closing Date”). The December 2023 Note includes an original issue discount of $ $31,666.67 along with $20,000.00 for\nInvestor’s fees, costs and other transaction expenses incurred in connection with the purchase and sale of the March 2024 Note.\nThe Company may prepay all or a portion of the December 2023 Note at any time by paying 120% of the outstanding balance elected for pre-payment.\nThe Investor has the right to redeem the Note at on the earlier of the date that is six (6) months from the December 2023 Note Closing\nDate and the effective date of the first prospectus supplement filed in connection with the December 2023 Note, subject to maximum monthly\nredemption amount of $200,000.00. Redemptions may be satisfied in cash or Ordinary Shares at the Company’s election. However, the\nCompany will be required to pay the redemption amount in cash, in the event there is an Equity Conditions Failure (as defined in the\nDecember 2023 Note). If Company chooses to satisfy a redemption in Ordinary Shares, such Ordinary Shares shall be issued at a redemption\nconversion price of the lower of (i) the Lender Conversion Price (as defined in the December 2023 Note) which is initially $3.00 and\n(ii) 80% of the average of the lowest VWAP during the fifteen (15) trading days immediately preceding the redemption notice is delivered.\nIn addition, the Investor agreed that in any given calendar week (being from Sunday to Saturday of that week), the number of Ordinary\nShares sold by it in the open market will not be more than fifteen percent (15%) of the weekly trading volume for the Ordinary Shares\nduring any such week.\n\n \n\nUnder the December 2023 Purchase\nAgreement, while the December 2023 Note is outstanding, the Company agreed to keep adequate public information available and maintain\nits Nasdaq listing. Upon the occurrence of a Trigger Event (as defined in the December 2023 Note), the Investor shall have the right\nto increase the balance of the December 2023 Note by 15% for Major Trigger Event (as defined in the December 2023 Note) and 5% for Minor\nTrigger Event (as defined in the December 2023 Note).\n\n \n\nIn addition, the December\n2023 Note provides that upon occurrence of an Event of Default, the interest rate shall accrue on the outstanding balance at the rate\nequal to the lesser of 15% per annum or the maximum rate permitted under applicable law.\n\n \n\nOn December 16, 2023, the\ntransaction contemplated by the December 2023 Purchase Agreement was closed as all the closing conditions of as set forth therein have\nbeen satisfied.\n\n \n\nAs of the date of this annual\nreport, Streeterville has not redeemed any amount under the note issued on December 13, 2023.  \n\n \n\nThe form of the December\n2023 Securities Purchase Agreement and the form of the December 2023 Note are filed as Exhibits 10.3 and 10.6 to the Current Report on\nForm 6-K filed with the Commission on May 14, 2024, and such documents are incorporated herein by reference. The foregoing is only a\nbrief description of the material terms of the December 2023 Securities Purchase Agreement and the December 2023 Note, and does not purport\nto be a complete description of the rights and obligations of the parties thereunder and is qualified in its entirety by reference to\nsuch exhibits.\n\n \n\n93\n\n \n\n \n\nThe Securities Purchase Agreement with Streeterville\nCapital, LLC (March 2024)\n\n \n\nOn March 27, 2024, the Company\nentered into a securities purchase agreement (the “March 2024 Purchase Agreement”) with the Investor, pursuant to which the\nCompany issued the Investor an unsecured promissory note on March 27, 2024 in the original principal amount of $531,666.67 (the “March\n2024 Note”), convertible into Ordinary Shares of the Company, for $500,000.00 in gross proceeds.\n\n \n\nThe March 2024 Note bears\ninterest at a rate of 6% per annum compounding daily. All outstanding principal and accrued interest on the March 2024 Note will become\ndue and payable twelve months after the purchase price of the March 2024 Note is delivered by Purchaser to the Company (the “March\n2024 Note Closing Date”). The March 2024 Note includes an original issue discount of $ $31,666.67 along with $20,000.00 for Investor’s\nfees, costs and other transaction expenses incurred in connection with the purchase and sale of the March 2024 Note. The Company may\nprepay all or a portion of the March 2024 Note at any time by paying 120% of the outstanding balance elected for pre-payment. The Investor\nhas the right to redeem the March 2024 Note at on the earlier of the date that is six (6) months from the March 2024 Note Closing Date\nand the effective date of the first prospectus supplement filed in connection with the March 2024 Note, subject to maximum monthly redemption\namount of $200,000.00. Redemptions may be satisfied in cash or Ordinary Shares at the Company’s election. However, the Company\nwill be required to pay the redemption amount in cash, in the event there is an Equity Conditions Failure (as defined in the March 2024\nNote). If Company chooses to satisfy a redemption in Ordinary Shares, such Ordinary Shares shall be issued at a redemption conversion\nprice of the lower of (i) the Lender Conversion Price (as defined in the March 2024 Note) which is initially $3.00 and (ii) 80% of the\naverage of the lowest VWAP during the fifteen (15) trading days immediately preceding the redemption notice is delivered. In addition,\nthe Investor agreed that in any given calendar week (being from Sunday to Saturday of that week), the number of Ordinary Shares sold\nby it in the open market will not be more than fifteen percent (15%) of the weekly trading volume for the Ordinary Shares during any\nsuch week.\n\n \n\nUnder the March 2024 Purchase\nAgreement, while the March 2024 Note is outstanding, the Company agreed to keep adequate public information available and maintain its\nNasdaq listing. Upon the occurrence of a Trigger Event (as defined in the March 2024 Note), the Investor shall have the right to increase\nthe balance of the March 2024 Note by 15% for Major Trigger Event (as defined in the March 2024 Note) and 5% for Minor Trigger Event\n(as defined in the March 2024 Note).\n\n \n\nIn addition, the March 2024\nNote provides that upon occurrence of an Event of Default, the interest rate shall accrue on the outstanding balance at the rate equal\nto the lesser of 15% per annum or the maximum rate permitted under applicable law.\n\n \n\nOn March 29, 2024, the transaction\ncontemplated by the March 2024 Purchase Agreement was closed as all the closing conditions of as set forth therein have been satisfied.\n\n \n\nAs of the date of this annual\nreport, Streeterville has not redeemed any amount under the note issued on March 27, 2024.  \n\n \n\nThe form of the March 2024\nSecurities Purchase Agreement and the form of the March 2024 Note are filed as Exhibits 10.2 and 10.5 to the Current Report on Form 6-K\nfiled with the Commission on May 14, 2024, and such documents are incorporated herein by reference. The foregoing is only a brief description\nof the material terms of the March 2024 Securities Purchase Agreement and the March 2024 Note, and does not purport to be a complete\ndescription of the rights and obligations of the parties thereunder and is qualified in its entirety by reference to such exhibits.\n\n \n\nThe Securities Purchase Agreement with Streeterville\nCapital, LLC (May 2024)\n\n \n\nOn May 9, 2024, China SXT\nPharmaceuticals, Inc., a British Virgin Islands company (the “Company”) entered into a securities purchase agreement (the\n“May 2024 Purchase Agreement”) with Streeterville Capital, LLC, a Utah limited liability company (the “Investor”),\npursuant to which the Company issued the Investor an unsecured promissory note on May 9, 2024 in the original principal amount of $797,500.00\n(the “May 2024 Note”), convertible into ordinary shares, $0.08 par value per share, of the Company (the “Ordinary Shares”),\nfor $750,000.00 in gross proceeds.