{"url_path":"/sec/sxtc/10-k/2026/item-19","section_key":"item-19","section_title":"Item 19 EXHIBITS","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":19723,"has_tables":true,"body_markdown":"ITEM 19. EXHIBITS\n\n \n\nExhibit\n \n \n \nIncorporated\nby Reference\n \nFiled\n\nNumber\n \nDescription\nof Documents\n \nForm\n \nExhibit No.\n \nFiling\nDate\n \nHerewith\n\n1.1\n \n[Amended\nand Restated Memorandum and Articles of Association, effective on July 28, 2025](https://www.sec.gov/Archives/edgar/data/1723980/000121390025068429/ea025058901ex3-1_chinasxt.htm)\n \n6-K\n \n3.1\n \nJuly 29, 2025\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n2.1\n \n[Settlement\nAgreement with FT Global, dated January 18, 2021](http://www.sec.gov/Archives/edgar/data/1723980/000121390021004914/ea133557ex4-1_chinasxt.htm)\n \n6-K\n \n4.1\n \nJanuary 28, 2021\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n2.2\n \n[Description\nof Registered Securities](ea029552401ex2-2.htm)\n \n \n \n \n \n \n \nX\n\n \n \n \n \n \n \n \n \n \n \n \n\n4.1\n \n[Exclusive\nBusiness Cooperation Agreement, dated October 13, 2017, between WFOE and Suxuantang](http://www.sec.gov/Archives/edgar/data/1723980/000114420417062247/tv480371_ex10-6.htm)\n \nF-1\n \n10.6\n \nDecember 4, 2017\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.2\n \n[Share\nPledge Agreement dated October 13, 2017, between WFOE, Di Zhou, Ziquan Zhou, Feng Zhou and Suxuantang](http://www.sec.gov/Archives/edgar/data/1723980/000114420417062247/tv480371_ex10-8.htm)\n \nF-1\n \n10.8\n \nDecember 4, 2017\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.3\n \n[Exclusive\nOption Agreement dated October 13, 2017, between WFOE, Di Zhou, Ziquan Zhou, Feng Zhou and Suxuantang](http://www.sec.gov/Archives/edgar/data/1723980/000114420417062247/tv480371_ex10-7.htm)\n \nF-1\n \n10.7\n \nDecember 4, 2017\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.4\n \n[Form\nof Power of Attorney dated October 13, 2017, between WFOE, Di Zhou, Ziquan Zhou, Feng Zhou and Suxuantang](http://www.sec.gov/Archives/edgar/data/1723980/000114420417062247/tv480371_ex10-9.htm)\n \nF-1\n \n10.9\n \nDecember 4, 2017\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.5\n \n[Form\nof Warrant Issued in Connection with the Settlement Agreement with FT Global](http://www.sec.gov/Archives/edgar/data/1723980/000121390021004914/ea133557ex4-2_chinasxt.htm)\n \n6-K\n \n4.2\n \nJanuary 28, 2021\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.6\n \n[2025\nEquity Incentive Plan](https://www.sec.gov/Archives/edgar/data/1723980/000101376225003930/ea023536101ex4-2_chinasxt.htm)\n \nS-8\n \n4.2\n \nMarch 28, 2025\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.7\n \n[2024\nEquity Incentive Plan](https://www.sec.gov/Archives/edgar/data/1723980/000121390024003001/ea191464ex4-2_chinasxt.htm)\n \nS-8\n \n4.2\n \nJanuary 11, 2024\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.8\n \n[2022\nEquity Incentive Plan](http://www.sec.gov/Archives/edgar/data/1723980/000121390022012543/ea156761ex4-2_chinasxt.htm)\n \nS-8\n \n4.2\n \nMarch 15, 2022\n \n \n\n \n\n4.9\n \n[Underwriting\nAgreement, dated January 18, 2022, by and between China SXT Pharmaceuticals, Inc. and Aegis Capital Corp.](http://www.sec.gov/Archives/edgar/data/1723980/000121390022002888/ea154280ex1-1_chinasxtphar.htm)\n \n6-K\n \n1.1\n \nJanuary 21,\n2022\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.10\n \n[Form\nof Warrant Agent Agreement, dated January 18, 2022, by and between China SXT Pharmaceuticals, Inc. and TranShare Corporation.](http://www.sec.gov/Archives/edgar/data/1723980/000121390022002888/ea154280ex4-1_chinasxtphar.htm)\n \n6-K\n \n4.1\n \nJanuary 21, 2022\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.11\n \n[Employment\nAgreement dated January 31, 2022, by and between China SXT Pharmaceuticals, Inc. and Mr. Xiaodong Pan.](http://www.sec.gov/Archives/edgar/data/1723980/000121390022004496/ea154708ex10-1_chinasxtphar.htm)\n \n6-K\n \n10.1\n \nJanuary 31, 2022\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.12\n \n[Form\nof Securities Purchase Agreement, dated March 14, 2022, by and between China SXT Pharmaceuticals, Inc. and Streeterville Capital,\nLLC.](http://www.sec.gov/Archives/edgar/data/1723980/000121390022012938/ea156952ex10-1_chinasxt.htm)\n \n6-K\n \n10.1\n \nMarch 16, 2022\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.13\n \n[Form\nof Convertible Promissory Note, dated March 16, 2022, issued in connection with the Securities Purchase Agreement with Streeterville\nCapital, LLC.](http://www.sec.gov/Archives/edgar/data/1723980/000121390022012938/ea156952ex10-2_chinasxt.htm)\n \n6-K\n \n10.2\n \nMarch 16, 2022\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.14\n \n[Form\nof Securities Purchase Agreement, dated September 22, 2022, by and between China SXT Pharmaceuticals, Inc. and Zhijun Xiao.](http://www.sec.gov/Archives/edgar/data/1723980/000121390022059139/ea166372ex10-1_chinasxt.htm)\n \n6-K\n \n10.1\n \nSeptember 27, 2022\n \n \n\n \n\n112\n\n \n\n \n\n4.15\n \n[Form\nof Securities Purchase Agreement, dated December 19, 2022, by and between China SXT Pharmaceuticals, Inc. and Streeterville Capital,\nLLC.](http://www.sec.gov/Archives/edgar/data/1723980/000121390022082314/ea170565ex10-1_chinasxt.htm)\n \n6-K\n \n10.1\n \nDecember 23, 2022\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.16\n \n[Form\nof Convertible Promissory Note, issued in connection with the Securities Purchase Agreement with Streeterville Capital, LLC dated\nDecember 19, 2022.](http://www.sec.gov/Archives/edgar/data/1723980/000121390022082314/ea170565ex10-2_chinasxt.htm)\n \n6-K\n \n10.2\n \nDecember 23, 2022\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.17\n \n[Form\nof Securities Purchase Agreement, dated February 22, 2023, by and between China SXT Pharmaceuticals, Inc. and Rising Sun Capital\nLtd.](http://www.sec.gov/Archives/edgar/data/1723980/000121390023015392/ea174411ex10-1_chinasxt.htm)\n \n6-K\n \n10.1\n \nFebruary 28, 2023\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.18\n \n[Form\nof Securities Purchase Agreement, dated March 7, 2023, by and between China SXT Pharmaceuticals, Inc. and Streeterville Capital,\nLLC.](http://www.sec.gov/Archives/edgar/data/1723980/000121390023022192/ea174850ex10-1_chinasxt.htm)\n \n6-K\n \n10.1\n \nMarch 23, 2023\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.19  \n \n[Form\nof Convertible Promissory Note, dated March 7, 2023, issued in connection with the Securities Purchase Agreement with Streeterville\nCapital, LLC.](http://www.sec.gov/Archives/edgar/data/1723980/000121390023022192/ea174850ex10-2_chinasxt.htm)\n \n6-K\n \n10.2\n \nMarch 23, 2023\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.20\n \n[Form\nof Securities Purchase Agreement, dated December 13, 2023, by and between China SXT Pharmaceuticals, Inc. and Streeterville Capital,\nLLC.](http://www.sec.gov/Archives/edgar/data/1723980/000121390024042947/ea020598501ex10-3_china.htm)\n \n6-K\n \n10.3\n \nMay 14, 2024\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.21\n \n[Form\nof Convertible Promissory Note, dated December 13, 2023, issued in connection with the Securities Purchase Agreement with Streeterville\nCapital, LLC.](http://www.sec.gov/Archives/edgar/data/1723980/000121390024042947/ea020598501ex10-6_china.htm)\n \n6-K\n \n10.6\n \nMay 14, 2024\n \n \n\n \n\n4.22\n \n[Form\nof Securities Purchase Agreement, dated March 27, 2024, by and between China SXT Pharmaceuticals, Inc. and Streeterville Capital,\nLLC.](http://www.sec.gov/Archives/edgar/data/1723980/000121390024042947/ea020598501ex10-2_china.htm)\n \n6-K\n \n10.2\n \nMay 14, 2024\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.23\n \n[Form\nof Convertible Promissory Note, dated March 27, 2024, issued in connection with the Securities Purchase Agreement with Streeterville\nCapital, LLC.](http://www.sec.gov/Archives/edgar/data/1723980/000121390024042947/ea020598501ex10-5_china.htm)\n \n6-K\n \n10.5\n \nMay 14, 2024\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.24\n \n[Form\nof Securities Purchase Agreement, dated May 9, 2024, by and between China SXT Pharmaceuticals, Inc. and Streeterville Capital, LLC.](http://www.sec.gov/Archives/edgar/data/1723980/000121390024042947/ea020598501ex10-1_china.htm)\n \n6-K\n \n10.1\n \nMay 14, 2024\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.25\n \n[Form\nof Convertible Promissory Note, dated May 9, 2024, issued in connection with the Securities Purchase Agreement with Streeterville\nCapital, LLC.](http://www.sec.gov/Archives/edgar/data/1723980/000121390024042947/ea020598501ex10-4_china.htm)\n \n6-K\n \n10.4\n \nMay 14, 2024\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.26\n \n[Securities\nPurchase Agreement, dated January 21, 2025, by ad between China SXT Pharmaceuticals, Inc. and certain individuals.](https://www.sec.gov/Archives/edgar/data/1723980/000121390025006976/ea022875701ex99-1_chinasxt.htm)\n \n6-K\n \n99.1\n \nJanuary 27, 2025\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.27\n \n[Ordinary\nShare Purchase Warrant, dated January 21, 2025, issued in connection with the Securities Purchase Agreement with certain individuals. ](https://www.sec.gov/Archives/edgar/data/1723980/000121390025006976/ea022875701ex99-2_chinasxt.htm)\n \n6-K\n \n99.2\n \nJanuary 27, 2025\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.28\n \n[Form\nof Securities Purchase Agreement, dated May 5, 2025, by ad between China SXT Pharmaceuticals, Inc. and an investor. ](https://www.sec.gov/Archives/edgar/data/1723980/000121390025042394/ea024189901ex10-1_chinasxt.htm)\n \n6-K\n \n10.1\n \nMay 13, 2025\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.29\n \n[Form\nof Securities Purchase Agreement, dated May 16, 2025, by ad between China SXT Pharmaceuticals, Inc. and several investors. ](https://www.sec.gov/Archives/edgar/data/1723980/000121390025054611/ea024584701ex10-1_china.htm)\n \n6-K\n \n10.1\n \nJune 16, 2025\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.30\n \n[Form\nof Ordinary Share Purchase Warrant, dated May 16, 2025, issued in connection with the Securities Purchase Agreement with several\ninvestors. ](https://www.sec.gov/Archives/edgar/data/1723980/000121390025054611/ea024584701ex10-2_china.htm)\n \n6-K\n \n10.2\n \nJune 16, 2025\n \n \n\n \n\n113\n\n \n\n \n\n4.31\n \n[Securities Purchase Agreement, dated January 9, 2026, by ad between China SXT Pharmaceuticals, Inc. and certain institutional investors. ](https://www.sec.gov/Archives/edgar/data/1723980/000121390026003910/ea027250601ex10-1_chinasxt.htm)\n \n6-K\n \n10.1\n \nJanuary 13, 2026\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.32\n \n[Form of Pre-Funded Warrant, dated January 9, 2026, issued in connection with the Securities Purchase Agreement with certain institutional investors. ](https://www.sec.gov/Archives/edgar/data/1723980/000121390026003910/ea027250601ex4-1_chinasxt.htm)\n \n6-K\n \n4.1\n \nJanuary 13, 2026\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.33\n \n[Placement Agency Agreement dated January 9, 2026, by and between China SXT Pharmaceuticals, Inc. and Univest Securities, LLC. ](https://www.sec.gov/Archives/edgar/data/1723980/000121390026003910/ea027250601ex10-2_chinasxt.htm)\n \n6-K\n \n10.2\n \nJanuary 13, 2026\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.34\n \n[Form of Securities Purchase Agreement, dated April 7, 2026, by ad between China SXT Pharmaceuticals, Inc. and certain investors. ](https://www.sec.gov/Archives/edgar/data/1723980/000121390026041765/ea028555201ex10-1.htm)\n \n6-K\n \n10.1\n \nApril 9, 2026\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.35\n \n[Form of Securities Purchase Agreement, dated May 1, 2026, by ad between China SXT Pharmaceuticals, Inc. and several “non-U.S. Persons.” ](https://www.sec.gov/Archives/edgar/data/1723980/000121390026051679/ea028894201ex10-1.htm)\n \n6-K\n \n10.1\n \nMay 4, 2026\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.36\n \n[Form of Warrants, dated May 2, 2026, issued in connection with the Securities Purchase Agreement with several “non-U.S. Persons.” ](https://www.sec.gov/Archives/edgar/data/1723980/000121390026051679/ea028894201ex4-1.htm)\n \n6-K\n \n4.1\n \nMay 4, 2026\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n4.37\n \n[Sales Agreement, dated June 1, 2026, by and between China SXT Pharmaceuticals, Inc. and Univest Securities, LLC. ](https://www.sec.gov/Archives/edgar/data/1723980/000121390026063591/ea029289801ex1-1.htm)\n \n6-K\n \n1.1\n \nJune 1, 2026\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n8.1\n \n[List of Subsidiaries and Consolidated Variable Interest Entities](ea029552401ex8-1.htm)\n \n \n \n \n \n \n \n X\n\n \n \n \n \n \n \n \n \n \n \n \n\n11\n \n[Code of Business Conduct and Ethics](http://www.sec.gov/Archives/edgar/data/1723980/000121390024068266/ea021014101ex11_chinasxt.htm)\n \n20-F\n \n11\n \nAugust 13, 2024\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n12.1\n \n[CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ea029552401ex12-1.htm)\n \n \n \n \n \n \n \nX\n\n \n \n \n \n \n \n \n \n \n \n \n\n12.2\n \n[CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ea029552401ex12-2.htm)\n \n \n \n \n \n \n \nX\n\n \n \n \n \n \n \n \n \n \n \n \n\n13.1\n \n[CEO and CFO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ea029552401ex13-1.htm)\n \n \n \n \n \n \n \nX\n\n \n \n \n \n \n \n \n \n \n \n \n\n23.1\n \n[Consent of Enrome LLP](ea029552401ex23-1.htm)\n \n \n \n \n \n \n \nX\n\n \n \n \n \n \n \n \n \n \n \n \n\n23.2\n \n[Consent of ZH CPA, LLC](ea029552401ex23-2.htm)\n \n \n \n \n \n \n \nX\n\n \n \n \n \n \n \n \n \n \n \n \n\n97\n \n[Policy relating to recovery of erroneously awarded compensation, as required by applicable listing standards adopted pursuant to 17 CFR 240.10D-1](http://www.sec.gov/Archives/edgar/data/1723980/000121390024068266/ea021014101ex97_chinasxt.htm)\n \n20-F\n \n97\n \nAugust 13, 2024\n \n \n\n \n \n \n \n \n \n \n \n \n \n \n\n101.INS\n \nInline XBRL Instance Document\n \n \n \n \n \n \n \nX\n\n \n \n \n \n \n \n \n \n \n \n \n\n101.SCH\n \nInline XBRL Taxonomy Extension Schema Document\n \n \n \n \n \n \n \nX\n\n \n \n \n \n \n \n \n \n \n \n \n\n101.CAL\n \nInline XBRL Taxonomy Extension Calculation Linkbase Document\n \n \n \n \n \n \n \nX\n\n \n \n \n \n \n \n \n \n \n \n \n\n101.DEF\n \nInline XBRL Taxonomy Extension Definition Linkbase Document\n \n \n \n \n \n \n \nX\n\n \n \n \n \n \n \n \n \n \n \n \n\n101.LAB\n \nInline XBRL Taxonomy Extension Label Linkbase Document\n \n \n \n \n \n \n \nX\n\n \n \n \n \n \n \n \n \n \n \n \n\n101.PRE\n \nInline XBRL Taxonomy Extension Presentation Linkbase Document\n \n \n \n \n \n \n \nX\n\n \n \n \n \n \n \n \n \n \n \n \n\n104\n \nCover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)\n \n \n \n \n \n \n \n \n\n \n\n114\n\n \n\n \n\nSIGNATURES\n\n \n\nThe registrant hereby certifies\nthat it meets all of the requirements for filing on this Form 20-F and that it has duly caused and authorized the undersigned to sign\nthis annual report on its behalf.\n\n \n\n \nChina SXT Pharmaceuticals, Inc.\n\n \n \n\n \n/s/\nFeng Zhou\n\n \nName:\nFeng Zhou\n\n \nTitle:\nCo-Chief Executive Officer\n\n \n\nDate: July 1, 2026\n\n \n\n115\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCHINA SXT PHARMACEUTICALS, INC.\n\n \n\nCONSOLIDATED FINANCIAL STATEMENTS\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCHINA SXT PHARMACEUTICALS, INC.\n\n \n\nINDEX TO CONSOLIDATED FINANCIAL STATEMENTS\n\n \n\nConsolidated Financial Statements   Pages\n\n     \n\n[Report of Independent Registered Public Accounting Firm (PCAOB ID: 6907)](#a_036)   F-2\n\n     \n\n[Report of Independent Registered Public Accounting Firm (PCAOB ID: 6413)](#a_037)   F-3\n\n     \n\n[Consolidated Balance Sheets as of March 31, 2026 and March 31, 2025](#a_038)   F-4\n\n     \n\n[Consolidated Statements of Loss and Comprehensive Loss for the Years Ended March 31, 2026, and 2025 and 2024](#a_039)   F-5\n\n     \n\n[Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended March 31, 2026, and 2025 and 2024](#a_040)   F-6\n\n     \n\n[Consolidated Statements of Cash Flows for the Years Ended March 31, 2026, and 2025 and 2024](#a_041)   F-7\n\n     \n\n[Notes to Consolidated Financial Statements](#a_042)   F-8 – F-38\n\n \n\nF-1\n\n \n\n  \n\nREPORT OF INDEPENDENT\nREGISTERED PUBLIC ACCOUNTING FIRM\n\n \n\nTo the Shareholders and Board of Directors of\n\nChina SXT Pharmaceuticals, Inc.\n\n \n\nOpinion on the Financial Statements\n\n \n\nWe have audited the accompanying consolidated balance sheets of China SXT Pharmaceuticals, Inc. and its subsidiaries (the “Company”) as of March 31, 2026 and 2025, the related consolidated statements of loss and comprehensive loss, changes in shareholders’ equity and cash flows for the years ended March 31, 2026 and 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2026 and 2025, and the results of its operations and its cash flows for the year ended March 31, 2026 and 2025, in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).