{"url_path":"/sec/sxtc/10-k/2026/item-11","section_key":"item-11","section_title":"Item 11 QUANTITATIVE","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":506,"has_tables":true,"body_markdown":"ITEM 11. QUANTITATIVE\nAND QUALITATIVE DISCLOSURES ABOUT MARKET RISK\n\n \n\nFinancial instruments that\nexpose us to concentrations of credit risk primarily consist of cash and accounts receivables. The maximum amount of loss due to credit\nrisk in the event of other parties failing to perform their obligations is represented by the carrying amount of each financial asset\nas stated in our consolidated balance sheets.\n\n \n\nAs of March 31, 2026, 2025\nand 2024, substantially all of our cash included bank deposits in accounts maintained within the PRC where there is currently no rule\nor regulation in place for obligatory insurance to cover bank deposits in the event of bank failure. However, we have not experienced\nany losses in such accounts and we believe we are not exposed to any significant risks on our cash in bank accounts. \n\n \n\nWe are exposed to various\ntypes of market risks, including changes in foreign exchange rates, commodity prices and inflation in the normal course of business.\n\n \n\n*Interest rate risk*\n\n \n\nWe are subject to risks resulting\nfrom fluctuations in interest rates on our bank balances. A substantial portion of our cash is held in China in interest bearing bank\ndeposits and denominated in RMB. To the extent that we may need to raise debt financing in the future, upward fluctuations in interest\nrates would increase the cost of new debt. We do not currently use any derivative instruments to manage our interest rate risk.\n\n \n\n*Commodity price risk*\n\n \n\nCertain raw materials used\nby us are subject to price volatility caused by supply conditions, political and economic variables and other unpredictable factors.\nThe primary purpose of our commodity price management activities is to manage the volatility associated with purchases of commodities\nin the normal course of business. We do not speculate on commodity prices.\n\n \n\n*Foreign exchange risk*\n\n \n\nThe RMB is not a freely convertible\ncurrency. The PRC government may take actions that could cause future exchange rates to vary significantly from current or historical\nexchange rates. Fluctuations in exchange rates may adversely affect the value of any dividends we declare.\n\n \n\nVery limited hedging transactions\nare available in China to reduce our exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions\nin an effort to reduce our exposure to foreign currency exchange risk. While we may enter into hedging transactions in the future, the\navailability and effectiveness of these transactions may be limited, and we may not be able to successfully hedge our exposure at all.\nIn addition, our foreign currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert\nRMB into foreign currencies.\n\n \n\n*Inflation risk*\n\n \n\nInflationary factors such\nas increases in the cost of our products and overhead costs may adversely affect our operating results. A high rate of inflation may\nhave an adverse effect on our ability to maintain current levels of gross margin and selling, general and administrative expenses as\na percentage of net revenues if the selling prices of our products do not increase proportionately with these increased costs."}