\n\n \n\n94\n\n \n\n \n\nThe May 2024 Note bears interest\nat a rate of 6% per annum compounding daily. All outstanding principal and accrued interest on May 2024 Note will become due and payable\ntwelve months after the purchase price of May 2024 Note is delivered by Purchaser to the Company (the “May 2024 Note Closing Date”).\nThe May 2024 Note includes an original issue discount of $47,500.00 along with $20,000.00 for Investor’s fees, costs and other\ntransaction expenses incurred in connection with the purchase and sale of the May 2024 Note. The Company may prepay all or a portion\nof the May 2024 Note at any time by paying 120% of the outstanding balance elected for pre-payment. The Investor has the right to redeem\nthe May 2024 Note at on the earlier of the date that is six (6) months from the May 2024 Note Closing Date and the effective date of\nthe first prospectus supplement filed in connection with the May 2024 Note, subject to maximum monthly redemption amount of $300,000.00.\nRedemptions may be satisfied in cash or Ordinary Shares at the Company’s election. However, the Company will be required to pay\nthe redemption amount in cash, in the event there is an Equity Conditions Failure (as defined in the May 2024 Note). If Company chooses\nto satisfy a redemption in Ordinary Shares, such Ordinary Shares shall be issued at a redemption conversion price of the lower of (i)\nthe Lender Conversion Price (as defined in the May 2024 Note) which is initially $3.00 and (ii) 80% of the average of the lowest VWAP\nduring the fifteen (15) trading days immediately preceding the redemption notice is delivered. In addition, the Investor agreed that\nin any given calendar week (being from Sunday to Saturday of that week), the number of Ordinary Shares sold by it in the open market\nwill not be more than fifteen percent (15%) of the weekly trading volume for the Ordinary Shares during any such week.\n\n \n\nUnder the May 2024 Purchase\nAgreement, while the May 2024 Note is outstanding, the Company agreed to keep adequate public information available and maintain its\nNasdaq listing. Upon the occurrence of a Trigger Event (as defined in the May 2024 Note), the Investor shall have the right to increase\nthe balance of the May 2024 Note by 15% for Major Trigger Event (as defined in the May 2024 Note ) and 5% for Minor Trigger Event (as\ndefined in the May 2024 Note).\n\n \n\nIn addition, the May 2024\nNote provides that upon occurrence of an Event of Default, the interest rate shall accrue on the outstanding balance at the rate equal\nto the lesser of 15% per annum or the maximum rate permitted under applicable law.\n\n \n\nOn May 13, 2024, the transaction\ncontemplated by the May 2024 Purchase Agreement was closed as all the closing conditions of as set forth therein have been satisfied\n\n \n\nAs of the date of this annual\nreport, Streeterville has not redeemed any amount under the note issued on May 9, 2024. \n\n \n\nThe form of the May 2024\nSecurities Purchase Agreement and the form of the May 2024 Note are filed as Exhibits 10.1 and 10.4 to the Current Report on Form 6-K\nfiled with the Commission on May 14, 2024, and such documents are incorporated herein by reference. The foregoing is only a brief description\nof the material terms of the May 2024 Securities Purchase Agreement and the May 2024 Note, and does not purport to be a complete description\nof the rights and obligations of the parties thereunder and is qualified in its entirety by reference to such exhibits.\n\n \n\nThe Securities Purchase Agreement with certain\ninvestors (January 2025)\n\n \n\nOn January 21, 2025, the\nCompany entered into a securities purchase agreement (the “January 2025 Securities Purchase Agreement”) to sell 14,200,000\nordinary shares at $0.20 per share in a PIPE offering (the “January 2025 PIPE”). Investors received warrants (the “January\n2025 PIPE Warrants”) for 200% of their purchased shares. Separately, lenders who had provided a $1.84 million one-month loan on\nJanuary 15, 2025, surrendered their repayment rights in exchange for PIPE shares through a January 21, 2025 surrender agreement. This\ntransaction effectively converted the debt into equity as part of the January 2025 PIPE financing arrangement. On March 13, 2025, the\nCompany entered into a warrant exchange agreement (the “2025 Warrant Exchange Agreement”) with holders of 28,400,000 January\n2025 PIPE Warrants issued on January 21, 2025. These January 2025 PIPE Warrants, adjusted for a reverse stock split and reset, were exercisable\nfor 1.52 ordinary shares each (totaling 43,134,871 shares at $0.66 per share). Under the agreement, the holders surrendered all 28,400,000\nJanuary 2025 PIPE Warrants for cancellation, and in exchange, the Company issued 11,225,000 ordinary shares to them.\n\n \n\n95\n\n \n\n \n\nThe form of the January 2025\nSecurities Purchase Agreement, the form of the January 2025 PIPE Warrants, the relevant surrender letter and loan agreement are filed\nas Exhibits 99.1, 99.2, 99.3 and 99.4 to the Current Report on Form 6-K filed with the Commission on January 27, 2025, and such documents\nare incorporated herein by reference. Furthermore, the form of the 2025 Warrant Exchange Agreement is filed as Exhibit 99.1 to the Current\nReport on Form 6-K filed with the Commission on March 19, 2025.\n\n \n\nThe foregoing is only a brief\ndescription of the material terms of the January 2025 Securities Purchase Agreement, January 2025 PIPE Warrants and the 2025 Warrant\nExchange Agreement, and does not purport to be a complete description of the rights and obligations of the parties thereunder and is\nqualified in its entirety by reference to such exhibits.\n\n \n\nThe Securities Purchase Agreement with an\ninvestor (May 2025)\n\n \n\nOn May 5, 2024, China SXT\nPharmaceuticals, Inc., a British Virgin Islands company (the “Company”) entered into a securities purchase agreement (the\n“May 2025 Purchase Agreement”) with an investor, pursuant to which the Company agreed to sell and issue 200,000 Ordinary\nShares (the “Ordinary Shares”), with no par value, of the Company, for $100,000.00 in gross proceeds.\n\n \n\nOn May 12, 2025, the transaction\ncontemplated by the May 2025 Purchase Agreement was closed as all the closing conditions of as set forth therein have been satisfied.\n\n \n\nAs of the date of this annual\nreport, the Ordinary Shares to be issued in the offering were issued on May 12, 2025pursuant to a prospectus supplement dated as of May\n5, 2025, which was filed with the SEC, in connection with a takedown from the Company’s shelf registration statement on Form F-3\n(File No. 333-282776), which became effective on November 4, 2024, and the base prospectus dated as of October 22, 2024 contained in\nsuch registration statement.\n\n \n\nThe foregoing is only a brief\ndescription of the material terms of the May 2025 Securities Purchase Agreement, and does not purport to be a complete description of\nthe rights and obligations of the parties thereunder and is qualified in its entirety by reference to such exhibits.\n\n \n\nThe Securities Purchase Agreement with several\ninvestors (May 2025)\n\n \n\nOn May 16, 2024, China SXT\nPharmaceuticals, Inc., a British Virgin Islands company (the “Company”) entered into a securities purchase agreement (the\n“Second May 2025 Purchase Agreement”) with an investor, pursuant to which the Company agreed to sell and issue (i) 10,000,000\nOrdinary Shares (the “Ordinary Shares”), with no par value, of the Company; and (ii) Ordinary Share purchase warrants to\npurchase up to 100,000,000 Ordinary Shares (the “Warrants”); and (iii) up to 100,000,000 Ordinary Shares issuable upon exercise\nof the Warrants (the “Underlying Shares”). Each Ordinary Share is being sold together with two associated Warrants, each\nto purchase one Ordinary Share at a combined offering price of $0.51 per Ordinary Share and associated Warrants.