\n\n \n\nBasis for Opinion\n\n \n\nThese consolidated financial statements are the\nresponsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial\nstatements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United\nStates) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities\nlaws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\n \n\nWe conducted our audits in accordance with the\nstandards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated\nfinancial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were\nwe engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an\nunderstanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of\nthe Company’s internal control over financial reporting. Accordingly, we express no such opinion.\n\n \n\nOur audits included performing procedures to\nassess the risks of material misstatements of the consolidated financial statements, whether due to error or fraud, and performing procedures\nthat respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the\nconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made\nby management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provided\na reasonable basis for our opinion.\n\n \n\nCritical Audit Matter\n\n \n\nCritical audit matters are matters arising from\nthe current period audit of the financial statements that were communicated or required to be communicated to the audit committee and\nthat: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,\nsubjective, or complex judgments. We determined that there are no critical audit matters.\n\n \n\n/s/ Enrome LLP\n\n \n\nWe have served as the Company’s auditor\nsince 2024\n\n \n\nSingapore\n\n \n\nJuly 1, 2026\n\n \n\nF-2\n\n \n\n \n\n \n\nREPORT OF INDEPENDENT REGISTERED\nPUBLIC ACCOUNTING FIRM\n\n \n\nTo the Shareholders and Board of Directors of\n\nChina SXT Pharmaceuticals, Inc.\n\n \n\nOpinion on the Consolidated Financial Statements\n\n \n\nWe have audited the accompanying consolidated statements of loss and\ncomprehensive loss, changes in shareholders’ equity, and cash flows of China SXT Pharmaceuticals, Inc. and its subsidiaries (the\n“Company”) for the year ended March 31, 2024, and the related notes (collectively referred to as the “consolidated financial\nstatements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the results of its\noperations and its cash flows for the year ended March 31, 2024 in conformity with accounting principles generally accepted in the United\nStates of America.\n\n \n\nThe Company’s ability to Continue as a Going Concern\n\n \n\nThe accompanying consolidated financial\nstatements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated\nfinancial statements, the Company reported net losses of $3,098,532, $5,934,772 and $5,736,095 for the years ended March 31, 2024,\n2023 and 2022, respectively. The Company had accumulated deficits of $24,711,665 and $21,613,133 as of March 31, 2024 and 2023,\nrespectively. The Company used funds in operating activities of $1,928,053 and $80,757 for the years ended March 31, 2024 and 2023,\nand generated funds from operating activities of $268,293 for the year ended March 31, 2022, respectively. In addition, the Company\nsuffered a continuous decline in revenue for the years ended March 31, 2024, 2023, and 2022. These factors raise substantial doubt\nabout the Company’s ability to continue as a going concern. Management’s plans to address these matters are also\ndescribed in Note 2. The financial statements do not include any adjustments that might result from the outcome of this\nuncertainty.\n\n \n\nBasis for Opinion\n\n \n\nThese consolidated financial statements are the\nresponsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial\nstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United\nStates) (the “PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal\nsecurities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\n \n\nWe conducted our audits in accordance with the\nstandards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated\nfinancial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were\nwe engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an\nunderstanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of\nthe Company’s internal control over financial reporting. Accordingly, we express no such opinion.\n\n \n\nOur audits included performing procedures to\nassess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures\nthat respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the\nconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made\nby management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide\na reasonable basis for our opinion.\n\n \n\n/s/ ZH CPA, LLC\n\n \n\nWe have served as the Company’s auditor from 2018 to October\n2024.\n\n \n\nDenver, Colorado\n\n \n\nAugust 13, 2024\n\n \n\nF-3\n\n \n\n \n\nCHINA SXT PHARMACEUTICALS, INC. AND SUBSIDIARIES\n\nCONSOLIDATED BALANCE SHEETS\n\n(IN U.S. DOLLARS, EXCEPT SHARES DATA)\n\n \n\n  \nAs of March 31, \n\n  \n2026  \n2025 \n\nASSETS \n   \n  \n\nCurrent Assets \n   \n  \n\nCash and cash equivalents $28,175,865  $18,099,019 \n\nRestricted cash  368   30,413 \n\nAccounts receivable, net  931,567   1,301,335 \n\nInventories, net  777,059   828,053 \n\nAdvance to suppliers  2,179,102   301,050 \n\nDue from related parties  2,073,369   417,563 \n\nOther receivables and other current assets, net  372,392   319,058 \n\nTotal Current Assets  34,509,722   21,296,491 \n\nNon-current Assets \n    \n   \n\nProperty, plant and equipment, net  117,103   178,561 \n\nIntangible assets, net  6,328   11,808 \n\nRight-of-use assets – operating leases – related party  121,421   176,648 \n\nTotal Non-current Assets  244,852   367,017 \n\nTOTAL ASSETS $34,754,574  $21,663,508 \n\n  \n    \n   \n\nLIABILITIES AND SHAREHOLDERS’ EQUITY \n    \n   \n\nCurrent Liabilities \n    \n   \n\nShort-term borrowings $355,175  $702,184 \n\nLong-term borrowings – current portion  -   8,781 \n\nAccounts payable  497,648   1,158,298 \n\nRefund liabilities  16,563   53,885 \n\nContract liabilities  104,423   58,627 \n\nAccrued expenses and other liabilities  3,304,661   2,937,652 \n\nTax payable  2,871   1,031,407 \n\nOperating lease liabilities – current – related party  67,979   61,229 \n\nTotal Current Liabilities  4,349,320   6,012,063 \n\nNon-current Liabilities \n    \n   \n\nLong-term borrowings – non current portion  644,390   96,264 \n\nOperating lease liabilities – non-current – related party  53,442   115,419 \n\nTotal Non-current Liabilities  697,832   211,683 \n\nTOTAL LIABILITIES  5,047,152   6,223,746 \n\n  \n    \n   \n\nCOMMITMENTS AND CONTINGENCIES  -   - \n\n  \n    \n   \n\nSHAREHOLDERS’ EQUITY \n    \n   \n\nOrdinary shares, unlimited shares authorized, no par value, 958,077 class A ordinary shares issued and outstanding 4 class B ordinary shares issued as of March 31, 2026 (91,756 shares issued and outstanding as of March 31, 2025)*  64,125,702   44,530,601 \n\nAccumulated deficits  (34,220,402)  (28,015,317)\n\nAccumulated other comprehensive loss  (197,878)  (1,075,522)\n\nTotal Shareholders’ Equity  29,707,422   15,439,762 \n\nTOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $34,754,574  $21,663,508 \n\n \n\n* Retrospectively restated for effect of reverse stock splits on October 5, 2023 and February 25, 2025,and for the Share Consolidation on February 3, 2026.\n\n \n\nThe accompanying notes are an integral part of\nthese consolidated financial statements.\n\n \n\nF-4\n\n \n\n  \n\nCHINA SXT PHARMACEUTICALS, INC. AND SUBSIDIARIES\n\nCONSOLIDATED STATEMENTS\nOF LOSS AND COMPREHENSIVE LOSS\n\n(IN U.S. DOLLARS, EXCEPT SHARES DATA)\n\n \n\n  \nFor\nthe years ended March 31, \n\n  \n2026  \n2025  \n2024 \n\n  \n   \n   \n  \n\nRevenues $1,138,052  $1,740,907  $1,928,497 \n\nRevenues generated from third parties  1,138,011   1,736,606   1,900,737 \n\nRevenue generated from related parties  41   4,301   27,760 \n\nCost of revenues  (889,350)  (1,373,480)  (1,374,526)\n\nGross profit  248,702   367,427   553,971 \n\n  \n    \n    \n   \n\nOperating expenses: \n    \n    \n   \n\nSelling and marketing  (244,185)  (289,859)  (433,566)\n\nGeneral and administrative  (7,127,450)  (2,758,047)  (2,635,622)\n\nTotal operating expenses  (7,371,635)  (3,047,906)  (3,069,188)\n\n  \n    \n    \n   \n\nOperating loss  (7,122,933)  (2,680,479)  (2,515,217)\n\n  \n    \n    \n   \n\nOther income (expenses): \n    \n    \n   \n\nInterest expenses, net  (62,965)  (648,221)  (544,279)\n\nOther income (expenses), net  980,813  25,048   (39,036)\n\nTotal other income (expenses), net\n  917,848  (623,173)  (583,315)\n\n  \n    \n    \n   \n\nLoss before income taxes  (6,205,085)  (3,303,652)  (3,098,532)\n\nIncome tax expenses  -   -   - \n\n  \n    \n    \n   \n\nNet loss  (6,205,085)  (3,303,652)  (3,098,532)\n\n  \n    \n    \n   \n\nOther comprehensive loss: \n    \n    \n   \n\nForeign currency translation income (loss)  877,644   (49,727)  (828,224)\n\nComprehensive loss  (5,327,441)  (3,353,379)  (3,926,756)\n\n  \n    \n    \n   \n\nLoss per ordinary share \n    \n    \n   \n\nBasic and diluted $(9.13) $(348.17) $(4,285.66)\n\nWeighted average number of ordinary shares outstanding \n    \n    \n   \n\nBasic and diluted*  679,648   9,489   723 \n\n \n\n* Retrospectively restated for effect of reverse stock splits on October 5, 2023 and February 25, 2025,and for the Share Consolidation on February 3, 2026.\n\n \n\nThe accompanying notes are an integral part of\nthese consolidated financial statements.\n\n \n\nF-5\n\n \n\n \n\nCHINA SXT PHARMACEUTICALS,\nINC. AND SUBSIDIARIES\n\nCONSOLIDATED STATEMENTS\nOF CHANGES IN SHAREHOLDERS’ EQUITY\n\nFOR THE YEARS ENDED MARCH 31, 2026, 2025 AND\n2024\n\n(IN U.S. DOLLARS, EXCEPT SHARES DATA)\n\n \n\n \n \nShares*\n \n \nAmount\n \n \nAdditional\n\npaid-in\n\ncapital\n \n \nAccumulated\n\ndeficits\n \n \nAccumulated\n\nother\n\ncomprehensive\nloss\n \n \nTotal\n\nequity\n \n\nBalance as of March 31, 2023  381  $913,785  $35,588,214  $(21,613,133) $(197,571) $14,691,295 \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nNet loss  -   -   -   (3,098,532)  -   (3,098,532)\n\nShare issuance due to reverse-split round up  36   -   -   -   -   - \n\nShares issued as employee incentives  154   370,632   (18,532)  -   -   352,100 \n\nIssuance of shares for convertible notes  1,278   3,067,873   (254,066)  -   -   2,813,807 \n\nElimination of par value  -   35,315,616   (35,315,616)  -   -   - \n\nForeign currency translations  -   -   -   -   (828,224)  (828,224)\n\nBalance as of March 31, 2024  1,849  $39,667,906  $-  $(24,711,665) $(1,025,795) $13,930,446 \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nNet loss  -   -   -   (3,303,652)  -   (3,303,652)\n\nIssuance of shares for convertible notes  2,972   2,102,704   -   -   -   2,102,704 \n\nShares issued under shares purchase agreements  86,667   2,759,991   -   -   -   2,759,991 \n\nShare issuance due to reverse-split round up  268   -   -   -   -     \n\nForeign currency translations  -   -   -   -   (49,727)  (49,727)\n\nBalance as of March 31, 2025  91,756  $44,530,601  $-  $(28,015,317) $(1,075,522) $15,439,762 \n\nNet loss  -   -   -    (6,205,085)  -    (6,205,085)\n\nShares issued under shares purchase agreements  668,000   5,179,382      -   -   5,179,382 \n\nShares issued as employee incentives  13,763   5,305,739      -   -   5,305,739 \n\nIssuance of shares and pre-funded warrants  184,444   9,109,980      -   -   9,109,980 \n\nShare issuance due to reverse-split round up  118   -   -   -   -   - \n\nForeign currency translations  -   -   -   -   877,644   877,644 \n\nBalance as of March 31, 2026*  958,081    64,125,702    -    (34,220,402 )  (197,878)   29,707,422  \n\n \n\n* Retrospectively restated for effect of reverse stock splits on October 5, 2023 and February 25, 2025,and for the Share Consolidation on February 3, 2026.\n\n \n\nThe accompanying notes are an integral part of\nthese consolidated financial statements.\n\n \n\nF-6\n\n \n\n \n\nCHINA SXT PHARMACEUTICALS,\nINC. AND SUBSIDIARIES\n\nCONSOLIDATED STATEMENTS\nOF CASH FLOWS\n\n(IN U.S. DOLLARS)\n\n \n\n \n \nFor the years ended March 31,\n \n\n \n \n2026\n \n \n2025\n \n \n2024\n \n\nCash Flows from Operating Activities:\n \n \n \n \n \n \n \n \n \n\nNet loss from operations $(6,205,085) $(3,303,652) $(3,098,532)\n\nAdjustments to reconcile net loss to net cash provided by operating\nactivities:\n \n \n \n \n \n \n \n \n \n \n \n \n\nDepreciation and amortization expenses  73,668   82,297   203,247 \n\nExpected credit loss  128,265   263,972   283,234 \n\nAllowance for long-term deposit      1,006,052   - \n\nInventory impairment provision  53,955   (22,863)  (72,057)\n\nLoss from disposal of property, plant and equipment  -   10,466   - \n\nProperty, plant and equipment impairment  -   -   401,995 \n\nConstruction in progress impairment  -   -   20,929 \n\nConvertible notes - Accretion of financing cost  -   520,787   292,771 \n\nShare-based compensation  5,305,739   -   352,100 \n\nDepreciation of right-of-use assets  69,551   69,343   69,819 \n\nNon-cash gain on forgiveness of income tax payable  (1,053,365)        \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n\nChanges in operating assets and liabilities:\n \n \n \n \n \n \n \n \n \n \n \n \n\nAccounts receivable  291,134   (257,085)  (321,422)\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n\nInventory  36,219   (14,530)  (219,646)\n\nAdvance to suppliers  (545,809)  (287,824)  29,356 \n\nOther receivables and other current assets  (59,438)  (223,477)  143,175 \n\nAmount due from related parties  (1,611,676)  -   - \n\nAccounts payable  (693,481)  (114,081)  (29,254)\n\nRefund liabilities  (38,469)  (159,502)  107,883 \n\nContract liabilities  40,984   (128,813)  30,441 \n\nTax payable  15,822   (15,842)  1,562 \n\nOperating lease liability – related party lease  (69,551)  (69,343)  (69,819)\n\nAccrued expenses and other current liabilities  244,081   298,762   (53,835)\n\nNet cash used in operating activities  (4,017,456)  (2,345,333)  (1,928,053)\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n\nCash Flows from Investing Activities:\n \n \n \n \n \n \n \n \n \n \n \n \n\nPurchase of property, plant and equipment  -   (2,023)  (7,063)\n\nDeposits paid for purchase of intangible assets  (1,250,921)  -   - \n\nCash received from disposal of property, plant and equipment  -   65,539   - \n\nCollection of deposit - Huangshan Panjie  -   -   33,486 \n\nNet cash (used in) provided by investing activities  (1,250,921)  63,516   26,423 \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n\nCash Flows from Financing Activities:\n \n \n \n \n \n \n \n \n \n \n \n \n\nProceeds from borrowings  520,722   258,003   433,927 \n\nRepayment of borrowings  (376,563)  (78,118)  (78,654)\n\nRepayment from (Advances to) related parties  -   5,839,277   (2,205,254)\n\nRepayment to related parties  -   -   (1,727,418)\n\nProceeds from convertible note  -   1,595,000   1,063,333 \n\nRepayment of convertible notes  -   (1,840,000)  - \n\nPayment of convertible note issuance cost  -   (135,000)  (110,362)\n\nNet proceeds from shares purchase agreements  14,289,362   2,759,991   - \n\nNet cash provided by (used in) financing activities  14,433,521   8,399,153   (2,624,428)\n\nEffect of exchange rate changes on cash and cash equivalents  881,657   (65,091)  (765,233)\n\nNet increase (decrease) in cash, cash equivalents and restricted cash  10,046,801   6,052,245   (5,291,291)\n\nCash, cash equivalents and restricted cash at the beginning of the year  18,129,432   12,077,187   17,368,478 \n\nCash, cash equivalents and restricted cash at the end of the year $28,176,233  $18,129,432  $12,077,187 \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n\nSupplemental disclosures of cash flows information:\n \n \n \n \n \n \n \n \n \n \n \n \n\nCash paid for interest expense $21,451  $21,239  $24,533 \n\nNon-cash transactions:\n \n \n \n \n \n \n \n \n \n \n \n \n\nIssuance of shares for convertible note principal and interest partial settlement $-  $2,102,704  $2,813,807 \n\nNon-cash settlement between balances of accounts receivable and due to related parties $-  $-  $1,235,290 \n\nNon-cash settlement between balances of due from related parties and due to related parties $-  $8,993,443  $6,080,971 \n\nNon-cash settlement between balances of long-term deposit and due to related parties  -   7,267,770   - \n\nDisposal of property, plant and equipment $-  $76,005  $- \n\n \n\nThe accompanying notes are an integral part of\nthese consolidated financial statements.\n\nF-7\n\n \n\n \n\nCHINA SXT PHARMACEUTICALS,\nINC. AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL\nSTATEMENTS\n\n \n\nNOTE 1 – ORGANIZATION AND PRINCIPAL ACTITIVIES\n\n \n\nChina SXT Pharmaceutical, Inc. (“SXT” or the “Company”) is a holding company incorporated in British Virgin Islands on July 4, 2017. The Company focuses on the research, development, manufacture, marketing and sales of traditional Chinese medicine pieces (the “TCMP”), through its variable interest entity (“VIE”), Jiangsu Suxuantang Pharmaceutical Co., Ltd, (“Taizhou Suxuantang”) in China. The Company currently sells three types of TCMP products: Advanced TCMP, Fine TCMP and Regular TCMP, and raw medicinal materials products. We currently have a product portfolio of 11 Advanced TCMPs, 5 Fine TCMPs, 200 Regular TCMPs and 200 raw medicinal materials products that address a wide variety of diseases and medical indications. Most of our products are sold on a prescription basis across China. The Company’s principal executive offices are located in Taizhou, Jiangsu province, China.\n\n \n\nThe following diagram illustrates our corporate structure, including our subsidiary and consolidated variable interest entity as of the date of the financial statements:\n\n \n\n \n\nVIE Agreements with Taizhou Suxuantang\n\n \n\nDue to PRC legal restrictions on foreign ownership in the pharmaceutical sector, neither the Company nor our subsidiaries own any equity interest in Taizhou Suxuantang. Instead, the Company controls and receives the economic benefits of Taizhou Suxuantang’s business operations through a series of contractual arrangements. WFOE, Taizhou Suxuantang and its shareholders entered into such a series of contractual arrangements, also known as VIE Agreements, on October 13, 2017. The VIE agreements are designed to provide WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Taizhou Suxuantang, including absolute control rights and the rights to the assets, property and revenue of Taizhou Suxuantang.\n\n \n\nF-8\n\n \n\n \n\nNOTE 1 – ORGANIZATION AND PRINCIPAL ACTITIVIES (CONTINUED)\n\n \n\nVIE Agreements with Taizhou Suxuantang (continued)\n\n \n\nAccording to the Exclusive Business Cooperation Agreement between WFOE and Taizhou Suxuantang, which is one of the VIE Agreements that was also entered into on October 13, 2017, Taizhou Suxuantang is obligated to pay service fees to WFOE approximately equal to the net income of Taizhou Suxuantang.\n\n \n\nEach of the VIE Agreements is described in detail below:\n\n \n\n*Exclusive Business Cooperation Agreement*\n\n \n\nPursuant to the Exclusive Business Cooperation Agreement between Taizhou Suxuantang and WFOE, WFOE provides Taizhou Suxuantang with technical support, consulting services and other management services relating to its day-to-day business operations and management, on an exclusive basis, utilizing its advantages in technology, human resources, and information. Additionally, Taizhou Suxuantang granted an irrevocable and exclusive option to WFOE to purchase from Taizhou Suxuantang, any or all of Taizhou Suxuantang’s assets at the lowest purchase price permitted under the PRC laws. Should WFOE exercise such option, the parties shall enter into a separate asset transfer or similar agreement. For services rendered to Taizhou Suxuantang by WFOE under this agreement, WFOE is entitled to collect a service fee calculated based on the time of services rendered multiplied by the corresponding rate, plus the amount of the services fees or ratio decided by the board of directors of WFOE based on the value of services rendered by WFOE and the actual income of Taizhou Suxuantang from time to time, which is approximately equal to the net income of Taizhou Suxuantang.\n\n \n\nThe Exclusive Business Cooperation Agreement shall remain in effect for ten years unless it is terminated by WFOE with 30-day prior notice. Taizhou Suxuantang does not have the right to terminate the agreement unilaterally. WFOE may unilaterally extend the term of this agreement with prior written notice.\n\n \n\nThe CEO and president of WFOE, Mr. Feng Zhou, is currently managing Taizhou Suxuantang pursuant to the terms of the Exclusive Business Cooperation Agreement. WFOE has absolute authority relating to the management of Taizhou Suxuantang, including but not limited to decisions with regard to expenses, salary raises and bonuses, hiring, firing and other operational functions. The Exclusive Business Cooperation Agreement does not prohibit related party transactions. The audit committee is required to review and approve in advance any related party transactions, including transactions involving WFOE or Taizhou Suxuantang.\n\n \n\n*Share Pledge Agreement*\n\n \n\nUnder the Share Pledge Agreement among WFOE and Feng Zhou, Ziqun Zhou, and Di Zhou, who together hold 100% shares of Taizhou Suxuantang (“Taizhou Suxuantang Shareholders”), the Taizhou Suxuantang Shareholders pledged all of their equity interests in Taizhou Suxuantang to WFOE to guarantee the performance of Taizhou Suxuantang’s obligations under the Exclusive Business Cooperation Agreement. Under the terms of the agreement, in the event that Taizhou Suxuantang or its shareholders breach their respective contractual obligations under the Exclusive Business Cooperation Agreement, WFOE, as pledgee, will be entitled to certain rights, including, but not limited to, the right to collect dividends generated by the pledged equity interests. The Taizhou Suxuantang Shareholders also agreed that upon occurrence of any event of default, as set forth in the Share Pledge Agreement, WFOE is entitled to dispose of the pledged equity interest in accordance with applicable PRC laws. The Taizhou Suxuantang Shareholders further agree not to dispose of the pledged equity interests or take any actions that would prejudice WFOE’s interest.\n\n \n\nThe Share Pledge Agreement shall be effective until all payments due under the Exclusive Business Cooperation Agreement have been paid by Taizhou Suxuantang. WFOE shall cancel or terminate the Share Pledge Agreement upon with no additional expense.\n\n \n\nF-9\n\n \n\n \n\nNOTE 1 – ORGANIZATION AND PRINCIPAL ACTITIVIES (CONTINUED)\n\n \n\n*Share Pledge Agreement (continued)*\n\n \n\nThe purposes of the Share Pledge Agreement are to (1) guarantee the performance of Taizhou Suxuantang’s obligations under the Exclusive Business Cooperation Agreement, (2) make sure the shareholders of Taizhou Suxuantang shall not transfer or assign the pledged equity interests, or create or allow any encumbrance that would prejudice WFOE’s interests without WFOE’s prior written consent and (3) provide WFOE control over Taizhou Suxuantang. Under the Exclusive Option Agreement (described below), WFOE may exercise its option to acquire the equity interests in Taizhou Suxuantang any time to the extent permitted by the PRC Law. In the event Taizhou Suxuantang breaches its contractual obligations under the Exclusive Business Cooperation Agreement, WFOE will be entitled to foreclose on the Taizhou Suxuantang Shareholders’ equity interests in Taizhou Suxuantang and may (1) exercise its option to purchase or designate third parties to purchase part or all of their equity interests in Taizhou Suxuantang and in this situation, WFOE may terminate the VIE agreements after acquisition of all equity interests in Taizhou Suxuantang or form a new VIE structure with the third parties designated by WFOE; or (2) dispose the pledged equity interests and be paid in priority out of the proceeds from the disposal in which case the VIE structure will be terminated.\n\n \n\n*Exclusive Option Agreement*\n\n \n\nUnder the Exclusive Option Agreement, the Taizhou Suxuantang Shareholders irrevocably granted WFOE (or its designee) an exclusive option to purchase, to the extent permitted under PRC law, once or at multiple times, at any time, part or all of their equity interests in Taizhou Suxuantang at the exercise price of RMB10.00.\n\n \n\nUnder the Exclusive Option Agreement, WFOE may at any time under any circumstances, purchase, or have its designated person to purchase, at its discretion, to the extent permitted under PRC law, all or part of the shareholders’ equity interests in Taizhou Suxuantang.\n\n \n\nThis Agreement shall remain effective until all equity interests held by Taizhou Suxuantang Shareholders in Taizhou Suxuantang have been transferred or assigned to WFOE and/or any other person designated by WFOE in accordance with this Agreement.\n\n \n\n*Power of Attorney*\n\n \n\nUnder the Power of Attorney, the Taizhou Suxuantang Shareholders authorize WFOE to act on their behalf as their exclusive agent and attorney with respect to all rights as shareholders, including but not limited to: (a) attending shareholders’ meetings; (b) exercising all the shareholder’s rights, including voting, that shareholders are entitled to under the laws of China and the Articles of Association, including but not limited to the sale or transfer or pledge or disposition of shares in part or in whole; and (c) designating and appointing on behalf of shareholders the legal representative, the executive director, supervisor, the chief executive officer and other senior management members of Taizhou Suxuantang.\n\n \n\nAlthough it is not explicitly stipulated in the Power of Attorney, the term of the Power of Attorney shall be the same as the term of that of the Exclusive Option Agreement.\n\n \n\nThis Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid for each shareholder from the date it is executed until the date he/she no longer is a shareholder of Taizhou Suxuantang.\n\n \n\nThe Exclusive Option Agreement, together with the Share Pledge Agreement and the Power of Attorney enable WFOE to exercise effective control over Taizhou Suxuantang.\n\n \n\n*Risks associated with the VIE structure*\n\n \n\nThe Group believes that the contractual arrangements with its VIEs and the shareholders of its VIEs are in compliance with PRC laws and regulations and are legally enforceable. However, uncertainties in the PRC legal system could limit the Group’s ability to enforce the contractual arrangements. If the legal structure and contractual arrangements were found to be in violation of PRC laws and regulations, the PRC government could:\n\n \n\n● revoke the business and operating licenses of the Group’s PRC subsidiary and VIEs;\n\n \n\n● discontinue or restrict the operations of any related-party transactions between the Group’s PRC subsidiary and VIEs;\n\n \n\nF-10\n\n \n\n \n\nNOTE 1 – ORGANIZATION AND PRINCIPAL ACTITIVIES (CONTINUED)\n\n \n\n*Risks associated with the VIE structure (continued)*\n\n \n\n● limit the Group’s business expansion in China by way of entering into contractual arrangements;\n\n \n\n● impose fines or other requirements with which the Group’s PRC subsidiary and VIEs may not be able to comply;\n\n \n\n● require the Group or the Group’s PRC subsidiary and VIEs to restructure the relevant ownership structure or operations; or\n\n \n\n● restrict or prohibit the Group’s use of the proceeds from public offering to finance the Group’s business and operations in China.\n\n \n\nThe Group’s ability to conduct its financial service businesses may be negatively affected if the PRC government were to carry out of any of the aforementioned actions. As a result, the Group may not be able to consolidate its VIEs in its consolidated financial statements as it may lose the ability to exert effective control over the VIEs and their shareholders and it may lose the ability to receive economic benefits from the VIEs. The Group, however, does not believe such actions would result in the liquidation or dissolution of the Group, its PRC subsidiary and its VIEs.\n\n \n\nThe Group, China SXT Group Limited (“SXT HK”) and Beijing Suxantang Biotechnology Co. Ltd. (the “WFOE”) are essentially holding companies and do not have active operations as of March 31, 2026 and 2025. As a result, total assets and liabilities presented on the Consolidated Balance Sheets and revenue, expenses, and net income presented on the Consolidated Statement of Comprehensive Income as well as the cash flows from operating, investing and financing activities presented on the Consolidated Statement of Cash Flows are substantially the financial position, operation and cash flow of the Group’s VIE, Jiangsu Taizhou Suxuantang Pharmaceutical Co., Ltd. (“Taizhou Suxuantang”). The Group has not provided any financial support to the VIE for the years ended March 31, 2026 and 2025.\n\n \n\nThe table sets forth the assets and liabilities of the VIEs included in the Group’s consolidated balance sheets:\n\n \n\n    As of March 31,  \n\n    2026     2025  \n\nASSETS            \n\nCurrent Assets            \n\nCash and cash equivalents   $ 17,629,104     $ 17,866,902  \n\nRestricted cash     203       29,915  \n\nAccounts receivable, net     931,567       1,301,335  \n\nInventories, net     775,951       816,195  \n\nAdvance to suppliers     1,909,102       301,050  \n\nDue from related parties     1,896,225       -  \n\nOther receivables and other current assets, net     85,756       30,957  \n\nTotal Current Assets     23,227,908       20,346,354  \n\nNon-current Assets                \n\nProperty, plant and equipment, net     117,103       178,561  \n\nIntangible assets, net     6,328       11,808  \n\nRight-of-use assets – operating leases – related party     121,421       176,648  \n\nTotal Non-current Assets     244,852       367,017  \n\nTOTAL ASSETS   $ 23,472,760     $ 20,713,371  \n\n                 \n\nLIABILITIES AND SHAREHOLDERS’ EQUITY                \n\nCurrent Liabilities                \n\nShort-term borrowings   $ 184,836     $ 549,046  \n\nAccounts payable     497,648       1,423,836  \n\nRefund liabilities     16,563       53,885  \n\nContract liabilities     74,922       58,145  \n\nAccrued expenses and other liabilities     2,626,787       2,170,813  \n\nTax payable     2,871       1,042,820  \n\nOperating lease liabilities – current – related party     67,979       61,229  \n\nAmount due to the subsidiaries of the Group     21,008,981       24,408,129  \n\nTotal Current Liabilities     24,480,587       29,767,903  \n\nNon-current Liabilities                \n\nLong-term borrowings– non current portion     644,390       96,264  \n\nOperating lease liabilities – non-current – related party     53,442       115,419  \n\nTotal Non-current Liabilities     697,832       211,683  \n\nTOTAL LIABILITIES     25,178,419       29,979,586  \n\n \n\nF-11\n\n \n\n \n\nNOTE 1 – ORGANIZATION AND PRINCIPAL ACTITIVIES (CONTINUED)\n\n \n\n*Risks associated with the VIE structure (continued)*\n\n \n\nThe table sets forth the results of operations of the VIE before the elimination of the intra-company transactions included in the Group’s consolidated statements of comprehensive income/(loss):\n\n \n\n    For the years ended March 31,  \n\n    2026     2025     2024  \n\n                   \n\nRevenues   $ 1,138,052     $ 1,702,643     $ 1,928,497  \n\nNet income (loss)     100,347       (2,224,767 )     (1,842,498 )\n\n \n\nThe table sets forth the cash flows of the VIE included in the Group’s consolidated statements of cash flows:\n\n \n\n    For the years ended March 31,  \n\n    2026     2025     2024  \n\nNet cash used in operating activities   $ (41,985 )   $ (1,609,248 )     (1,243,891 )\n\nNet cash (used in) provided by investing activities     (1,250,921 )     63,516       26,423  \n\nNet cash provided by (used in) financing activities     144,160       151,748       (2,980,933 )\n\n \n\nUnder the VIE Arrangements, the Group has the power to direct activities of VIE and can have assets transferred out of VIE. Therefore, the Group considers that there is no asset in VIE that can be used only to settle obligations of VIE, except for registered capital and PRC statutory reserves, if any. As VIE is incorporated as limited liability Group under the Group Law of the PRC, creditors of the VIE do not have recourse to the general credit of the Group for any of the liabilities of VIE. Accordingly, the accounts of VIE and its subsidiaries are consolidated in the accompanying consolidated financial statements. In addition, its financial positions and results of operations are included in the Group’s consolidated financial statements.\n\n \n\nBasis of presentation and principles of consolidation\n\n \n\nThe accompany consolidated financial statements of the Company has been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”).\n\n \n\nThe consolidated financial statements include the accounts of the Company and include the assets, liabilities, revenues and expenses of all majority-owned subsidiaries and VIE over which the Company exercises control and, when applicable, entities for which the Company has a controlling financial interest or is the primary beneficiary. All inter-company accounts and transactions have been eliminated in consolidation.\n\n \n\nThe VIE, Taizhou Suxuantang is owned by three shareholders, each of which act as the Company’s nominee shareholder. For the consolidated VIEs, the Company’s management made evaluations of the relationships between the Company and the VIE and the economic benefit flow of contractual arrangements with Taizhou Suxuantang. In connection with such evaluation, management also took into account the fact that, as a result of such contractual arrangements, the Company control the shareholders’ voting interests in these VIEs. As a result of such evaluation, management concluded that the Company is the primary beneficiary of the consolidated VIEs, Taizhou Suxuantang. The Company does not have any VIEs that are not consolidated in the financial statements.