\n\n \n\nFrom May 30 to June 2, 2025,\ncertain investors (the “Investors”) have exercised their Warrants under the alternate cashless exercise provision. According\nto which, the Investors may exercise the Warrants in exchange for 0.9 times the number of Ordinary Shares they would receive upon a standard\ncash exercise. Accordingly, the Company has cancelled the Warrants that were exercisable into 100,000,000 ordinary shares, and issued\na total of 90,000,000 Underlying Shares to such Investors. As of June 10, 2025, the Company’s total issued and outstanding number\nof shares were 116,027,758 Ordinary Shares.\n\n \n\nAs of the date of this annual\nreport, the Ordinary Shares and the Underlying Shares pursuant to the Warrants to be issued in the offering were issued pursuant to a\nprospectus supplement dated as of May 16, 2025, which was filed with the SEC, in connection with a takedown from the Company’s\nshelf registration statement on [Form\nF-3](https://www.sec.gov/Archives/edgar/data/1723980/000121390024089689/ea0216567-f3_chinasxtpharma.htm) (File No. 333-282776), which became effective on November 4, 2024, and the base prospectus dated as of October 22, 2024\ncontained in such registration statement.\n\n \n\n96\n\n \n\n \n\nThe foregoing is only a brief\ndescription of the material terms of the Second May 2025 Securities Purchase Agreement, and does not purport to be a complete description\nof the rights and obligations of the parties thereunder and is qualified in its entirety by reference to such exhibits.\n\n \n\nThe Securities Purchase Agreement with certain\ninstitutional investor (January 2026)\n\n \n\nOn January 9, 2026, China\nSXT Pharmaceuticals, Inc. (the “Company”) entered into a securities purchase agreement (the “January 2026 Securities\nPurchase Agreement”) with certain institutional investor (“Purchaser,” together with the Company, the “Parties”)\nin connection with a registered direct offering for the offer and sale of 12,000,000 Class A Ordinary Shares and pre-funded warrants\nto purchase 54,666,666 Class A Ordinary Shares (“Pre-Funded Warrants”), in the aggregate (such offering, the “Offering”).\nPursuant to the January 2026 Securities Purchase Agreement, the Company also agreed to, amongst other things, adjustment terms in the\nPre-Funded Warrants, issuance of the shares underlying the Pre-Funded Warrants upon the exercise of the Pre-Funded Warrants, in accordance\nwith the terms of the Pre-Funded Warrants, and the Parties agreed to customary representations and warranties and agreements and indemnification\nrights and obligations.\n\n \n\nThe Pre-Funded Warrants have\nan exercise price of $0.001 per share, and each Pre-Funded Warrant is exercisable for one Class A Ordinary Share (the shares underlying\nthe Pre-Funded Warrants, the “Warrant Shares”). A holder of the Pre-Funded Warrants (“Holder”) will not have\nthe right to exercise any portion of its Pre-Funded Warrants if the Holder, together with its affiliates, would beneficially own in excess\nof 9.99% of the number of Class A Ordinary Shares outstanding immediately after giving effect to such exercise. The Pre-Funded Warrants\nwill be immediately exercisable (subject to the aforementioned beneficial ownership limitation) and may be exercised at any time until\nall of the Pre-Funded Warrants are exercised in full. The Pre-Funded Warrant may be exercised, in whole or in part, at such time by means\nof a cashless exercise, under which cashless exercise the Holder is entitled to receive a number of Warrant Shares under the terms of\nthe Pre-Funded Warrants. The exercise price of the Pre-Funded Warrants is subject to adjustment for stock splits, stock dividends, stock\ncombinations, and similar capital transactions or such other event as further described in the Pre-Funded Warrants. As more fully described\nin the Securities Purchase Agreement, Holders are also entitled to acquire Purchase Rights (as defined in the Pre-Funded Warrants) upon\nsubsequent rights offerings conducted by the Company, are entitled to certain pro rata distributions, and may be issued shares of Common\nStock upon the occurrence of a Fundamental Transaction (as defined in the Pre-Funded Warrants).\n\n \n\nThe Class A Ordinary Shares,\nthe Pre-Funded Warrants, and the Warrant Shares were offered pursuant to the (i) registration statement on Form F-3 (File No. 333-291428)\nfiled with the SEC on November 10, 2025 and became effective by the SEC on December 1, 2025, and the (ii) prospectus supplement filed\nwith the SEC on January 12, 2026.\n\n \n\nThe Offering was consummated\non January 13, 2026. The Company received net proceeds of approximately $9,110,000 from the Offering, after deducting offering expenses\npayable by the Company, including placement agent fees, legal fees, and clearing fees. The Company intends to use the net proceeds from\nthe Offering for general corporate purposes.\n\n \n\nIn connection with the Offering,\nthe Company entered into a Placement Agency Agreement (the “Placement Agency Agreement”) on January 9, 2026 with Univest\nSecurities, LLC (“Univest”), pursuant to which Univest agreed to act as the exclusive placement agent in connection with\nthe Offering. As compensation to Univest, the Company paid Univest a cash fee of 7.0% of the aggregate gross proceeds raised in the Offering,\na non-accountable expense reimbursement in an amount equal to half percent (0.5%) of the gross proceeds of the Offering, and out-of-pocket\nexpenses, including legal counsel fees and disbursements, in an amount not to exceed an aggregate of $100,000.\n\n \n\nThe foregoing summaries of\nthe Securities Purchase Agreement, Pre-Funded Warrant, and Placement Agency Agreement do not purport to be complete and are subject to\nand are qualified in their entirety by copies of such documents filed as Exhibits 10.1, 4.1, and 10.2, respectively to the Current Report\non Form 6-K filed with the Commission on January 13, 2026.\n\n \n\n97\n\n \n\n \n\nThe Securities Purchase Agreement with several\ninvestors (April 2026)\n\n \n\nOn April 7, 2026, China SXT\nPharmaceuticals, Inc. (the “Company”) entered into a securities purchase agreement (the “April 2026 Securities Purchase\nAgreement”) with certain investors, pursuant to which the Company agreed to sell and issue 2,000,000 Class A Ordinary Shares of\nthe Company (the “Offering”).\n\n \n\nThe Class A Ordinary Shares\nto be issued in the Offering were issued pursuant to (i) the registration statement on Form F-3 (File No. 333-291428) filed with the\nSEC on November 10, 2025, which became effective on December 1, 2025, and (ii) the prospectus supplement filed with the SEC on April\n9, 2026. Aggregate gross proceeds to the Company in respect of the Offering were approximately $760,000, before deducting other offering\nexpenses payable by the Company.\n\n \n\nThe foregoing descriptions\nof the April 2026 Securities Purchase Agreement are not complete, and are qualified in their entireties by reference to the full text\nof such document, a copy of which is filed herewith as Exhibit 10.1 to the Report on Form 6-K filed with the Commission on April 9, 2026.\n\n \n\nThe Securities Purchase Agreement with certain\ninvestors (May 2026)\n\n \n\nOn May 1, 2026, China SXT\nPharmaceuticals, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “May 2026 Securities Purchase\nAgreement”) with several “non-U.S. Persons” (as defined in Regulation S of the Securities Act of 1933, as amended)\n(the “Purchasers”) for a private placement (the “Offering”) of (i) 3,500,000 Class A Ordinary Shares and (ii)\n3,500,000 warrants (the “Warrants”, the Class A Ordinary Shares underlying such Warrants, the “Warrant Shares”),\nwith each to purchase one (1) Class A Ordinary Share at an exercise price of $1.00 per share. The gross proceeds from this Offering were\n$3.5 million.