\n\n \n\nF-12\n\n \n\n \n\nNOTE 2 – SIGNIFICANT ACCOUNTING POLICIES\n\n \n\nRisks in relation to the VIE structure\n\n \n\nIt is possible that the Company’s operation of certain of its operations and businesses through its VIE could be found by PRC authorities to be in violation of PRC law and regulations prohibiting or restricting foreign ownership of companies that engage in such operations and businesses. While the Company’s management considers the possibility of such a finding by PRC regulatory authorities under current law and regulations to be remote. On January 19, 2015, the Ministry of Commerce of the PRC, or (the “MOFCOM”) released on its website for public comment a proposed PRC law (the “Draft FIE Law”) that appears to include VIE within the scope of entities that could be considered to be foreign invested enterprises (or “FIEs”) that would be subject to restrictions under existing PRC law on foreign investment in certain categories of industry. Specifically, the Draft FIE Law introduces the concept of “actual control” for determining whether an entity is considered to be an FIE. In addition to control through direct or indirect ownership or equity, the Draft FIE Law includes control through contractual arrangements within the definition of “actual control.” If the Draft FIE Law was passed by the People’s Congress of the PRC and went into effect in its current form and as a result the Company’s VIE could become explicitly subject to the current restrictions on foreign investment in certain categories of industry. The Draft FIE Law includes provisions that would exempt from the definition of foreign invested enterprises entities where the ultimate controlling shareholders are either entities organized under PRC law or individuals who are PRC citizens. The Draft FIE Law is silent as to what type of enforcement action might be taken against existing VIEs that operate in restricted or prohibited industries and are not controlled by entities organized under PRC law or individuals who are PRC citizens. If a finding were made by PRC authorities, under existing law and regulations or under the Draft FIE Law if it becomes effective, about the Company’s operation of certain of its operations and businesses through its VIEs, regulatory authorities with jurisdiction over the licensing and operation of such operations and businesses would have broad discretion in dealing with such a violation, including levying fines, confiscating the Company’s income, revoking the business or operating licenses of the affected businesses, requiring the Company to restructure its ownership structure or operations, or requiring the Company to discontinue all or any portion of its operations. Any of these actions could cause significant disruption to the Company’s business operations and have a severe adverse impact on the Company’s cash flows, financial position and operating performance.\n\n \n\nIn addition, it is possible that the contracts among Taizhou Suxuantang, WFOE, and the nominee shareholders of Taizhou Suxuantang would not be enforceable in China if PRC government authorities or courts were to find that such contracts contravene PRC laws and regulations or are otherwise not enforceable for public policy reasons. In the event that the Company is unable to enforce these contractual arrangements, the Company will not be able to exert effective control over the VIEs. Consequently, the VIEs’ results of operations, assets and liabilities would not be included in the Company’s consolidated financial statements. If such were the case, the Company’s cash flows, financial position, and operating performance would be materially adversely affected. The Company’s contractual arrangements Taizhou Suxuantang, WFOE, and the nominee shareholders of Taizhou Suxuantang are approved and in place. Management believes that such contracts are enforceable and considers the possibility remote that PRC regulatory authorities with jurisdiction over the Company’s operations and contractual relationships would find the contracts to be unenforceable.\n\n \n\nThe Company’s operations and businesses rely on the operations and businesses of its VIEs, which hold certain recognized revenue-producing assets. The VIEs also have an assembled workforce, focused primarily on research and development, whose costs are expensed as incurred. The Company’s operations and businesses may be adversely impacted if the Company loses the ability to use and enjoy assets held by its VIE.\n\n \n\nForeign currency translation\n\n \n\nTransactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations.\n\n \n\nThe reporting and functional currencies of the Company and SXT HK are the United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$. In addition, the WFOE and the VIE maintain their books and records in their respective local currency, Renminbi (“RMB”), which is also the respective functional currency for each subsidiary and VIE as they are the primary currency of the economic environment in which each subsidiary operates.\n\n \n\nF-13\n\n \n\n \n\nNOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)\n\n \n\nForeign currency translation (continued)\n\n \n\nIn general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of a foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity. Other equity items are translated using the exchange rates on the transaction date.\n\n \n\nTranslation of amounts from the local currencies of the Company into US$ has been made at the following exchange rates for the respective periods:\n\n \n\n    March 31,\n2026     March 31,\n2025     March 31,\n2024  \n\n                   \n\nBalance sheet items, except for equity accounts     6.8980       7.2567       7.2203  \n\nItems in the statements of operations and comprehensive income (loss), and statements of cash flows     7.1947       7.2163       7.1671  \n\n \n\nMeasurement of credit losses on financial instruments\n\n \n\nOn April 1, 2023, the Company adopted ASU 2016-13, “Financial Instruments — Credit Losses (Topic 326) — Measurement of Credit Losses on Financial Instruments,” for financial assets at amortized cost including accounts receivable and other receivables. This guidance replaced the “incurred loss” impairment methodology with an approach based on “expected losses” to estimate credit losses on certain types of financial instruments and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance requires financial assets to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the cost of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset.\n\n \n\nUse of estimates\n\n \n\nThe preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information.\n\n \n\nChanges in facts and circumstances may cause the Company to revise its estimates. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. The following are some of the areas requiring significant judgments and estimates as of March 31, 2026 and 2025  : determinations of the useful lives of long-lived assets, estimates of expected credit loss for accounts receivable and other receivables, estimates of inventories write-down, sales return rate, the discount rate used for right-of-use assets and lease liabilities calculation, and  income taxes and assessments of unrecognized tax benefits.\n\n \n\nF-14\n\n \n\n \n\nNOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)\n\n \n\nFair values of financial instruments\n\n \n\nASC Topic 825, Financial Instruments (“Topic 825”) requires disclosure of fair value information of financial instruments, whether or not recognized in the balance sheets, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. Topic 825 excludes certain financial instruments and all non financial assets and liabilities from its disclosure requirements. Accordingly, the aggregate fair value amounts do not represent the underlying value of the Company.\n\n \n\n  ● Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.\n\n \n\n  ● Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities inactive markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.\n\n \n\n  ● Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value.\n\n \n\nAs of March 31, 2026 and 2025, financial instruments of the Company primarily comprised of cash and cash equivalents, restricted cash, accounts receivables, receivables and other current assets, short-term borrowings, long-term borrowings, accounts payable, and accrued expenses and other expense, lease liabilities and other liabilities.     For lease liabilities, fair value approximates their carrying value at the year-end as the interest rates used to discount the host contracts approximate market rates. The carrying amounts of these financial instruments approximated their fair values because of their generally short maturities. For long-term borrowings, carrying amounts also approximate fair value as they bear interest at market rates, which are consistent with the rates that would be applied in a current market transaction between willing parties.\n\n \n\nThe Company noted no transfers between levels during any of the periods presented. The Company did not have any instruments that were measured at fair value on a recurring nor non-recurring basis as of March 31, 2026 and 2025.\n\n \n\nCash and cash equivalents\n\n \n\nThe Company considers all highly liquid investment instruments with an original maturity of three months or less from the date of purchase to be cash equivalents. The Company maintains most of the bank accounts in the PRC (including HongKong SAR).\n\n \n\nRestricted cash\n\n \n\nRestricted cash is cash held as collateral for transactions and loans the Company has entered into.\n\n \n\nAccounts receivable\n\n \n\nAccounts receivable are recorded at the invoiced amount less an allowance for any uncollectible accounts and do not bear interest, which are due based on the respective contractual credit terms. Management reviews the adequacy of the allowance of expected credit loss on an ongoing basis, using historical collection trends and aging of receivables. The carrying value of such receivable, net of the expected credit loss, represents its estimated realizable value. The Company expect to collect the outstanding balance of current accounts receivable, net within one year.\n\n \n\nThe Company use loss rate method and individual evaluation method to estimate the allowance for credit losses. For those past due balances over one year and other higher risk receivables identified by the Company are reviewed individually for collectability. The Company evaluates the expected credit loss of accounts receivable based on historical collection experience, the financial condition of its customers and assumptions for the future movement of different economic drivers and how these drivers will affect each other. The Company writes off potentially uncollectible accounts receivable against the allowance for credit losses if it is determined that the amounts will not be collected or if a settlement with respect to a disputed receivable is reached for an amount that is less than the carrying value.\n\n \n\nAs of March 31, 2026 and 2025, the Company assessed the recoverability of its accounts receivable and recorded an allowance of $1,940,634 and $2,082,442, respectively.\n\n \n\nF-15\n\n \n\n \n\nNOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)\n\n \n\nInventories\n\n \n\nInventories primarily include raw materials and finished goods.\n\n \n\nInventories are stated at the lower of cost or net realizable value. Cost is determined by the weighted-average method. Raw material cost is based on purchase costs while work-in-progress and finished goods comprise direct materials, direct labor and an allocation of manufacturing overhead costs. Net realizable value represents the anticipated selling price, net of distribution cost, less estimated costs to completion for inventories. The Company regularly assesses inventory obsolescence by reviewing inventory aging, historical turnover rates, and expected future demand based on sales forecasts and market conditions. Slow-moving or obsolete items are identified and written down to their net realizable value. As of March 31, 2026 and 2025, the Company assessed the net realizable value of its inventories and record a provision of $139,542 and $56,414, respectively.\n\n \n\nAdvance to suppliers\n\n \n\nAdvance to suppliers represent amounts advanced to suppliers for future purchases of raw materials and for other services. The suppliers usually require advance payments when the Company makes purchase or orders service, and the advanced payments will be utilized to offset the Company’s future payments. These amounts are unsecured, non-interest bearing and generally short-term in nature.The Company has entered into contracts for software copyrights with future installment payment obligations. See Note 20 – Commitments and Contingencies for details of material capital commitments.\n\n \n\nAllowances are recorded when utilization and collection of amounts due are in doubt. Delinquent prepayments are written-off after management has determined that the likelihood of utilization or collection is not probable and known bad debts are written off against the allowances when identified. As of March 31, 2026 and 2025, the Company record no allowances for advance to suppliers balances, respectively.\n\n \n\nAccounts Payable\n\n \n\nAccounts payable represent unsecured, non-interest-bearing obligations to suppliers for goods and services acquired in the ordinary course of business by our VIE entities. Accounts payable are recognized upon delivery of goods or rendering of services and initially measured at invoice amounts. Supplier payment terms are generally within one year; accordingly, balances are stated at cost (which approximates fair value) and classified as current liabilities. RMB payables are translated to U.S. dollars at period-end exchange rates. Prepayments to suppliers are separately classified and not offset against trade payables without a contractual set-off right.\n\n \n\nContract liabilities\n\n \n\nContract liabilities represent the Company’s obligation to transfer goods or services to a customer for which the Company has received consideration, or an amount of consideration is due from the customer. The Company recognizes contract liabilities when it receives payments from customers before the related performance obligation is satisfied.\n\n \n\nContract liabilities are recognized at the earlier of when the related revenue is recognized or when payments are received in advance of performance. Upon satisfying the performance obligations, the Company recognizes the revenue and reduces the contract liabilities.\n\n \n\nProperty, plant and equipment, net\n\n \n\nProperty, plant and equipment are stated at cost. The straight-line depreciation method is used to compute depreciation over the estimated useful lives of the assets, as follows:\n\n \n\n    Residual\nvalue rate     Useful\nLives\n\nMachinery     5 %   10 years\n\nElectric equipment     5 %   3-5 years\n\nOffice equipment     5 %   5 years\n\nVehicles     5 %   4-10 years\n\nLeasehold improvement cost     5 %   3-10 years (shorter of the lease term and the remaining useful life)\n\n \n\nF-16\n\n \n\n \n\nNOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)\n\n \n\nProperty, plant and equipment, net (continued)\n\n \n\nCosts of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The cost and related accumulated depreciation and amortization of assets disposed of or retired are removed from the accounts, and any resulting gain or loss is reflected in the consolidated income statements.\n\n \n\nIntangible assets, net\n\n \n\nIntangible assets are stated at cost less accumulated amortization. Intangible assets represented the trademarks registered in the PRC and purchased software which are amortized on a straight-line basis over a useful life of 10 years.\n\n \n\nThe Company follows ASC Topic 350 in accounting for intangible assets, which requires impairment losses to be recorded when indicators of impairment are present and the undiscounted cash flows estimated to be generated by the assets are less than the assets’ carrying amounts. For the years ended March 31, 2026 and 2025, the Company recorded no impairment of intangible assets.\n\n \n\nImpairment of long-lived assets\n\n \n\nLong-lived assets primarily include property, plant and equipment, and intangible assets. In accordance with the provision of ASC Topic 360-10-5, “Impairment or Disposal of Long-Lived Assets”, the Company generally conducts its annual impairment evaluation to its long-lived assets, usually in the fourth quarter of each year, or more frequently if indicators of impairment exist, such as a significant sustained change in the business climate. The recoverability of long-lived assets is measured at the reporting unit level, which is an operating segment or one level below an operating segment. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset. The Company record impairment losses for property, plant and equipment of $Nil and $Nil for the years ended March 31, 2026 and 2025, respectively.\n\n \n\nBorrowings and Borrowing Costs\n\n \n\nThe Company records short-term and long-term borrowings at amortized cost. Borrowings bear interest at market contractual rates. Interest expenses, are recognized in profit or loss as incurred. Borrowing costs directly attributable to the acquisition or construction of qualifying assets are capitalized to the cost of such assets until the assets are ready for their intended use; all other borrowing costs are expensed immediately.\n\n Revenue recognition\n\n \n\nRevenue is recognized when control of promised goods is transferred to the Company’s customers in an amount of consideration of which the Company expect to be entitled to in exchange for the goods. The Company does not have performance obligations that extend beyond the point of shipment or delivery. Revenue is recognized at a point in time, which is typically upon shipment or delivery of goods, depending on the shipping terms.\n\n \n\nThe product return provisions are estimated based on (1) historical rates, (2) specific identification of outstanding returns not yet received from customers and outstanding discounts and claims and (3) estimated returns, discounts and claims expected, but not yet finalized with customers. These estimates require judgment and are updated regularly based on actual experience and trends. Changes in return estimates are accounted for prospectively and reflected in revenue in the period of change. The Company recognizes refund obligations as a liability and, when applicable, recognizes a corresponding asset for the right to recover products expected to be returned by customers, which is included in *Inventory*. As of March 31, 2026 and 2025, sales return provision recorded in refund liabilities were $16,563 and $53,885, respectively.