\n\n \n\nThe Warrants contain customary\nadjustment mechanisms upon corporate actions such as share dividends, share splits and share combinations. The Warrants are exercisable\nupon issuance and will expire five years from their the issuance date of the Warrants (the “Initial Exercise Date”). The\nWarrants are exercisable for cash, and they may also be exercised on a cashless basis. Notwithstanding the foregoing, if at any time\nstarting on the 7th calendar day (the “Alternate Cashless Exercise Date”) following the Initial Exercise Date, in lieu of\nthe Class A Ordinary Shares to be issued in a Cashless Exercise pursuant to the formula above, the holder may, by delivery of a Notice\nof Exercise to the Company, alternatively exchange all, or any part, of the Warrants into such aggregate number of Class A Ordinary Shares\nequal to the product of (x) nine (9), multiplied by (y) such aggregate number of Class A Ordinary Shares underlying such portion of the\nWarrants to be exercised as specified in such applicable Notice of Exercise (each, an “Alternate Cashless Exercise”, and\nsuch aggregate number of Class A Ordinary Shares to be issued in such applicable Alternate Cashless Exercise, the “Alternate Cashless\nExercise Amount”).\n\n \n\nThe closing of the Offering\noccurred on May 2, 2026, when all the closing conditions of the Securities Purchase Agreement had been satisfied. The Company issued\nthe Shares and Warrants in exchange for gross proceeds of $3.5 million, before the deduction of customary expenses. The net proceeds\nto the Company from such Offering shall be used by the Company for working capital and general corporate purposes.\n\n \n\nThe Shares and Warrants were\nissued in reliance on Regulation S promulgated under the Securities Act of 1933, as amended, and the Purchasers represented that they\nwere not residents of the United States or “U.S. persons” as defined in Rule 902(k) of Regulation S and were not acquiring\nthe Shares or Warrants for the account or benefit of any U.S. person.\n\n \n\nThe foregoing description\nof the Warrants and the May 2026 Securities Purchase Agreement does not purport to be complete and is qualified in its entirety by reference\nto the full text of the May 2026 Securities Purchase Agreement, forms of which are attached hereto as Exhibits 4.1 and 10.1 to the Report\non Form 6-K filed with the Commission on May 4, 2026.\n\n \n\n10.D. Exchange Controls\n\n \n\n*British Virgin Islands*\n\n \n\nThere are currently no exchange\ncontrol regulations in the British Virgin Islands applicable to us or our shareholders.\n\n \n\n98\n\n \n\n \n\n*The PRC*\n\n \n\n*General administration of foreign exchange*\n\n \n\nThe principal regulation\ngoverning foreign currency exchange in the PRC is the Administrative Regulations of the PRC on Foreign Exchange (the “Foreign Exchange\nRegulations”), which were promulgated on January 29, 1996, became effective on April 1, 1996 and were last amended on August 5,\n2008. Under these rules, Renminbi is generally freely convertible for payments of current account items, such as trade- and service -related\nforeign exchange transactions and dividend payments, but not freely convertible for capital account items, such as capital transfer,\ndirect investment, investment in securities, derivative products or loans unless prior approval by competent authorities for the administration\nof foreign exchange is obtained. Under the Foreign Exchange Regulations, foreign-invested enterprises in the PRC may purchase foreign\nexchange without the approval of SAFE to pay dividends by providing certain evidentiary documents, including board resolutions, tax certificates,\nor for trade- and services-related foreign exchange transactions, by providing commercial documents evidencing such transactions.\n\n \n\n*Circular No. 75, Circular No. 37 and Circular\nNo. 13*\n\n \n\nCircular 37 was released\nby SAFE on July 4, 2014 and abolished Circular 75 which had been in effect since November 1, 2005. Pursuant to Circular 37, a PRC resident\nshould apply to SAFE for foreign exchange registration of overseas investments before it makes any capital contribution to a special\npurpose vehicle, or SPV, using his or her legitimate domestic or offshore assets or interests. SPVs are offshore enterprises directly\nestablished or indirectly controlled by domestic residents for the purpose of investment and financing by utilizing domestic or offshore\nassets or interests they legally hold. Following any significant change in a registered offshore SPV, such as capital increase, reduction,\nequity transfer or swap, consolidation or division involving domestic resident individuals, the domestic individuals shall amend the\nregistration with SAFE. Where an SPV intends to repatriate funds raised after completion of offshore financing to the PRC, it shall comply\nwith relevant PRC regulations on foreign investment and foreign debt management. A foreign-invested enterprise established through return\ninvestment shall complete relevant foreign exchange registration formalities in accordance with the prevailing foreign exchange administration\nregulations on foreign direct investment and truthfully disclose information on the actual controller of its shareholders.\n\n \n\nIf any shareholder who is\na PRC resident (as determined by the Circular No. 37) holds any interest in an offshore SPV and fails to fulfil the required foreign\nexchange registration with the local SAFE branches, the PRC subsidiaries of that offshore SPV may be prohibited from distributing their\nprofits and dividends to their offshore parent company or from carrying out other subsequent cross-border foreign exchange activities.\nThe offshore SPV may also be restricted in its ability to contribute additional capital to its PRC subsidiaries. Where a domestic resident\nfails to complete relevant foreign exchange registration as required, fails to truthfully disclose information on the actual controller\nof the enterprise involved in the return investment or otherwise makes false statements, the foreign exchange control authority may order\nthem to take remedial actions, issue a warning, and impose a fine of less than RMB300,000 on an institution or less than RMB50,000 on\nan individual.\n\n \n\nCircular 13 was issued by\nSAFE on February 13, 2015, and became effective on June 1, 2015. Pursuant to Circular 13, a domestic resident who makes a capital contribution\nto an SPV using his or her legitimate domestic or offshore assets or interests is no longer required to apply to SAFE for foreign exchange\nregistration of his or her overseas investments. Instead, he or she shall register with a bank in the place where the assets or interests\nof the domestic enterprise in which he or she has interests are located if the domestic resident individually seeks to make a capital\ncontribution to the SPV using his or her legitimate domestic assets or interests; or he or she shall register with a local bank at his\nor her permanent residence if the domestic resident individually seeks to make a capital contribution to the SPV using his or her legitimate\noffshore assets or interests.\n\n \n\n*Circular 19 and Circular 16*\n\n \n\nCircular 19 was promulgated\nby SAFE on March 30, 2015, and became effective on June 1, 2015. According to Circular 19, foreign exchange capital of foreign-invested\nenterprises shall be granted the benefits of Discretional Foreign Exchange Settlement (“Discretional Foreign Exchange Settlement”).