\n\n \n\nF-17\n\n \n\n \n\nNOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)\n\n \n\nRevenue recognition (continued)\n\n \n\nWe generated revenues primarily from manufacture and sales of the following products: three types of TCMP products, consisting of Advanced TCMP, Regular TCMP, and others.\n\n \n\nThe following table sets forth the breakdown of revenues by revenue source for each period presented:\n\n \n\n    For the Years Ended\nMarch 31,  \n\n    2026     2025  \n\nAdvanced TCMP   $ 49,516       258,416  \n\nRegular TCMP     1,081,400       1,442,466  \n\nOthers     7,136       40,025  \n\nTotal revenues   $ 1,138,052     $ 1,740,907  \n\n \n\nThe contract liabilities of the Company consist of advance payments from customers. The contract liabilities are reported in a net position on a customer-by-customer basis at the end of each reporting period. Contract liabilities were recognized when the Company receives prepayment from customers resulting from purchase order. Contract liabilities will be recognized as revenue when the controls of products are transferred to customers. As of March 31, 2026 and 2025, the Company record advance from customers of $104,423 and $58,627, respectively.\n\n \n\nThe Company does not have amounts of contract assets since revenue is recognized as control of goods is transferred.\n\n \n\nFor the years ended March 31, 2026, 2025 and 2024, the Company did not have any significant incremental costs of obtaining contracts with customers incurred or costs incurred in fulfilling contracts with customers within the scope of ASC Topic 606, that shall be recognized as an asset and amortized to expenses in a pattern that matches the timing of the revenue recognition of the related contract.  \n\n \n\nCost of revenue\n\n \n\nCost of revenue consists primarily of cost of materials, direct labors, overhead, and other related incidental expenses that are directly attributable to the Company’s principal operations.\n\n \n\nMarket development fees\n\n \n\nMarket development fees relate mainly to market development and advertisements of our pharmaceutical products. For the years ended March 31, 2026 and 2025, marketing and advertising expenses are $89,488 and $108,822, respectively, which are included in selling expenses in our consolidated statements of operations and comprehensive income.\n\n \n\nShare-based Compensation\n\n \n\nThe Company recognizes stock-based compensation expense on a straight-line basis over the applicable requisite service period, based on the grant-date fair value of the award. To the extent a stock-based award is subject to performance conditions, the amount of expense recorded in a given period, if any, reflects the Company’s assessment of the probability of achieving the performance targets.\n\n \n\nFair value of stock options subject to the Company’s employee stock purchase plan are estimated using the Black-Scholes valuation model; fair value of restricted stock unit (“RSU”) awards is based on the closing market price on the day preceding the grant. The company’s accounting treatment of forfeiture expenses reversals is at the forfeiture date and does not estimate future forfeitures prior to their actual occurrence.\n\n \n\nShares to be issued upon the exercise of stock options or the requisite service period of stock awards will come from newly issued shares.\n\n \n\nIncome Taxes\n\n \n\nCurrent income tax expenses are provided for in accordance with the laws of the relevant taxing authorities. As part of the process of preparing financial statements, the Company is required to estimate its income taxes in each of the jurisdictions in which it operates. The Company accounts for income taxes using the liability method, under which deferred income taxes are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized as income or expense in the period that includes the enactment date. Valuation allowance is provided on deferred tax assets to the extent that it is more likely than not that the asset will not be realizable in the foreseeable future.\n\n \n\nThe Company adopts ASC 740-10-25 “Income Taxes” which prescribes a more likely than not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on derecognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods and income tax disclosures. The Company did not have significant unrecognized uncertain tax positions, or any unrecognized liabilities, interest or penalties associated with unrecognized tax benefit as of March 31, 2026 and 2025.\n\n \n\nF-18\n\n \n\n \n\nNOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)\n\n \n\nComprehensive income\n\n \n\nComprehensive income includes net income and foreign currency adjustments. Comprehensive income is reported in the consolidated statements of operations and comprehensive income. Accumulated other comprehensive income, as presented on the balance sheets are the cumulative foreign currency translation adjustments. As of March 31, 2026 and 2025, the Company recorded accumulated other comprehensive loss balances of $197,878 and $1,075,522, respectively.\n\n \n\nLeases \n\n \n\nLeases are classified at lease commencement date as either a finance lease or an operating lease. A lease is a finance lease if it meets any of the following criteria: (a) the lease transfers ownership of the underlying asset to the lessee by the end of the lease term. (b) the lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise, (c) the lease term is for the major part of the remaining economic life of the underlying asset, (d) the present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not already reflected in the lease payments equals or exceeds substantially all of the fair value of the underlying asset or (e) the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. When none of the criteria meets, the lease shall be classified as an operating lease.\n\n \n\nFor lessee, a lease is recognized as a right-of-use asset with a corresponding liability at lease commencement date. The lease liability is calculated at the present value of the lease payments not yet paid by using the lease term and discount rate determined at lease commencement. The right-of-use asset is calculated as the lease liability, increased by any initial direct costs and prepaid lease payments, reduced by any lease incentives received before lease commencement. The right-of-use asset itself is amortized on a straight-line basis unless another systematic method better reflects how the underlying asset will be used by and benefits the lessee over the lease term.\n\n \n\nIn February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). The amendments in this ASU require an entity to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. The amendments also require certain quantitative and qualitative disclosures about leasing arrangements. The Company adopted ASC 842 effective as of the beginning of the year ended March 31, 2023 by using a modified retrospective transition approach in the accompanying financial statements of the Company. The adoption of this standard had a material impact on the Company’s financial position as increased its assets and liabilities due to the recognition of right-of-use assets and lease liabilities on its consolidated balance sheets, and no material impact on its consolidated statements of comprehensive loss and cash flows.\n\n \n\nCommitments and contingencies\n\n \n\nIn the normal course of business, the Company is subject to commitments and contingencies, including operating lease and finance lease commitments, legal proceedings and claims arising out of its business that relate to a wide range of matters, such as government investigations and tax matters. The Company recognizes a liability for such contingency if it determines it is probable that a loss will occur, and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments on liability for contingencies, including historical and the specific facts and circumstances of each matter. \n\n \n\nSegment reporting\n\n \n\nOperating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker, which is a strategic committee comprised of members of the Company’s management team. In the respective periods presented, the Company had one single operating and reportable segment, namely the manufacture and distribution of TCMP. Although TCMP consist of different business units of the Company, information provided to the chief operating decision-maker is at the revenue level and the Company does not allocate operating costs or assets across business units, as the chief operating decision-maker does not use such information to allocate resources or evaluate the performance of the business units. As the Company’s long-lived assets are all located in the PRC and all of the Company’s revenue is derived from within the PRC, no geographical information is presented.\n\n \n\nF-19\n\n \n\n \n\nNOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)\n\n \n\nLoss per share\n\n \n\nLoss per share is calculated in accordance with ASC 260 Earnings per Share. Basic loss per share is computed by dividing the net loss attributable to shareholders of the Company by the weighted average number of ordinary shares outstanding during the year. Diluted loss per share is computed in accordance with the treasury stock method and based on the weighted average number of ordinary shares and dilutive ordinary share equivalents. Dilutive ordinary share equivalents are excluded from the computation of diluted loss per share if their effects would be anti-dilutive. There were no dilutive ordinary share equivalents outstanding during the years ended March 31, 2026 and 2025.\n\n \n\nRelated party transactions\n\n \n\nIn general, related parties exist when there is a relationship that offers the potential for transactions at less than arm’s-length, favorable treatment, or the ability to influence the outcome of events different from that which might result in the absence of that relationship. A related party may be any of the following: a) an affiliate, which is a party that directly or indirectly controls, is controlled by, or is under common control with another party; b) a principle owner, owner of record or known beneficial owner of more than 10% of the voting interest of an entity; c) management, which are persons having responsibility for achieving objectives of the entity and requisite authority to make decision; d) immediate family of management or principal owners; e) a parent company and its subsidiaries; and f) other parties that have ability to significant influence the management or operating policies of the entity.\n\n \n\nSignificant risks and uncertainties\n\n \n\n*Credit risk*\n\n \n\nAssets that potentially subject the Company to significant concentration of credit risk primarily consist of cash and cash equivalents, accounts receivable, other receivables, advances to suppliers. The maximum exposure of such assets to credit risk is their carrying amount as at the balance sheet dates. As of March 31, 2026 and 2025 the Company held cash and cash equivalents of $28,176,233 and $18,129,432, respectively, which were primarily deposited in financial institutions located in Mainland China, which were uninsured by the government authority. To limit exposure to credit risk relating to deposits, the Company primarily place cash deposits with large financial institutions in China which management believes are of high credit quality. The Company’s operations are carried out in Mainland China. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic, and legal environments in the PRC as well as by the general state of the PRC’s economy. In addition, the Company’s business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other factors.\n\n \n\nThe Company conducts credit evaluations of its customers and suppliers and generally does not require collateral or other security from them. The Company use a loss rate method to estimate the allowance for credit losses. For those past due balances over one year and other higher risk receivables identified by the Company are reviewed individually for collectability. The Company evaluates the expected credit loss of receivables based on historical collection experience, the financial condition of its customers and assumptions for the future movement of different economic drivers and how these drivers will affect each other. The Company writes off potentially uncollectible receivables against the allowance for credit losses if it is determined that the amounts will not be collected or if a settlement with respect to a disputed receivable is reached for an amount that is less than the carrying value. As of March 31, 2026 and 2025, the Company record expected credit loss of $1,940,634 and $2,082,442 for accounts receivable, respectively.\n\n \n\n*Liquidity risk*\n\n \n\nThe Company is also exposed to liquidity risk which is risk that it is unable to provide sufficient capital resources and liquidity to meet its commitments and business needs. Liabilities that potentially subject the Company to significant concentration of liquidity risk primarily consist of loans and borrowings (current and non-current portion), accounts payable, amounts due to related parties, and accrued expenses and other liabilities. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, the Company will turn to other financial institutions and the owners to obtain short-term funding to meet the liquidity shortage.\n\n \n\n*Interest Rate Risks*\n\n \n\nAll of the Company’s interest-bearing borrowings carry with fixed interest rate. The Company is not exposed to significant interest rate risk.\n\n \n\nF-20\n\n \n\n \n\nNOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)\n\n \n\nSignificant risks and uncertainties (continued)\n\n \n\n*Foreign currency risk*\n\n \n\nThe Company has significant operating activities, thus has assets and liabilities are denominated in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the Peoples’ Bank of China (“PBOC”) or other authorized financial institutions at exchange rates quoted by PBOC. Approval of foreign currency payments by the PBOC or other regulatory institutions requires submitting a payment application form together with suppliers ‘invoices and signed contracts”. The value of RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. Where there is a significant change in value of RMB, the gains and losses resulting from translation of financial statements of a foreign subsidiary will be significantly affected.\n\n \n\n*Concentration risk*\n\n \n\nSignificant customers and suppliers are those that account for greater than 10% of the Company’s revenues and purchases, respectively. The loss of any of the Company’s significant supplier or the failure to purchase key raw material could have a material adverse effect on our business, consolidated results of operations and financial condition.\n\n \n\nFor the years ended March 31, 2026 and 2025, there were one customer and two customers generated sales which accounted for over 10% of total revenues generated for that year, respectively. The details are as follows:\n\n \n\n    For the years ended,\nMarch 31,  \n\n    2026     2025  \n\nCustomer A     86.95 %     68.72 %\n\nCustomer B     - %     1.79 %\n\n \n\nAs of March 31, 2026 and 2025, accounts receivable due from these customers as a percentage of consolidated accounts receivable balances were as follows:\n\n \n\n    As of March 31,  \n\n    2026     2025  \n\nCustomer A     27.22 %     28.25 %\n\nCustomer B     - %     - %\n\n \n\nFor the years ended March 31, 2026 and 2025, there were two suppliers and two suppliers which accounted for over 10% of total purchase for that year, respectively. The details are as follows:\n\n \n\n    For the years ended,\nMarch 31,  \n\n    2026     2025  \n\nSupplier A     73.25 %     53.88 %\n\nSupplier B     19.67 %     29.57 %\n\n \n\nAs of March 31, 2026 and 2025, accounts payable due to these suppliers as a percentage of consolidated accounts payable balances were as follows:\n\n \n\n    As of March 31,  \n\n    2026     2025  \n\nSupplier C     21.27 %     62.51 %\n\nSupplier A     22.61 %     - %\n\n \n\nF-21\n\n \n\n \n\nNOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)\n\n \n\nRecent accounting pronouncements\n\n \n\nIn December 2023, FASB issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740)” (“ASU 2023-09”). The amendments in ASU 2023-09 address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. One of the amendments in ASU 2023-09 includes disclosure of, on an annual basis, a tabular rate reconciliation of (i) the reported income tax expense (or benefit) from continuing operations, to (ii) the product of the income (or loss) from continuing operations before income taxes and the applicable statutory federal income tax rate of the jurisdiction of domicile using specific categories, including separate disclosure for any reconciling items within certain categories that are equal to or greater than a specified quantitative threshold of 5%. ASU 2023-09 also requires disclosure of, on an annual basis, the year to date amount of income taxes paid (net of refunds received) disaggregated by federal, state, and foreign jurisdictions, including additional disaggregated information on income taxes paid (net of refunds received) to an individual jurisdiction equal to or greater than 5% of total income taxes paid (net of refunds received). The amendments in ASU2023-09 are effective for annual periods beginning after December 15, 2024, and should be applied prospectively.\n\n \n\nIn November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income (Topic 220-40): Expense Disaggregation Disclosures (“ASU 2024-03”). This update requires, among other things, more detailed disclosure about types of expenses in commonly presented expense captions such as cost of sales andselling, general, and administrative expenses, and is intended to improve the disclosures about an entity’s expenses including purchases of inventory, employee compensation, depreciation and amortization. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.\n\n \n\nIn January 2025, the FASB issued ASU 2025-01, which clarifies the effective date of ASU 2024-03 for non-calendar year-end entities. ASU 2024-03 and ASU 2025-01 are effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted.\n\n \n\nIn July 2025, the FASB issued ASU 2025-05, which simplifies credit loss measurement for current accounts receivable and contract assets under Topic 326. This standard is effective for all entities for annual reporting periods beginning after December 15, 2025, including interim periods within those fiscal years. Early adoption is permitted.\n\n \n\nIn December 2025, the FASB issued ASU 2025-11, which enhances interim reporting guidance under Topic 270. For public business entities, ASU 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. For all other entities, it is effective for interim reporting periods within annual reporting periods beginning after December 15, 2028. Early adoption is permitted for all entities.\n\n \n\nThe Company has evaluated these and other recently issued but not yet effective accounting standards. The Company does not expect their adoption to have a material effect on its financial position, results of operations, or cash flows, and no early adoption is planned at this time.\n\n \n\nThe Company does not believe other recently issued but not yet effective accounting standards, if recently adopted, would have a material effect on the Company’s consolidated balance sheets, statements of income (loss) and comprehensive income (loss) and statements of cash flows. \n\n \n\nF-22\n\n \n\n \n\nNOTE 3 – ACCOUNTS RECEIVABLE, NET\n\n \n\nAccounts receivable consisted of the following as of March 31, 2026 and 2025:\n\n \n\n    As of March 31,  \n\n    2026     2025  \n\n             \n\nAccounts receivable – third parties   $ 2,872,201     $ 3,383,777  \n\nTotal accounts receivable, gross     2,872,201       3,383,777  \n\nLess: allowance for credit loss     (1,940,634 )     (2,082,442 )\n\nAccounts receivable, net   $ 931,567     $ 1,301,335  \n\n \n\nChanges of allowance for credit loss for accounts receivable for the fiscal years ended March 31, 2026 and 2025 are as follows:\n\n \n\n    For the years ended\nMarch 31,  \n\n    2026     2025  \n\n             \n\nBeginning balance   $ 2,082,442     $ 1,731,517  \n\nAllowance for expected credit loss     128,265       263,972  \n\nWrite-off against allowance     (383,878 )     -  \n\nExchange rate difference     113,805       86,953  \n\nEnding balance   $ 1,940,634     $ 2,082,442  \n\n \n\nFor the years ended March 31, 2026 and 2025, the Company recorded credit loss of $128,265 and $263,972, respectively.\n\n \n\nNOTE 4 – INVENTORIES, NET\n\n \n\nInventories as of March 31, 2026 and 2025 consisted of the following:\n\n \n\n    As of March 31,  \n\n    2026     2025  \n\n             \n\nRaw materials   $ 276,999     $ 435,799  \n\nFinished goods     639,602       448,668  \n\nAllowance for inventories write-down\n    (139,542 )     (56,414 )\n\nTotal inventories, net   $ 777,059     $ 828,053  \n\n \n\nFor the years ended March 31, 2026 and 2025, the Company recorded an inventories write-down of $53,955 and an inventory provision reversal of $22,863, respectively.\n\n \n\nF-23\n\n \n\n \n\nNOTE 5 – OTHER RECEIVABLES AND OTHER CURRENT ASSETS, NET\n\n \n\nOther receivables and other current assets consisted of the following as of March 31, 2026 and 2025:\n\n \n\n    As of March 31,  \n\n    2026     2025  \n\n             \n\nDeposits     144,970       137,804  \n\nLoan receivables*     97,854       124,712  \n\nOther receivables     183,998       108,281  \n\nTotal other receivables and other current assets, gross     426,822       370,797  \n\nLess: allowance for credit loss     (54,430 )     (51,739 )\n\nTotal other receivables and other current assets, net   $ 372,392     $ 319,058  \n\n \n\n*\nLoan receivables represent temporary interest-free advances provided by the Company to its employees for short-term personal liquidity needs. These advances are repayable on demand and expected to be fully settled by March 31, 2027\n\n \n\n Changes of allowance for credit loss for other receivables and other current assets, for the fiscal years ended March 31, 2026 and 2025 are as follows:\n\n \n\n    For the years ended\nMarch 31,  \n\n    2026     2025  \n\n             \n\nBeginning balance   $ 51,739     $ 52,000  \n\nExchange rate difference     2,691       (261 )\n\nEnding balance   $ 54,430     $ 51,739  \n\n \n\nNOTE 6 – PROPERTY, PLANT AND EQUIPMENT\n\n \n\nProperty, plant and equipment consisted of the following as of March 31, 2026 and 2025:\n\n \n\n    As of March 31,  \n\n    2026     2025  \n\n             \n\nMachinery   $ 781,541     $ 742,909  \n\nVehicles     84,758       80,568  \n\nElectric equipment     150,778       143,325  \n\nOffice equipment     80,483       76,505  \n\nLeasehold improvement     1,640,872       1,559,764  \n\nTotal property plant and equipment, at cost     2,738,432       2,603,071  \n\nLess: accumulated depreciation     (2,203,651 )     (2,027,478 )\n\nLess: accumulated impairment     (417,678 )     (397,032 )\n\nTotal property, plant and equipment, net   $ 117,103     $ 178,561  \n\n \n\nDepreciation expenses were $67,843 and $75,059 for the years ended March 31, 2026 and 2025, respectively. For the years ended March 31, 2026 and 2025, the Company recorded no impairment of property, plant and equipment. Movements in accumulated impairment were due to foreign currency translation differences.\n\n \n\nFor the year ended March 31, 2025, the Company disposed a vehicle with carrying amount of $76,005 (cost of $136,335 and accumulated depreciation of $60,330) for the settlement of car loan balances. The Company received cash of $65,539 and recorded loss from the disposal of property, plant and equipment of $10,466 in *other income (expenses), net*.\n\n \n\nF-24\n\n \n\n \n\nNOTE 7 – INTANGIBLE ASSETS, NET\n\n \n\nIntangible assets consisted of the following as of March 31, 2026 and 2025:\n\n \n\n    As of March 31,  \n\n    2026     2025  \n\n             \n\nTrademark   $ 44,121     $ 41,940  \n\nSoftware     34,663       32,950  \n\nTotal intangible assets, at cost     78,784       74,890  \n\nLess: accumulated amortization     (72,456 )     (63,082 )\n\nTotal intangible assets, net   $ 6,328     $ 11,808  \n\n \n\nAmortization expenses were $5,825 and $7,238 for year ended March 31, 2026 and 2025, respectively. \n\n \n\nNOTE 8 – OPERATING LEASES\n\n \n\nOn January 1, 2018, the Company entered into a lease agreement with its related party company to obtain the right of use for office and warehouse of 3,627 square meters for 10 years for free. The Company recorded right-of-use assets and lease expenses based on the fair value for the lease at initial recognition. As the leases do not provide an implicit rate, the Company used an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company’s lease agreements do not contain any material guarantees or restrictive covenants. The Company does not have any sublease activities.\n\n \n\nOperating lease right-of-use assets as of March 31, 2026 and 2025 were as follows:\n\n \n\n    As of March 31,  \n\n    2026     2025  \n\n             \n\nOffice and warehouse   $ 359,500     $ 341,730  \n\nLess: accumulated depreciation     (238,079 )     (165,082 )\n\nTotal right-of-use assets, net   $ 121,421     $ 176,648  \n\n \n\nThe Company recognized depreciation expenses for the operating lease right-of-use assets office and warehouse over the lease period which is 10 years. For the years ended March 31, 2026 and 2025, the depreciation expenses were $69,551 and $69,343, respectively.\n\n \n\nOperating lease liabilities as of March 31, 2026 and 2025 consisted of the following:\n\n \n\n    As of March 31,  \n\n    2026     2025  \n\n             \n\nOffice and warehouse   $ 121,421     $ 176,648  \n\nTotal operating lease liabilities, net   $ 121,421     $ 176,648  \n\n \n\nF-25\n\n \n\n \n\nNOTE 8 – OPERATING LEASES (CONTINUED)\n\n \n\nCurrent portion and non-current portion of operating lease liabilities as of March 31, 2026 and 2025:\n\n \n\n    As of March 31,  \n\n    2026     2025  \n\n             \n\nNon-current portion of operating lease liabilities – related party   $ 53,442     $ 115,419  \n\nCurrent portion of operating lease liabilities – related party     67,979       61,229  \n\nTotal operating lease liabilities   $ 121,421     $ 176,648  \n\n \n\nThe discount rate used for the office and warehouse was 5.40%. The remaining lease term for the operating lease was 1.75 years.\n\n \n\nMaturity analysis of operating lease liabilities as of March 31, 2026 is as follows:\n\n \n\n    Office and warehouse  \n\n    RMB     USD  \n\n             \n\nDiscount rate at commencement     5.40 %     5.40 %\n\nLess than one year     500,400     $ 72,543  \n\nBetween one to two years     375,300       54,407  \n\n                 \n\nTotal undiscounted cash flows     875,700     $ 126,950  \n\nLess: imputed interest     (38,139 )     (5,529 )\n\nOperating lease liabilities     837,561       121,421  \n\n \n\nThe Company had no other operating or financing lease agreements or short-term leases, defined as leases with initial term of 12 months or less, for the years ended March 31, 2026 and 2025.\n\n \n\nNOTE 9 – BORROWINGS\n\n \n\nShort-term borrowings\n\n \n\nShort-term borrowings consisted of the following as of March 31, 2026 and 2025:\n\n \n\n    As of March 31,  \n\n    2026     2025  \n\n             \n\nShort-term loans from a related party   $ -     $ 13,780  \n\nShort-term loans from third-party individuals     355,175       688,404  \n\nTotal short-term borrowings   $ 355,175     $ 702,184  \n\n \n\nAs of March 31, 2026 and 2025, short-term loans from a related party represented the unsecured loan of $Nil and $13,780, respectively, that the Company borrowed from Jun Zheng a director of the Company which have no fixed repayment term and bear interest of 6%. Short-term loans from third-party individuals represented the unsecured loans of $355,175 and $688,404 the Company borrowed from several unaffiliated individuals as of March 31, 2026 and 2025, with loan terms from May 8, 2025 to November 10, 2026 and interest rate of 6%.\n\n \n\nAs of March 31, 2026 and 2025, the total amount of these loans was $355,175 and $702,184, respectively. The Company recorded interest expenses of $14,247 and $15,431 on these short-term loans for the years ended March 31, 2026 and 2025, respectively.\n\n \n\nF-26\n\n \n\n \n\nNOTE 9 – BORROWINGS (CONTINUED)\n\n \n\nLong-term borrowings\n\n \n\nLong-term borrowings consisted of the following as of March 31, 2026 and 2025:\n\n \n\n    As of March 31,  \n\n    2026     2025  \n\nCar loans            \n\nCurrent portion   $ -     $ 8,781  \n\nNon-current portion     -       -  \n\nTotal car loans   $ -     $ 8,781  \n\n \n\n    As of March 31,  \n\n    2026     2025  \n\nBank loans            \n\nCurrent portion   $ -     $ -  \n\nNon-current portion     -       96,264  \n\nTotal long-term bank loans   $ -     $ 96,264  \n\n \n\n    As of March 31,  \n\n    2026     2025  \n\nOther loans            \n\nCurrent portion   $ -     $ -  \n\nNon-current portion     644,390       -  \n\nTotal other long-term  loans   $ 644,390     $ -  \n\n \n\nLong-term bank loans are loans the Company borrowed from Jiangsu Taizhou Rural Commercial Bank which are mature on March 31, 2028 and bear interest of 6%. As of March 31, 2026 and 2025 the total amount of these loans was Nil and $96,264, respectively.\n\n \n\nThe Company recorded interest expenses for the bank loan of $Nil and $5,808 for the years ended March 31, 2026 and 2025, respectively.\n\n \n\nAs of March 31, 2026 and 2025, one car loan of $Nil, at 18% annual interest rate is valid from February 1, 2023 to January 30, 2028, which was terminated on the date of disposal of the car *(Note - 6)*. The car was pledged as collateral for the loan until full settlement. The Company recorded interest expenses for the car loan of $Nil and $449 for the years ended March 31, 2026 and 2025, respectively.\n\n \n\nThe other long-term loans was the Company borrowed from third-party individuals which are mature on March 31, 2028 and bear interest of 6%. As of March 31, 2026 and 2025 the total amount of these loans was $644,390 and Nil, respectively. The Company recorded interest expenses for the loan of $39,060 and $Nil for the years ended March 31, 2026 and 2025, respectively.\n\n \n\nFuture loan payments as of March 31, 2026 is as follows:\n\n \n\n    RMB     USD  \n\n             \n\nLess than one year     2,450,000     $ 355,175  \n\nBetween one to two years     4,445,000       644,390  \n\nTotal payment     6,895,000     $ 999,565  \n\n \n\nF-27\n\n \n\n \n\nNOTE 10 – CONTRACT LIABILITIES\n\n \n\nContract liabilities consisted of the following as of March 31, 2026 and 2025:\n\n \n\n    For the years ended\nMarch 31,  \n\n    2026     2025  \n\n             \n\nBeginning balance   $ 58,627     $ 187,665  \n\nPrepayments from customers     83,526       20,018  \n\nRevenue recognized     (42,541 )     (148,831 )\n\nExchange rate difference     4,811       (225 )\n\nEnding balance   $ 104,423     $ 58,627  \n\n \n\nFor the years ended March 31, 2026 and 2025, the Company recognized $42,541 and $148,831 of revenue, which were included in the contract liabilities balances at the beginning of the periods, respectively.\n\n \n\nNOTE 11 – CONVERTIBLE NOTE\n\n \n\nThe Convertible Note 2022-2\n\n \n\nOn December 19, 2022, the Company entered into a securities purchase agreement with Streeterville, pursuant to which the Company issued the investor an unsecured promissory note on December 19, 2022 in the original principal amount of $1,595,000 (the “Convertible Note 2022-2”), convertible into ordinary shares, $0.08 par value per share, of the Company for $1,500,000 in gross proceeds. The Company anticipates using the proceeds for general working capital purposes.\n\n \n\nFor the year ended March 31, 2024, the Company issued 608,525 ordinary shares with a fair value of $844,000 for principal and interest partial settlement of the Convertible Note 2022-2 (new).\n\n \n\nFor the year ended March 31, 2025, the Company issued 874,788 ordinary shares for principal and interest partial settlement of the Convertible Note 2022-2 (new).\n\n \n\nThe Convertible Note 2022-2 (new) was fully repaid on June 12, 2024.\n\n \n\nThe Convertible Note 2023-1\n\n \n\nOn March 7, 2023, the Company entered into a securities purchase agreement with Streeterville Capital, LLC, pursuant to which the Company issued the investor an unsecured promissory note on March 7, 2023 in the original principal amount of $2,126,667 (the “Convertible Note 2023-1”), convertible into ordinary shares, $0.08 par value per share, of the Company for $2,000,000 in gross proceeds. The Company anticipates using the proceeds for general working capital purposes.\n\n \n\nFor the year ended March 31, 2023, the Company issued 987,881 ordinary shares with a fair value of $225,000 for principal and interest partial settlement of the Convertible Note 2023-1.\n\n \n\nFor the year ended March 31, 2024, the Company issued 7,417,064 ordinary shares with a fair value of $1,969,807 for principal and interest partial settlement of the Convertible Note 2023-1.\n\n \n\nThe Convertible Note 2023-1 was fully repaid on January 25, 2024.\n\n \n\nThe Convertible Note 2023-2\n\n \n\nOn December 13, 2023, the Company entered into a securities purchase agreement with Streeterville Capital, LLC, pursuant to which the Company issued the investor an unsecured promissory note on December 13, 2023 in the original principal amount of $531,667 (the “Convertible Note 2023-2”), convertible into ordinary shares, $2 par value per share, of the Company for $500,000 in gross proceeds. The Company anticipates using the proceeds for general working capital purposes.\n\n \n\nF-28\n\n \n\n \n\nNOTE 11 – CONVERTIBLE NOTE (CONTINUED)\n\n \n\nThe Convertible Note 2023-2 (continued)\n\n \n\nFor the year ended March 31, 2025, the Company issued 813,477 ordinary shares for principal and interest partial settlement of the Convertible Note 2023-2.\n\n \n\nThe Convertible Note 2023-2 was fully repaid on September 23, 2024.\n\n \n\nThe Convertible Note 2024-1\n\n \n\nOn March 27, 2024, the Company entered into a securities purchase agreement with Streeterville Capital, LLC, pursuant to which the Company issued the investor an unsecured promissory note on March 27, 2024 in the original principal amount of $531,667 (the “Convertible Note 2024-1”), convertible into ordinary shares, $2 par value per share, of the Company for $500,000 in gross proceeds. The Company anticipates using the proceeds for general working capital purposes.