\nWith Discretional Foreign Exchange Settlement, foreign exchange capital in the capital account of a foreign-invested enterprise for which\nthe rights and interests of monetary contribution has been confirmed by the local foreign exchange bureau, or for which book-entry registration\nof monetary contribution has been completed by the bank, can be settled at the bank based on the actual operational needs of the foreign-invested\nenterprise. The allowed Discretional Foreign Exchange Settlement percentage of the foreign exchange capital of a foreign-invested enterprise\nhas been temporarily set to be 100%. The Renminbi converted from the foreign exchange capital will be kept in a designated account and\nif a foreign-invested enterprise needs to make any further payment from such account, it will still need to provide supporting documents\nand to complete the review process with its bank.\n\n \n\n99\n\n \n\n \n\nFurthermore, Circular 19\nstipulates that foreign-invested enterprises shall make bona fide use of their capital for their own needs within their business scopes.\nThe capital of a foreign-invested enterprise and the Renminbi if obtained from foreign exchange settlement shall not be used for the\nfollowing purposes:\n\n \n\n \n●\ndirectly or indirectly\nused for expenses beyond its business scope or prohibited by relevant laws or regulations;\n\n \n \n \n\n \n●\ndirectly or indirectly\nused for investment in securities unless otherwise provided by relevant laws or regulations;\n\n \n \n \n\n \n●\ndirectly or indirectly\nused for entrusted loan in Renminbi (unless within its permitted scope of business), repayment of inter-company loans (including\nadvances by a third party) or repayment of bank loans in Renminbi that have been sub-lent to a third party; and\n\n \n \n \n\n \n●\ndirectly or indirectly\nused for expenses related to the purchase of real estate that is not for self-use (except for foreign-invested real estate enterprises).\n\n \n\nCircular 16 was issued by\nSAFE on June 9, 2016. Pursuant to Circular 16, enterprises registered in the PRC may also convert their foreign debts from foreign currency\nto Renminbi on a self-discretionary basis. Circular 16 provides an integrated standard for conversion of foreign exchange capital items\n(including but not limited to foreign currency capital and foreign debts) on a self-discretionary basis applicable to all enterprises\nregistered in the PRC. Circular 16 reiterates the principle that an enterprise’s Renminbi converted from foreign currency-denominated\ncapital may not be directly or indirectly used for purposes beyond its business scope or purposes prohibited by PRC laws or regulations,\nand such converted Renminbi shall not be provided as loans to non-affiliated entities.\n\n \n\nCirculars 16 and 19 address\nforeign direct investments into the PRC, and stipulate the procedures applicable to foreign exchange settlement. If and when circumstances\nrequire funds to be transferred to our WFOE in the PRC from our offshore entities, then any such transfer would be subject to Circulars\n16 and 19.\n\n \n\n10.E. Taxation\n\n \n\nPeople’s Republic of China Enterprise\nTaxation\n\n \n\nThe following brief description\nof Chinese enterprise laws is designed to highlight the enterprise-level taxation on our earnings, which will affect the amount of dividends,\nif any, we are ultimately able to pay to our shareholders.\n\n \n\nWe are a holding company\nincorporated in the British Virgin Islands and we gain substantial income by way of dividends paid to us from our PRC subsidiaries. The\nEIT Law and its implementation rules provide that China-sourced income of foreign enterprises, such as dividends paid by a PRC subsidiary\nto its equity holders that are non-resident enterprises, will normally be subject to PRC withholding tax at a rate of 10%, unless any\nsuch foreign investor’s jurisdiction of incorporation has a tax treaty with China that provides for a preferential tax rate or\na tax exemption.\n\n \n\nUnder the EIT Law, an enterprise\nestablished outside of China with a “de facto management body” within China is considered a “resident enterprise,”\nwhich means that it is treated in a manner similar to a Chinese enterprise for enterprise income tax purposes. Although the implementation\nrules of the EIT Law define “de facto management body” as a managing body that actually, comprehensively manage and control\nthe production and operation, staff, accounting, property and other aspects of an enterprise, the only official guidance for this definition\ncurrently available is set forth in SAT Notice 82, which provides guidance on the determination of the tax residence status of a Chinese-controlled\noffshore incorporated enterprise, defined as an enterprise that is incorporated under the laws of a foreign country or territory and\nthat has a PRC enterprise or enterprise group as its primary controlling shareholder. Although SXT Pharmaceuticals, Inc. does not have\na PRC enterprise or enterprise group as our primary controlling shareholder and is therefore not a Chinese-controlled offshore incorporated\nenterprise within the meaning of SAT Notice 82, in the absence of guidance specifically applicable to us, we have applied the guidance\nset forth in SAT Notice 82 to evaluate the tax residence status of SXT Pharmaceuticals, Inc. and its subsidiaries organized outside the\nPRC.\n\n \n\n100\n\n \n\n \n\nAccording to SAT Notice 82,\na Chinese-controlled offshore incorporated enterprise will be regarded as a PRC tax resident by virtue of having a “de facto management\nbody” in China and will be subject to PRC enterprise income tax on its worldwide income only if all of the following criteria are\nmet: (i) the places where senior management and senior management departments that are responsible for daily production, operation and\nmanagement of the enterprise perform their duties are mainly located within the territory of China; (ii) financial decisions (such as\nmoney borrowing, lending, financing and financial risk management) and personnel decisions (such as appointment, dismissal and salary\nand wages) are decided or need to be decided by organizations or persons located within the territory of China; (iii) main property,\naccounting books, corporate seal, the board of directors and files of the minutes of shareholders’ meetings of the enterprise are\nlocated or preserved within the territory of China; and (iv) one half (or more) of the directors or senior management staff having the\nright to vote habitually reside within the territory of China.\n\n \n\nWe believe that we do not\nmeet some of the conditions outlined in the immediately preceding paragraph. For example, as a holding company, the key assets and records\nof SXT Pharmaceuticals, including the resolutions and meeting minutes of our board of directors and the resolutions and meeting minutes\nof our shareholders, are located and maintained outside the PRC. In addition, we are not aware of any offshore holding companies with\na corporate structure similar to ours that has been deemed a PRC “resident enterprise” by the PRC tax authorities. Accordingly,\nwe believe that SXT Pharmaceuticals and its offshore subsidiaries should not be treated as a “resident enterprise” for PRC\ntax purposes if the criteria for “de facto management body” as set forth in SAT Notice 82 were deemed applicable to us. However,\nas the tax residency status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect\nto the interpretation of the term “de facto management body” as applicable to our offshore entities, we will continue to\nmonitor our tax status.\n\n \n\nThe implementation rules\nof the EIT Law provide that, (i) if the enterprise that distributes dividends is domiciled in the PRC or (ii) if gains are realized from\ntransferring equity interests of enterprises domiciled in the PRC, then such dividends or gains are treated as China-sourced income.