\n\n \n\nFor the year ended March 31, 2025, the Company issued 1,509,385 ordinary shares for principal and interest partial settlement of the Convertible Note 2024-1.\n\n \n\nThe Convertible Note 2024-1 was fully repaid on December 24, 2024.\n\n \n\nThe Convertible Note 2024-2\n\n \n\nOn May 9, 2024, the Company entered into a securities purchase agreement with Streeterville Capital, LLC, pursuant to which the Company issued the investor an unsecured promissory note on May 9, 2024 in the original principal amount of $797,500 (the “Convertible Note 2024-2”), convertible into ordinary shares, $2 par value per share, of the Company for $750,000 in gross proceeds. The Company anticipates using the proceeds for general working capital purposes.\n\n \n\nFor the year ended March 31, 2025, the Company issued 368,514 ordinary shares for principal and interest partial settlement of the Convertible Note 2024-2.\n\n \n\nThe Company paid off the remaining balance of the Convertible Note 2024-2 fully in cash on January 17, 2025.\n\n \n\nThe Convertible Note 2024-3\n\n \n\nOn October 10, 2024, the Company entered into a securities purchase agreement with Streeterville Capital, LLC, pursuant to which the Company issued the investor an unsecured promissory note on October 10, 2024 in the original principal amount of $797,500 (the “Convertible Note 2024-3”), convertible into ordinary shares, $2 par value per share, of the Company for $750,000 in gross proceeds. The Company anticipates using the proceeds for general working capital purposes.\n\n \n\nThe Company paid off the remaining balance of the Convertible Note 2024-2 fully in cash on January 17, 2025.\n\n \n\nF-29\n\n \n\n \n\nNOTE 11 – CONVERTIBLE NOTE (CONTINUED) \n\n \n\nThe Convertible Note 2024-3 (continued)\n\n \n\nNet carrying amount of Convertible Notes dated as of March 31, 2026 and 2025 was $Nil.\n\n  \n\nAmortization of issuance cost, debt discount and interest expense for the year ended March 31, 2025 were as follows:\n\n \n\n    Accretion of debt\ndiscount     Convertible\nnote\ninterest     Total  \n\n                   \n\nConvertible Note – 2022-2 (new)   $ -     $ 19,586     $ 19,586  \n\nConvertible Note – 2023-2     39,632       15,880       55,512  \n\nConvertible Note – 2024     47,972       23,956       71,928  \n\nConvertible Note – 2024-2     65,169       33,768       98,937  \n\nConvertible Note – 2024-3     368,014       13,048       381,062  \n\nTotal   $ 520,787     $ 106,238     $ 627,025  \n\n \n\nAmortization of issuance cost, debt discount and interest cost for the year ended March 31, 2024 were as follows:\n\n \n\n    Accretion of debt\ndiscount     Convertible\nnote\ninterest     Total  \n\n                   \n\nConvertible Note – 2022-2   $ 163,967     $ 71,388     $ 235,355  \n\nConvertible Note – 2022-2 (new)     -       27,500       27,500  \n\nConvertible Note – 2023-1     112,826       123,088       235,914  \n\nConvertible Note – 2023-2     15,600       9,345       24,945  \n\nConvertible Note – 2024-1     378       262       640  \n\nTotal   $ 292,771     $ 231,583     $ 524,354  \n\n \n\nNOTE 12 – REFUND LIABILITIES\n\n \n\nRefund liabilities represent the accrued liability for sales return based on the sales and the Company’s estimate of sale return rate.\n\n \n\nEstimates of discretionary authorized returns, discounts and claims are based on (1) historical rates, (2) specific identification of outstanding returns not yet received from customers and outstanding discounts and claims and (3) estimated returns, discounts and claims expected, but not yet finalized with customers. Actual returns, discounts and claims in any future period are inherently uncertain and thus may differ from estimates recorded. If actual or expected future returns, discounts or claims were significantly greater or lower than the reserves established, a reduction or increase to net revenues would be recorded in the period in which such determination was made.\n\n \n\nThe estimated cost of inventory for product returns of $7,214 and $26,371, respectively, were recorded in inventories on the consolidated balance sheets as of March 31, 2026 and 2025.\n\n \n\nNOTE 13 – ACCRUED EXPENSES AND OTHER LIABILITIES\n\n \n\nAccrued expenses and other liabilities consisted of the following as of March 31, 2026 and 2025:\n\n \n\n    As of March 31,  \n\n    2026     2025  \n\n             \n\nAccrued payroll and welfare   $ 906,148     $ 909,904  \n\nOther payable for construction deposit*     1,377,182       1,159,135  \n\nAccrued professional service expenses     143,910       194,222  \n\nOther current liabilities**     877,421       674,391  \n\nTotal   $ 3,304,661     $ 2,937,652  \n\n \n\n* As of March 31, 2026 and 2025, the balances of other payable for construction deposit of $1,377,182 and $1,159,135, respectively. These amounts represent a construction deposit paid to the Company by an unaffiliated third party in connection with a tourism town development project, for which the third party was engaged by the Company to carry out the construction work.\n\n \n\nIn 2019, the unaffiliated party paid the Company $1,330,556 (RMB 9,500,000) as a construction deposit to secure its role in implementing the project. However, due to the third party’s failure to obtain the required construction permits in a timely manner, the project was unable to progress as originally scheduled. In 2023, the Company refunded $150,000 of the deposit to the third party to support certain preliminary preparations, which is expected to be repaid to the Company when the project formally commences.\n\n \n\nAs the delay in the project was solely due to the third party’s failure to fulfill its permit-related obligations, and the Company was not in breach of any agreement, the remaining balance of the deposit has not been returned. The Company continues to recognize the amount as a liability until further resolution of the project status.\n\n \n\n** As of March 31, 2026 and 2025, the balances of other current liabilities $877,421 and $674,391, respectively, represented amounts due to suppliers for operating expenses and to staff who paid for operating expenses on behalf of the Company.\n\n \n\nF-30\n\n \n\n \n\nNOTE 14 – SHAREHOLDERS’ EQUITY\n\n \n\n*Ordinary shares *\n\n \n\nThe Company is authorized to issue unlimited shares of $0.001 par value common stock. On July 4, 2017, and October 20, 2017, the Company issued common stocks of an aggregate of 20,000,000 shares of $0.001 par value (8 shares of no par value retrospectively restated for effect of reverse stock splits on February 22, 2021, May 19, 2022, October 5, 2023 February 25, 2025, and February 3, 2026, and par value elimination on September 29, 2023) to thirteen shareholders, three among whom together hold 100% shares of Suxuantang and over 50% shares of SXT. In connection with Restructuring, all shares and per share amounts have been retroactively restated as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements.\n\n \n\nInitial public offering\n\n \n\nOn December 31, 2018, the Company completed the closing of its initial public offering of 2,506,300 ordinary shares at a public offering price of $4.00 per ordinary share (1 ordinary shares at a price of $9,600,000 per ordinary share retrospectively restated for effect of reverse stock splits on February 22, 2021, May 19, 2022, October 5, 2023 and February 25, 2025, February 3, 2026, and par value elimination on September 29, 2023). On January 3, 2019, the Company sold an additional 39,975 ordinary shares at the public offering price of $4.00 per share (0.02 ordinary shares at a price of $9,600,000 per ordinary share retrospectively restated for effect of reverse stock splits on February 22, 2021, May 19, 2022, October 5, 2023 February 25, 2025,and February 3, 2026,and par value elimination on September 29, 2023) in a second closing. The total gross proceeds from the initial public offering were approximately $10.2 million before underwriting commissions and offering expenses. On January 10, 2019, the underwriter exercise the warrants in connection with the initial public offering and 160,426 shares (0.07ordinary shares retrospectively restated for effect of reverse stock splits on February 22, 2021, May 19, 2022, October 5, 2023,February 25, 2025 and February 3, 2026 ) were newly issued.\n\n \n\nReverse stock splits\n\n \n\nOn February 22, 2021, May 19, 2022, October 5, 2023, and February 25, 2025, the Company’s board of directors approved and effected one-for-four (1:4), one-for-twenty (1:20), one-for-twenty-five (1:25), and one-for-eight (1:8) reverse stock splits, respectively (collectively, the “reverse stock splits”). In connection with the 2021 and 2022 reverse stock splits, the par value of each ordinary share was proportionally increased from US$0.001 to US$0.004 and from US$0.004 to US$0.08, respectively. On September 29, 2023, the Company’s board of directors approved the elimination of par value for its ordinary shares, and thereafter, no par value is assigned to the ordinary shares. Accordingly, the reverse stock splits effected on October 5, 2023 and February 25, 2025 did not involve any change in par value for its ordinary shares.On January 30, 2026, the Company announced a 1-for-150 share consolidation (reverse stock split) approved by the board of directors via unanimous written resolution dated November 25, 2025, effective February 3, 2026. All share and per-share amounts in these consolidated financial statements have been retrospectively adjusted to reflect this share consolidation together with all prior reverse stock splits. Immediately prior to the share consolidation, 143,693,892 Class A ordinary shares were issued and outstanding. Every 150 shares (or part thereof) were combined into one share, with fractional shares rounded up to the next whole share. Approximately 957,960 Class A ordinary shares were outstanding immediately after consolidation. As certified by the transfer agent as of March 31, 2026, total issued and outstanding Class A ordinary shares were 958,077. No Class B ordinary shares were issued or outstanding as of March 31, 2026.\n\n \n\nAs a result of each reverse stock split, each specified number of pre-split ordinary shares outstanding was automatically combined and converted into one issued and outstanding ordinary share without any action required on the part of shareholders. No fractional shares were issued; instead, each shareholder was entitled to receive one whole ordinary share in lieu of any fractional share that would otherwise have resulted. All options and other outstanding securities convertible or exercisable for ordinary shares were adjusted proportionally by dividing the number of ordinary shares into which such instruments were exercisable or convertible by the applicable split ratio and multiplying the exercise or conversion price by the same ratio.\n\n \n\nAll share and per share amounts in the accompanying consolidated financial statements and notes have been retroactively adjusted to reflect the effects of the reverse stock splits, including rounding of fractional shares to whole shares where applicable.\n\n \n\nF-31\n\n \n\n \n\nNOTE 14 – SHAREHOLDERS’ EQUITY (CONTINUED)\n\n \n\nSecurities purchase agreements\n\n \n\nOn January 21, 2025, the Company entered into a securities purchase agreement with certain investors, pursuant to which it issued an aggregate of 14,200,000 ordinary shares (11,833 ordinary shares retrospectively restated for effect of reverse stock split on February 25, 2025 and February 3, 2026) with no par value at a purchase price of $0.20 per share to the investor. In connection with this agreement, the Company also issued warrants to purchase up to 28,400,000 ordinary shares. On March 13, 2025, the Company entered into a warrant exchange agreement with certain holders of these warrants, pursuant to which a total of 28,400,000 warrants were surrendered for cancellation, and in exchange, the Company issued an aggregate of 11,225,000 ordinary shares to these warrants’ holders.\n\n \n\nEquity incentive plan\n\n \n\nIn April 2025, the Company adopted the 2025 Equity Incentive Plan (the “2025 Plan”). The 2025 Plan provides for the granting of restricted share units (“RSUs”), incentive share options, restricted shares and other share-based awards to employees, consultants and advisors of the Company. The Company’s board of directors approved the 2025 Plan and the grant of RSUs thereunder by unanimous written consent dated April 1, 2025.Pursuant to the 2025 Plan, the Company granted an aggregate of 2,064,490 RSUs (13,763 shares retrospectively restated for effect of reverse stock split on February 3, 2026) to three consultants on April 1, 2025. These RSUs vested immediately upon grant.\n\n \n\nOn June 5, 2025, the Company adopted a corporate resolution to authorize the issuance of these 90,000,000 shares, which are classified as “Free Trading”. The warrants were originally issued pursuant to a prospectus supplement under the Company’s effective Form F-3 registration statement (File No. 333-282776), and the shares issued upon cashless exercise are exempt from additional registration under the Securities Act of 1933. \n\n \n\nSecurities purchase agreement\n\n \n\nOn January 21, 2025, the Company entered into a securities purchase agreement with certain investors, pursuant to which it issued an aggregate of 14,200,000 ordinary shares (11,833 ordinary shares retrospectively restated for effect of reverse stock split on February 25, 2025 and February 3, 2026) with no par value at a purchase price of $0.20 per share to the investor. In connection with this agreement, the Company also issued warrants to purchase up to 28,400,000 ordinary shares. On March 13, 2025, the Company entered into a warrant exchange agreement with certain holders of these warrants, pursuant to which a total of 28,400,000 warrants were surrendered for cancellation, and in exchange, the Company issued an aggregate of 11,225,000 ordinary shares to these warrants’ holders.\n\n \n\nF-32\n\n \n\n \n\nNOTE 14 – SHAREHOLDERS’ EQUITY (CONTINUED)\n\n \n\n2025 Securities Purchase Agreements\n\n \n\nOn May 5, 2025, the Company entered into a Securities Purchase Agreement with an investor, pursuant to which the Company agreed to sell and issue 200,000 ordinary shares, with no par value, at a purchase price of $0.50 per share(1,333 ordinary shares at a price of $75 per ordinary share retrospectively restated for effect of reverse stock splits on February 3, 2026,and par value elimination on September 29, 2023). The offering closed on May 8, 2025, with aggregate gross proceeds of approximately $100,000 before deducting offering expenses.\n\n \n\nOn May 16, 2025, the Company adopted a corporate resolution to issue 10,000,000 ordinary shares to 16 non-U.S. investors at a per share price of $0.51(666,667 ordinary shares at a price of $76.5 per ordinary share retrospectively restated for effect of reverse stock splits on February 3, 2026,and par value elimination on September 29, 2023). The shares are classified as “Free Trading” and were issued pursuant to the Company’s effective Form F-3 registration statement (File No. 333-282776). The issuance was authorized by the Company’s Co-Chief Executive Officer and recorded in the Company’s stock transfer books by Transhare Corporation, the stock transfer agent.\n\n \n\nOn January 12, 2026, the Company completed a PIPE financing transaction under its effective Form F-3 shelf registration statement (File No. 333-291428). Pursuant to a securities purchase agreement dated January 9, 2026, the Company issued 12,000,000 Class A ordinary shares at a price of $0.15 per share, and pre-funded warrants to purchase 54,666,666 Class A ordinary shares(80,000 ordinary shares at a price of $22.5 per ordinary share retrospectively restated for effect of reverse stock splits on February 3, 2026,and par value elimination on September 29, 2023). The pre-funded warrants have a nominal exercise price of $0.001 per share. Because the exercise price is fixed and the warrants contain no price-reset or down-round features, they are classified as equity. The gross proceeds from the offering were $9,999,999.90, allocated $1,800,000 to the ordinary shares and $8,199,999.90 to the additional paid-in capital – pre-funded warrants.\n\n \n\nIssuance costs associated with the offering (including legal, printing, professional service fees and placement agent fees) totaled $890,019.90. These costs were allocated on a pro-rata basis: $160,203.58 (18%) to the ordinary shares and $729,816.32 (82%) to the additional paid-in capital – pre-funded warrants, reducing the respective equity accounts. After deducting issuance costs, net cash proceeds were $9,109,980. As of March 31, 2026, none of the pre-funded warrants had been exercised.