\nIt is not clear how “domicile” may be interpreted under the EIT Law, and it may be interpreted as the jurisdiction where\nthe enterprise is a tax resident. Therefore, if we are considered as a PRC tax resident enterprise for PRC tax purposes, any dividends\nwe pay to our overseas shareholders which are non-resident enterprises as well as gains realized by such shareholders from the transfer\nof our shares may be regarded as China-sourced income and as a result become subject to PRC withholding tax at a rate of up to 10%. We\nare unable to provide a “will” opinion because it is more likely than not that the Company and its offshore subsidiaries\nwould be treated as a non-resident enterprise for PRC tax purposes because they do not meet some of the conditions out lined in SAT Notice.\nIn addition, we are not aware of any offshore holding companies with a corporate structure similar to ours that has been deemed a PRC\n“resident enterprise” by the PRC tax authorities as of the date of this annual report. Therefore we believe that it is possible\nbut highly unlikely that the income received by our overseas shareholders will be regarded as China-sourced income. See “Item 3.\nKey Information-D. Risk Factors-Risks Related to Doing Business in China-Under the enterprise Income Tax Law, we may be classified as\na “Resident enterprise” of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC\nstockholders.”\n\n \n\nOur company pays an EIT rate\nof 25% for WFOE, and 15% for Taizhou Suxuantang since April 2018 since it was qualified as a high-technology company. The EIT is calculated\nbased on the entity’s global income as determined under PRC tax laws and accounting standards. If the PRC tax authorities determine\nthat Taizhou Suxuantang a PRC resident enterprise for enterprise income tax purposes, we may be required to withhold a 10% withholding\ntax from dividends we pay to our shareholders that are non-resident enterprises. In addition, non-resident enterprise shareholders may\nbe subject to a 10% PRC withholding tax on gains realized on the sale or other disposition of our Ordinary Shares, if such income is\ntreated as sourced from within the PRC. It is unclear whether our non-PRC individual shareholders would be subject to any PRC tax on\ndividends or gains obtained by such non-PRC individual shareholders in the event we are determined to be a PRC resident enterprise. If\nany PRC tax were to apply to dividends or gains realized by non-PRC individuals, it would generally apply at a rate of 20% unless a reduced\nrate is available under an applicable tax treaty. However, it is also unclear whether non-PRC shareholders of the Company would be able\nto claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that the Company is treated\nas a PRC resident enterprise. There is no guidance from the PRC government to indicate whether or not any tax treaties between the PRC\nand other countries would apply in circumstances where a non-PRC company was deemed to be a PRC tax resident, and thus there is no basis\nfor expecting how tax treaty between the PRC and other countries may impact non-resident enterprises.\n\n \n\n101\n\n \n\n \n\nBritish Virgin Islands Taxation\n\n \n\nUnder British Virgin Islands\nlaw as currently in effect, there is no tax applicable to a holder of Class A Ordinary Shares who is not a resident of the British Virgin\nIslands on dividends paid with respect to the Class A Ordinary Shares and none of the holders of Class A Ordinary Shares are liable to\nthe British Virgin Islands for income tax on gains realized during that year on sale or disposal of such shares. The British Virgin Islands\ndoes not impose a withholding tax on dividends paid by a company incorporated or re-registered under the BVI Act.\n\n \n\nThere are no capital gains,\ngift or inheritance taxes levied by the British Virgin Islands on companies incorporated or re-registered under the BVI Act or persons\nnot resident in the British Virgin Islands. In addition, shares of companies incorporated or re-registered under the BVI Act are not\nsubject to transfer taxes, stamp duties or similar charges.\n\n \n\nThere is no income tax treaty\ncurrently in effect between the United States and the British Virgin Islands or between Taiwan and the British Virgin Islands.\n\n \n\nUnited States Federal Income Taxation\n\n \n\nWE URGE POTENTIAL PURCHASERS\nOF OUR CLASS A ORDINARY SHARES TO CONSULT THEIR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NON-U.S. TAX CONSEQUENCES\nOF PURCHASING, OWNING AND DISPOSING OF OUR CLASS A ORDINARY SHARES.\n\n \n\nThe following does not address\nthe tax consequences to any particular investor or to persons in special tax situations such as:\n\n \n\n●banks;\n\n \n\n●financial\ninstitutions;\n\n \n\n●insurance\ncompanies;\n\n \n\n●regulated\ninvestment companies;\n\n \n\n●real\nestate investment trusts;\n\n \n\n●broker-dealers;\n\n \n\n●traders\nthat elect to mark-to-market;\n\n \n\n●U.S.\nexpatriates;\n\n \n\n●tax-exempt\nentities;\n\n \n\n●persons\nliable for alternative minimum tax;\n\n \n\n●persons\nholding our Class A Ordinary Shares as part of a straddle, hedging, conversion or integrated\ntransaction;\n\n \n\n●persons\nthat actually or constructively own 10% or more of our voting shares (including by reason\nof owning our Class A Ordinary Shares);\n\n \n\n102\n\n \n\n \n\n●persons\nwho acquired our Class A Ordinary Shares pursuant to the exercise of any employee share option\nor otherwise as compensation; or\n\n \n\n●persons\nholding our Class A Ordinary Shares through partnerships or other pass-through entities.\n\n \n\nProspective purchasers are\nurged to consult their own tax advisors about the application of the U.S. federal income tax rules to their particular circumstances\nas well as the state, local, foreign and other tax consequences to them of the purchase, ownership and disposition of our Class A Ordinary\nShares.\n\n \n\n*Taxation of Dividends and Other Distributions\non our Class A Ordinary Shares*\n\n \n\nSubject to the passive foreign\ninvestment company rules discussed below, the gross amount of distributions made by us to you with respect to the Class A Ordinary Shares\n(including the amount of any taxes withheld therefrom) will generally be includable in your gross income as dividend income on the date\nof receipt by you, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined\nunder U.S. federal income tax principles). With respect to corporate U.S. Holders, the dividends will not be eligible for the dividends-received\ndeduction allowed to corporations in respect of dividends received from other U.S. corporations.\n\n \n\nWith respect to non-corporate\nU.S. Holders, including individual U.S. Holders, dividends will be taxed at the lower capital gains rate applicable to qualified dividend\nincome, provided that (1) the Class A Ordinary Shares are readily tradable on an established securities market in the United States,\nor we are eligible for the benefits of an approved qualifying income tax treaty with the United States that includes an exchange of information\nprogram, (2) we are not a passive foreign investment company (as discussed below) for either our taxable year in which the dividend is\npaid or the preceding taxable year, and (3) certain holding period requirements are met. Because there is no income tax treaty between\nthe United States and the British Virgin Islands, clause (1) above can be satisfied only if the Class A Ordinary Shares are readily tradable\non an established securities market in the United States. Under U.S. Internal Revenue Service authority, Class A Ordinary Shares are\nconsidered for purpose of clause (1) above to be readily tradable on an established securities market in the United States if they are\nlisted on the Nasdaq. You are urged to consult your tax advisors regarding the availability of the lower rate for dividends paid with\nrespect to our Class A Ordinary Shares, including the effects of any change in law after the date of this annual report.\n\n \n\nDividends will constitute\nforeign source income for foreign tax credit limitation purposes. If the dividends are taxed as qualified dividend income (as discussed\nabove), the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation will be limited to\nthe gross amount of the dividend, multiplied by the reduced rate divided by the highest rate of tax normally applicable to dividends.\nThe limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose,\ndividends distributed by us with respect to our Class A Ordinary Shares will constitute “passive category income” but could,\nin the case of certain U.S. Holders, constitute “general category income.”\n\n \n\nTo the extent that the amount\nof the distribution exceeds our current and accumulated earnings and profits (as determined under U.S. federal income tax principles),\nit will be treated first as a tax-free return of your tax basis in your Class A Ordinary Shares, and to the extent the amount of the\ndistribution exceeds your tax basis, the excess will be taxed as capital gain. We do not intend to calculate our earnings and profits\nunder U.S. federal income tax principles. Therefore, a U.S. Holder should expect that a distribution will be treated as a dividend even\nif that distribution would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above.\n\n \n\n*Taxation of Dispositions of Class A Ordinary\nShares*\n\n \n\nSubject to the passive foreign\ninvestment company rules discussed below, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition\nof a share equal to the difference between the amount realized (in U.S. dollars) for the share and your tax basis (in U.S. dollars) in\nthe Class A Ordinary Shares. The gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder, including an individual\nU.S. Holder, who has held the Class A Ordinary Shares for more than one year, you will be eligible for (a) reduced tax rates of 0% (for\nindividuals in the 10% or 15% tax brackets), (b) higher tax rates of 20% (for individuals in the 39.6% tax bracket) or (c) 15% for all\nother individuals. The deductibility of capital losses is subject to limitations. Any such gain or loss that you recognize will generally\nbe treated as United States source income or loss for foreign tax credit limitation purposes.\n\n \n\n103\n\n \n\n \n\n*Passive Foreign Investment Company*\n\n \n\nA non-U.S. corporation is\nconsidered a PFIC for any taxable year if either:\n\n \n\n \n●\nat least 75% of its gross\nincome is passive income; or\n\n \n \n \n\n \n●\nat least 50% of the value\nof its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce\nor are held for the production of passive income (the “asset test”).\n\n \n\nPassive income generally\nincludes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business)\nand gains from the disposition of passive assets. We will be treated as owning our proportionate share of the assets and earning our\nproportionate share of the income of any other corporation in which we own, directly or indirectly, at least 25% (by value) of the stock.\nIn determining the value and composition of our assets for purposes of the PFIC asset test, (1) the cash we raise in *our initial\npublic offering* will generally be considered to be held for the production of passive income and (2) the value of our assets\nmust be determined based on the market value of our Class A Ordinary Shares from time to time, which could cause the value of our non-passive\nassets to be less than 50% of the value of all of our assets (including the cash raised in *our initial public offering*)\non any particular quarterly testing date for purposes of the asset test.\n\n \n\nWe must make a separate determination\neach year as to whether we are a PFIC. The proceeds from our initial public offering, together with any other assets held for the production\nof passive income, it is possible that, for our 2016 taxable year or for any subsequent year, more than 50% of our assets may be assets\nheld for the production of passive income. We will make this determination following the end of any particular tax year. Although the\nlaw in this regard is unclear, we are treating Taizhou Suxuantang as being owned by us for United States federal income tax purposes,\nnot only because we control their management decisions, but also because we are entitled to the economic benefits associated with Taizhou\nSuxuantang, and as a result, we are treating Taizhou Suxuantang as our wholly-owned subsidiary for U.S. federal income tax purposes.\nIn particular, because the value of our assets for purposes of the asset test will generally be determined based on the market price\nof our Class A Ordinary Shares and because cash is generally considered to be an asset held for the production of passive income, our\nPFIC status will depend in large part on the market price of our Class A Ordinary Shares and the amount of cash we raised in our initial\npublic offering. Accordingly, fluctuations in the market price of the Class A Ordinary Shares may cause us to become a PFIC. In addition,\nthe application of the PFIC rules is subject to uncertainty in several respects and the composition of our income and assets will be\naffected by how, and how quickly, we spend the cash we raised in our initial public offering. We are under no obligation to take steps\nto reduce the risk of our being classified as a PFIC, and as stated above, the determination of the value of our assets will depend upon\nmaterial facts (including the market price of our Class A Ordinary Shares from time to time and the amount of cash we raise in our initial\npublic offering) that may not be within our control. If we are a PFIC for any year during which you hold Class A Ordinary Shares, we\nwill continue to be treated as a PFIC for all succeeding years during which you hold Class A Ordinary Shares. However, if we cease to\nbe a PFIC and you did not previously make a timely “mark-to-market” election as described below, you may avoid some of the\nadverse effects of the PFIC regime by making a “purging election” (as described below) with respect to the Class A Ordinary\nShares.\n\n \n\nIf we are a PFIC for any\ntaxable year during which you hold Class A Ordinary Shares, you will be subject to special tax rules with respect to any “excess\ndistribution” that you receive and any gain you realize from a sale or other disposition (including a pledge) of the Class A Ordinary\nShares, unless you make a “mark-to-market” election as discussed below. Distributions you receive in a taxable year that\nare greater than 125% of the average annual distributions you received during the shorter of the three preceding taxable years or your\nholding period for the Class A Ordinary Shares will be treated as an excess distribution. Under these special tax rules:\n\n \n\n \n●\nthe excess distribution\nor gain will be allocated ratably over your holding period for the Class A Ordinary Shares;\n\n \n\n104\n\n \n\n \n\n \n●\nthe amount allocated to\nthe current taxable year, and any taxable year prior to the first taxable year in which we were a PFIC, will be treated as ordinary\nincome, and\n\n \n\n \n●\nthe amount allocated to\neach other year will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments\nof tax will be imposed on the resulting tax attributable to each such year.\n\n \n\nThe tax liability for amounts\nallocated to years prior to the year of disposition or “excess distribution” cannot be offset by any net operating losses\nfor such years, and gains (but not losses) realized on the sale of the Class A Ordinary Shares cannot be treated as capital, even if\nyou hold the Class A Ordinary Shares as capital assets.