\n\n \n\nIssuance of shares for convertible note principal and interest partial settlement\n\n \n\nFor the year ended March 31, 2025, 3,566,164 ordinary shares (445,770 ordinary shares retrospectively restated for effect of reverse stock split on February 25, 2025) were issued with a fair value of $ 2,102,704 for convertible notes principal and interest settlement. \n\n \n\nNOTE 15 – SELLING AND MARKETING EXPENSES\n\n \n\nFor the years ended March 31, 2026, 2025 and 2024, selling and marketing expenses consisted of the following: \n\n \n\n    For the years ended March 31,  \n\n    2026     2025     2024  \n\n                   \n\nMarketing and advertising expenses   $ 89,488     $ 108,822     $ 327,208  \n\nPayroll and welfare expenses     60,025       61,284       67,831  \n\nDistribution and transportation expenses     6,958       25,184       16,176  \n\nOthers     87,714       94,569       22,351  \n\nTotal selling and marketing expenses   $ 244,185     $ 289,859     $ 433,566  \n\n \n\nF-33\n\n \n\n \n\nNOTE 16 – GENERAL AND ADMINISTRATIVE EXPENSES\n\n \n\nFor the years ended March 31, 2026, 2025 and 2024, general and administrative expenses consisted of the following: \n\n \n\n    For the years ended March 31,  \n\n    2026     2025     2024  \n\n                   \n\nPayroll and welfare expenses   $ 236,726     $ 273,580     $ 828,341  \n\nProfessional fees     1,055,395       643,053       617,365  \n\nImpairment for property, plant and equipment and construction in process     -       -       422,924  \n\nImpairment for long-term deposit     -       1,006,052       -  \n\nEstimated credit loss provision for doubtful accounts     128,265       263,972       283,234  \n\nResearch and development expenses     178,765       191,393       184,194  \n\nEmployee stock incentive expense     5,305,739       -       -  \n\nOthers     222,560       379,997       299,564  \n\nTotal general and administrative expenses   $ 7,127,450     $ 2,758,047     $ 2,635,622  \n\n \n\nNOTE 17 – INCOME TAXES\n\n \n\n(a) Corporate Income Taxes\n\n \n\nUnder the current laws of the British Virgin Islands (“BVI”), the Company is not subject to tax on its income or capital gains. In addition, upon payments of dividends by the Company to its shareholders, no BVI withholding tax is imposed. The Company’s subsidiaries incorporated in Hong Kong were subject to the Hong Kong profits tax rate at 16.5% for the years ended March 31, 2026, 2025 and 2024. The Company’s subsidiaries and VIE incorporated in China were subject to PRC Enterprise Income Tax (“EIT”) on the taxable income in accordance with the relevant PRC income tax laws. The standard EIT rate for companies operating in the PRC is 25%. Taizhou Suxuantang was qualified as a high-technology company for the period November 30, 2021 through November 30, 2024, which entitled it to a preferential EIT rate of 15% for the fiscal years ended March 31, 2024. The Company’s high and new technology enterprise qualification expired as of November 30, 2024 and was not renewed; accordingly, the applicable statutory EIT rate for Taizhou Suxuantang reverted to the standard 25% for the fiscal year ended March 31, 2025 and 2026.\n\n \n\nFor the years ended March 31, 2026, 2025 and 2024, income tax expenses consisted of the following: \n\n \n\n    For the years ended March 31,  \n\n    2026     2025     2024  \n\n                   \n\nCurrent income tax provision   $          -     $          -     $         -  \n\nDeferred income tax provision     -       -       -  \n\nTotal income tax   $ -     $ -     $ -  \n\n \n\nThe following is a reconciliation of the Company’s total income tax expense to the amount computed by applying the applicable PRC statutory income tax rates to its income from operations before income taxes for the years ended March 31, 2026, 2025 and 2024.The applicable PRC statutory tax rate was 15% for the fiscal years ended March 31, 2024, and 25% for the fiscal year ended March 31, 2025 and 2026.\n\n \n\n    For the years ended March 31,  \n\n    2026     2025     2024  \n\n                   \n\nLoss before income taxes   $ (6,205,085 )   $ (3,303,652 )   $ (3,098,532 )\n\nIncome tax expense at the PRC statutory rate     (1,551,271 )     (495,548 )     (404,481 )\n\nNon-deductible expenses     20,762       239,939       54,477  \n\nDeductible research and development expenses     (44,691 )     (46,707 )     (27,629 )\n\nDeferred tax provision     (273,385 )     (1,441,907 )     (1,250,105 )\n\nValuation allowance for deferred tax assets     273,385     1,441,907       1,250,105  \n\nEffect of income tax rate differences in jurisdictions other than the PRC     1,575,200       302,316       377,633  \n\nTotal income tax expenses   $ -     $ -     $ -  \n\n \n\nF-34\n\n \n\n \n\nNOTE 17 – INCOME TAXES (CONTINUED)\n\n \n\n(b) Deferred Tax Assets\n\n \n\nDeferred income tax was measured using the enacted income tax rates for the periods in which they are expected to be reversed. Significant components of the Company’s deferred income tax assets and liabilities consist of follows:\n\n \n\n    As of March 31,  \n\n    2026     2025  \n\n             \n\nTax loss carry forward   $ 1,077,219     $ 901,032  \n\nAllowance for expected credit loss - accounts receivable     485,159       312,366  \n\nAllowance for expected credit loss – other receivable and other current assets     13,608       69,979  \n\nAllowance for inventories write-down     34,886       8,462  \n\nImpairment provision for Leasehold improvement and property, plant and equipment     104,420       150,068  \n\nValuation allowance for deferred tax assets     (1,715,292 )     (1,441,907 )\n\nTotal   $ -     $ -  \n\n \n\nThe Company evaluates the level of authority for each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. For the years ended March 31, 2026, 2025 and 2024 the Company had no unrecognized tax benefits. The Company does not anticipate any significant increase to its asset for unrecognized tax benefit within the next 12 months. The Company will classify interest and penalties related to income tax matters, if any, in income tax expense.\n\n \n\nNOTE 18 – RELATED PARTY TRANSACTIONS\n\n \n\n*Nature of relationships with related parties*\n\n \n\nName of related parties   Relationship with the Company\n\n     \n\nFeng Zhou   Major shareholder of the Company, Chief Executive Officer\n\nJun Zheng   Director of the Company\n\nXiaodong Ji   Independent Director of the Company\n\nTaizhou Jiutian Pharmaceutical Co. Ltd.   An entity controlled by Jianping Zhou\n\nJiangsu Health Pharmaceutical Investment Management Co., Ltd\n  An entity controlled by Jianping Zhou\n\nTaizhou Su Xuan Tang Chinese Medicine Clinic   An entity controlled by Jianping Zhou\n\nTaizhou Su Xuan Tang Chinese hospital Co., Ltd.   An entity controlled by Jianping Zhou\n\nJiangsu Sutaitang Online Commercial Co., Ltd.   An entity controlled by Xiaodong Ji\n\n \n\nF-35\n\n \n\n \n\nNOTE 18 – RELATED PARTY TRANSACTIONS (CONTINUED)\n\n \n\n*Related party balances*\n\n \n\nThe amounts due from related parties as of March 31, 2026 and 2025 were as follows: \n\n \n\n    As of March 31,  \n\n    2026     2025  \n\n             \n\nJiangsu Sutaitang Online Commercial Co., Ltd.   $ -     $ 370,862  \n\nTaizhou Su Xuan Tang Chinese hospital Co., Ltd.     -       41,561  \n\nTaizhou Su Xuan Tang Chinese Medicine Clinic     -       5,140  \n\nJiangsu Health Pharmaceutical Investment Management Co., Ltd     2,073,369       -  \n\nTotal due from related parties   $ 2,073,369     $ 417,563  \n\n \n\nAs of March 31, 2026, the Company had amounts due from related parties of $15,845,588 and amounts due to related parties of $13,772,219. Pursuant to an offsetting agreement with the related parties, these balances are presented on a net basis, resulting in a net amount due from related parties of $2,073,369. These balances are unsecured, interest-free, and repayable on demand. \n\n \n\n*Related party transactions*\n\n \n\n*1) Revenues generated from related parties*\n\n \n\nThe company sells several TCMP products to related companies based on terms and conditions mutually agreed between the relevant parties. These related party transactions were conducted in the ordinary course of business of the Company.\n\n \n\n    For the years ended March 31,  \n\n    2026     2025     2024  \n\n                   \n\nTaizhou Su Xuan Tang Chinese Hospital Co. Ltd.     -       1,621       25,528  \n\nTaizhou Su Xuan Tang Chinese Medicine Clinic     -       1,091       2,232  \n\nTaizhou Jiutian Pharmaceutical Co. Ltd.     41       1,589       -  \n\nTotal revenue generated from related parties   $ 41     $ 4,301     $ 27,760  \n\n \n\n*2) Other related party transactions*\n\n \n\nOn January 1, 2018, the Company entered into a lease agreement with Jiangsu Health Pharmaceutical Investment Co., Ltd. to obtain the right of use for office and warehouse of 3,627 square meters for 10 years for free. The Company recorded right-of-use assets and lease expenses based on the fair value for the lease. For the years ended March 31, 2026, 2025 and 2024, the Company record operating lease expenses were $69,551, $69,343, and $69,819, respectively.\n\n \n\n*Guarantee*\n\n \n\nFor the years ended March 31, 2026 and 2025, Taizhou Suxuantang signed several financial guarantee agreements for its related parties. Details of the financial guarantee agreements, please refer to Note 19.\n\n \n\nF-36\n\n \n\n \n\nNOTE 19 – GUARANTEE\n\n \n\nOn April 12, 2021, Taizhou Suxuantang signed a financial guarantee agreement with Jiangsu Changjiang Commercial Bank for Taizhou Jiutian Pharmaceutical Co. Ltd. in borrowing of $387,796 (equivalent of RMB 2,800,000) for three-year period, which expires on April 11, 2024. On April 23, 2024, Taizhou Suxuantang signed a financial guarantee agreement with Jiangsu Changjiang Commercial Bank for Taizhou Jiutian Pharmaceutical Co. Ltd. in borrowing of $303,168 (equivalent of RMB 2,200,000) for three-year period, which expires on April 22, 2027. Taizhou Suxuantang is obliged to pay on behalf of the related party the principal, interest, penalty and other expenses if Taizhou Jiutian Pharmaceutical Co. Ltd. defaults in payment. The Company did not charge financial guarantee fees over Taizhou Jiutian Pharmaceutical Co. Ltd.\n\n \n\nThe fair value of the financial guarantee provided is assessed to be immaterial to the Company’s financial statements. The Company has not made any payment under the above guarantee agreements for the years ended March 31, 2026 and 2025.\n\n* *\n\nNOTE 20 – COMMITMENTS AND CONTINGENCIES\n\n \n\nIn the ordinary course of business, the Company is involved in various legal proceedings, claims and other disputes arising from commercial operations, employees, and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. Although the Company can give no assurances about the resolution of pending claims, litigation or other disputes and the effect such outcomes may have on the Company, the Company believes that any ultimate liability resulting from the outcome of such proceedings to the extent not otherwise provided or covered by insurance, will not have a material adverse effect on our consolidated financial position or results of operations or liquidity. As of March 31, 2026 and 2025, and through the issuance date of these consolidated financial statements, the Company had no pending legal proceedings.\n\n \n\nOn March 22, 2026, the Company entered into a contract with Beijing Mingda Technology Co., Ltd. for the acquisition of software copyrights, with a total contractual consideration of $2,174,543(equal to RMB 15,000,000). As of March 31, 2026, the Company had made partial advance payments recorded within “Advance to suppliers” on the consolidated balance sheet, and the remaining unpaid contractual capital commitment amounted to $869,817 (equal to RMB 6,000,000). The outstanding balance shall be settled via scheduled installment payments over subsequent fiscal years.\n\n \n\nNOTE 21 – SUBSEQUENT EVENTS\n\n \n\nOn April 7, 2026, the Company entered into a securities purchase agreement (the “April 2026 Securities Purchase Agreement”) with certain investors, pursuant to which the Company agreed to sell and issue 2,000,000 Class A Ordinary Shares of the Company. Aggregate gross proceeds to the Company in respect of the offering were approximately $760,000, before deducting other offering expenses payable by the Company.\n\n \n\nOn May 1, 2026, the Company entered into a Securities Purchase Agreement (the “May 2026 Securities Purchase Agreement”) with several “non-U.S. Persons” (as defined in Regulation S of the Securities Act of 1933, as amended) for a private placement of (i) 3,500,000 A Ordinary Shares and (ii) 3,500,000 warrants (the “Warrants”, the Class A Ordinary Shares underlying such Warrants, the “Warrant Shares”), with 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 $3.5 million.\n\n \n\nOn June 1, 2026, China SXT Pharmaceuticals, Inc. (the “Company”) entered into a certain sales agreement (the “Sales Agreement”) with Univest Securities, LLC (the “Sales Agent”) to issue and sell the Company’s Class A ordinary shares, with no par value per share (the “Class A Ordinary Shares”), in an aggregate offering amount of up to $100,000,000 through an at-the-market offering, under which the Sales Agent will act as sales agent and/or principal.\n\n \n\nThe Company evaluated all events and transactions that occurred after March 31, 2026 up through the date the Company issued these financial statements on July 1, 2026 and concluded that no other material subsequent events except for the disclosed above.\n\n \n\nNOTE 22 — CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY\n\n \n\nRules 12-04(a) and 4-08(e)(3) of Regulation S-X require condensed financial information as to the financial position, cash flows and results of operations of a parent company as of and for the same periods for which the audited consolidated financial statements have been presented when the restricted net assets of the consolidated and unconsolidated subsidiaries together exceed 25% of consolidated net assets as of the end of the most recently completed fiscal year.\n\n \n\nThe Company performed a test on the restricted net assets of the consolidated subsidiaries in accordance with Securities and Exchange Commission Regulation S-X Rule 4-08 (e) (3), “General Notes to Financial Statements” and concluded that it was applicable for the Company to disclose the financial information for the parent company only.\n\n \n\nF-37\n\n \n\n \n\nNOTE 22 — CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (CONTINUED)\n\n The subsidiaries did not pay any dividends to the Company for the periods presented. Certain information and footnote disclosures generally included in the financial statements prepared in accordance with U.S. GAAP have been condensed and omitted. These statements should be read in conjunction with the notes to the consolidated financial statements of the Company.\n\n \n\nThe financial information of the parent company has been prepared using the same accounting policies as set out in the Company’s consolidated financial statements except that the parent company used the equity method to account for investments in its subsidiaries.\n\n \n\nThe following represents condensed financial information of the parent company:\n\n \n\nCHINA SXT PHARMACEUTICALS, INC. AND SUBSIDIARIES\nPARENT COMPANY CONDENSED BALANCE SHEETS\n\n \n\n    As of March 31,  \n\n    2026     2025  \n\nASSETS            \n\nCash and cash equivalents     10,536,882       231,028  \n\nAdvance to suppliers     270,000       -  \n\nInvestments in subsidiaries and consolidated VIE     19,532,886       15,569,167  \n\nTotal Assets   $ 30,339,768     $ 15,800,195  \n\n                 \n\nLIABILITIES AND SHAREHOLDERS’ EQUITY                \n\nLIABILITIES                \n\nAccrued expenses and other liabilities     632,346       360,433  \n\nTotal liabilities     632,346       360,433  \n\nShareholders’ Equity:                \n\nOrdinary shares, unlimited shares authorized, no par value, 958,077 class A ordinary shares issued and outstanding 4 class B ordinary shares issued as of March 31, 2026 (91,756 shares issued and outstanding as of March 31, 2025)*   $ 64,125,702     $ 44,530,601  \n\nAccumulated deficits     (34,220,402 )     (28,015,317 )\n\nAccumulated other comprehensive loss     (197,878 )     (1,075,522 )\n\n                 \n\nTotal shareholders’ equity     29,707,422       15,439,762  \n\nTotal liabilities and shareholders’ equity   $ 30,339,768     $ 15,800,195  \n\n \n\n* Retrospectively restated for effect of reverse stock splits on October 5, 2023 and February 25, 2025,and for the Share Consolidation on February 3, 2026.\n\n \n\nCHINA SXT PHARMACEUTICALS, INC. AND SUBSIDIARIES\nPARENT COMPANY STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME\n\n \n\n    For the years ended March 31,  \n\n    2026     2025     2024  \n\n    US$     US$     US$  \n\nShare of  income (loss) of subsidiaries   $ 85,013     $ (2,114,250 )     (2,462,054 )\n\nGeneral and administrative expenses     (6,279,660 )     (579,713 )     (610,178 )\n\nOther loss     (10,438 )     (609,689 )     (26,300 )\n\nNet loss     (6,205,085 )     (3,303,652 )     (3,098,532 )\n\n \n\nCHINA SXT PHARMACEUTICALS, INC. AND SUBSIDIARIES\nPARENT COMPANY STATEMENTS OF CASH FLOWS\n\n \n\n    For the years ended March 31,  \n\n    2026     2025     2024  \n\n    US$     US$     US$  \n\nNet cash used in (provided by) operating activities   $ (3,983,508 )   $ (4,221,950 )   $ 1,131,357  \n\nNet cash provided by (used in) financing activities   $ 14,289,362     $ 3,965,987     $ (647,900 )\n\nNet increase (decreased) in cash   $ 10,305,854     $ (255,963 )   $ 483,457  \n\nCash at the beginning of the year   $ 231,028     $ 486,991     $ 3,534  \n\nCash at the end of the year   $ 10,536,882     $ 231,028     $ 486,991  \n\n \n\nF-38"}