\n\n \n\nA U.S. Holder of “marketable\nstock” (as defined below) in a PFIC may make a mark-to-market election for such stock to elect out of the tax treatment discussed\nabove. If you make a mark-to-market election for the first taxable year which you hold (or are deemed to hold) Class A Ordinary Shares\nand for which we are determined to be a PFIC, you will include in your income each year an amount equal to the excess, if any, of the\nfair market value of the Class A Ordinary Shares as of the close of your taxable year over your adjusted basis in such Class A Ordinary\nShares, which excess will be treated as ordinary income and not capital gain. You are allowed an ordinary loss for the excess, if any,\nof the adjusted basis of the Class A Ordinary Shares over their fair market value as of the close of the taxable year. However, such\nordinary loss is allowable only to the extent of any net mark-to-market gains on the Class A Ordinary Shares included in your income\nfor prior taxable years. Amounts included in your income under a mark-to-market election, as well as gain on the actual sale or other\ndisposition of the Class A Ordinary Shares, are treated as ordinary income. Ordinary loss treatment also applies to any loss realized\non the actual sale or disposition of the Class A Ordinary Shares, to the extent that the amount of such loss does not exceed the net\nmark-to-market gains previously included for such Class A Ordinary Shares. Your basis in the Class A Ordinary Shares will be adjusted\nto reflect any such income or loss amounts. If you make a valid mark-to-market election, the tax rules that apply to distributions by\ncorporations which are not PFICs would apply to distributions by us, except that the lower applicable capital gains rate for qualified\ndividend income discussed above under “- Taxation of Dividends and Other Distributions on our Class A Ordinary Shares” generally\nwould not apply.\n\n \n\nThe mark-to-market election\nis available only for “marketable stock”, which is stock that is traded in other than de minimis quantities on at least 15\ndays during each calendar quarter (“regularly traded”) on a qualified exchange or other market (as defined in applicable\nU.S. Treasury regulations), including the NASDAQ. If the Class A Ordinary Shares are regularly traded on the NASDAQ and if you are a\nholder of Class A Ordinary Shares, the mark-to-market election would be available to you were we to be or become a PFIC.\n\n \n\nAlternatively, a U.S. Holder\nof stock in a PFIC may make a “qualified electing fund” election with respect to such PFIC to elect out of the tax treatment\ndiscussed above. A U.S. Holder who makes a valid qualified electing fund election with respect to a PFIC will generally include in gross\nincome for a taxable year such holder’s pro rata share of the corporation’s earnings and profits for the taxable year. However,\nthe qualified electing fund election is available only if such PFIC provides such U.S. Holder with certain information regarding its\nearnings and profits as required under applicable U.S. Treasury regulations. We do not currently intend to prepare or provide the information\nthat would enable you to make a qualified electing fund election. If you hold Class A Ordinary Shares in any year in which we are a PFIC,\nyou will be required to file U.S. Internal Revenue Service Form 8621 in each such year and provide certain annual information regarding\nsuch Class A Ordinary Shares, including regarding distributions received on the Class A Ordinary Shares and any gain realized on the\ndisposition of the Class A Ordinary Shares.\n\n \n\n105\n\n \n\n \n\nIf you do not make a timely\n“mark-to-market” election (as described above), and if we were a PFIC at any time during the period you hold our Class A\nOrdinary Shares, then such Class A Ordinary Shares will continue to be treated as stock of a PFIC with respect to you even if we cease\nto be a PFIC in a future year, unless you make a “purging election” for the year we cease to be a PFIC. A “purging\nelection” creates a deemed sale of such Class A Ordinary Shares at their fair market value on the last day of the last year in\nwhich we are treated as a PFIC. The gain recognized by the purging election will be subject to the special tax and interest charge rules\ntreating the gain as an excess distribution, as described above. As a result of the purging election, you will have a new basis (equal\nto the fair market value of the Class A Ordinary Shares on the last day of the last year in which we are treated as a PFIC) and holding\nperiod (which new holding period will begin the day after such last day) in your Class A Ordinary Shares for tax purposes.\n\n \n\nYou are urged to consult\nyour tax advisors regarding the application of the PFIC rules to your investment in our Class A Ordinary Shares and the elections discussed\nabove.\n\n \n\n*Information Reporting and Backup Withholding*\n\n \n\nDividend payments with respect\nto our Class A Ordinary Shares and proceeds from the sale, exchange or redemption of our Class A Ordinary Shares may be subject to information\nreporting to the U.S. Internal Revenue Service and possible U.S. backup withholding at a current rate of 28%. Backup withholding will\nnot apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other required certification\non U.S. Internal Revenue Service Form W-9 or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish\ntheir exempt status generally must provide such certification on U.S. Internal Revenue Service Form W-9. U.S. Holders are urged to consult\ntheir tax advisors regarding the application of the U.S. information reporting and backup withholding rules.\n\n \n\nBackup withholding is not\nan additional tax. Amounts withheld as backup withholding may be credited against your U.S. federal income tax liability, and you may\nobtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the\nU.S. Internal Revenue Service and furnishing any required information. We do not intend to withhold taxes for individual shareholders.\nHowever, transactions effected through certain brokers or other intermediaries may be subject to withholding taxes (including backup\nwithholding), and such brokers or intermediaries may be required by law to withhold such taxes.\n\n \n\nUnder the Hiring Incentives\nto Restore Employment Act of 2010, certain U.S. Holders are required to report information relating to our Class A Ordinary Shares, subject\nto certain exceptions (including an exception for Class A Ordinary Shares held in accounts maintained by certain financial institutions),\nby attaching a complete Internal Revenue Service Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for\neach year in which they hold Class A Ordinary Shares.\n\n \n\n10.F. Dividends and Paying Agents\n\n \n\nNot Applicable.\n\n \n\n10.G. Statement by Experts\n\n \n\nNot Applicable.\n\n \n\n10.H. Documents on Display\n\n \n\nThe Company is subject to\nthe informational requirements of the Securities Exchange Act of 1934, as amended, and will file reports, registration statements and\nother information with the SEC. The Company’s reports, registration statements and other information can be inspected on the SEC’s\nwebsite at www.sec.gov and such information can also be inspected and copies ordered at the public reference facilities maintained by\nthe SEC at the following location: 100 F Street NE, Washington, D.C. 20549. You may also visit us on the World Wide Web at www.sxtchina.com.\nHowever, information contained on our website does not constitute a part of this annual report.\n\n \n\n10.I. Subsidiary Information\n\n \n\nNot Applicable.\n\n \n\n106"}