6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of April 2020

Commission File Number: 333-231839

CHINA SXT PHARMACEUTICALS, INC.

(Translation of registrant’s name into English)

178 Taidong Rd North, Taizhou

Jiangsu, China

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒     Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENT

This Current Report contains forward-looking statements. All statements contained in this Current Report other than statements of historical fact are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “seek” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, but not limited to, the following: the effects of the COVID-19 outbreak, including its impact on the demand for our products; the duration of the COVID-19 outbreak and severity of such outbreak in regions where we operate; the pace of recovery following the COVID-19 outbreak; our ability to implement cost containment and business recovery strategies; the adverse effects of the COVID-19 outbreak on our business or the market price of our ordinary shares, the Company's goals and strategies; the Company's future business development; product and service demand and acceptance; changes in technology; economic conditions; reputation and brand; the impact of competition and pricing; government regulations; fluctuations in general economic and business conditions in China and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the Securities and Exchange Commission. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Current Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, we undertake no duty to update any of these forward-looking statements after the date of this Current Report or to conform these statements to actual results or revised expectations.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Operating Metrics for the period from April 1, 2019 to September 30, 2019.

The following table presents the selected condensed consolidated financial information of our company. The selected condensed consolidated statements of operations data for the six months period ended September 30, 2019, 2018 and the selected condensed consolidated balance sheets data as of September 30, 2019, and March 31, 2019 have been derived from our unaudited condensed consolidated interim financial statements, which are included in this interim report. Our unaudited condensed consolidated interim financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. Our historical results do not necessarily indicate results expected for any future period.

1

● Revenues declined by $0.70 million, or 17.9%, for the six months ended September 30, 2019 to $3.22 million from $3.92 million for the same period of the prior fiscal year. Revenues decline were attributable to Advanced TCMP product types demand adjustment made by some customers but were partially offset by the engagement of new Fine TCMP customers and 4 solid beverage products as part of the Company’s TCM Homologous Supplements (“TCMHS”) products that were developed and commercially launched in April 2019. Decline in revenue was primarily due to procurement adjustment of existing customers such as hospitals.

● GAAP gross profit decreased by 31.3% to $1.84 million for the six months ended September 30, 2019 from $2.68 million for the same period of the prior fiscal year. Gross margin declined by 11.2 percentage points to 57.2% for the six months ended September 30, 2019 from 68.4% for the same period of the prior fiscal year mainly due to packaging requirement changes that drove up Regular TCMP cost of revenues. Gross profit decline was resulted from revenue decline, change of packaging requirements, and product types combination, i.e. smaller or bigger packaging, that led to increase in production cost and cost of revenues.

● GAAP operating loss was $0.22 million for the six months ended September 30, 2019 compared to GAAP operating income of $1.33 million for the same period of the prior fiscal year as a result of revenues decline and increased packaging cost.

● Non-GAAP operating loss was $0.09 million for the six months ended September 30 after adjusted for depreciation and amortization, 2019 compared to non-GAAP operating income of $1.43 million for the same period of the prior fiscal year.

● GAAP net loss was $2.35 million, or ($0.10) per share, for the six months ended September 30, 2019, compared to net income of $1.00 million, or $0.05 per share, for the same period of the prior fiscal year owing to $1.67million of Convertible Notes interest and expenses, $0.22 million of Investor Relations and US legal fees that were not in the same period of prior fiscal year.

● Non-GAAP net loss was $0.67 million, or ($0.03) per share after adjusted for depreciation, intangibles amortization, accretion of convertible notes finance cost and convertible notes interest for the six months ended September 30, 2019, compared to net income of $1.0 million, or $0.05 per share, for the same period of the prior fiscal year.

● Adjusted EBITDA loss was $1.66 million for the six months ended September 30, 2019, compared to adjusted EBITDA of $1.43 million for the same period of the prior fiscal year.

2

Selected Financial Data

The following information is derived from our Unaudited Financial Results for the Six Months Ended September 30, 2019 and 2018, attached hereto as Exhibit 99.1.

Results of Operations for the Six Months Period Ended September 30, 2019 Compared to the Six Months Period Ended September 30, 2018

For the Six Months Ended September 30
	2019			2018
	(Unaudited)			(Unaudited)			Amount			%
Revenues	$	3,215,147		$	3,917,707		$	(702,560	)		(17.9	)
Cost of revenue		(1,375,762	)		(1,239,023	)		(136,739	)		11.0
Gross Profit		1,839,385			2,678,684			(839,299	)		(31.3	)
		57.2	%		68.4	%					(11.2	)
Operating expenses
Selling expenses		(774,253	)		(838,217	)		63,964			(7.6	)
General and administrative expenses		(1,285,885	)		(513,532	)		(772,353	)		150.4
Total operating expenses		(2,060,138	)		(1,351,749	)		(708,389	)		52.4
(Loss) / Income from operations		(220,753	)		1,326,935			(1,547,688	)		(116.6	)
		-6.9	%		33.9	%					(40.7	)
Other income, net
Interest expense, net		(2,170,561	)		1,501			(2,172,062	)		(144,707.7	)
Other income, net		38,079			(984	)		39,063			(3,969.8	)
Total other expenses, net		(2,132,482	)		517			(2,132,999	)		(412,572.3	)
(Loss) / Income before income taxes		(2,353,235	)		1,327,452			(3,680,687	)		(277.3	)
Income tax expense		5,166			(332,406	)		337,572			(101.6	)
Net (Loss) /Income	$	(2,348,069	)	$	995,046		$	(3,343,115	)		(336.0	)

3

We generated revenues primarily from manufacture and sales of three types of traditional Chinese medicine pieces (the “TCMP”) products: Advanced TCMP, Fine TCMP, Regular TCMP, and TCM Homologous Supplements (“TCMHS”) products. TCMHS is a classification of health-supporting food used traditionally in China as TCM but which are also consumed as food, which recently has been developed and commercialized.

The following table sets forth the breakdown of revenues by revenue source for each period presented:

	For the Six Months Ended September 30,
(In US$, except percentages)	2019			2018				% Change
Revenues	$	3,215,147		$	3,917,707				-17.9	%
- Advanced TCMP	$	1,100,405		$	2,124,588				-48.2	%
- Fine TCMP	$	656,397		$	175,146				274.8	%
- Regular TCMP	$	1,297,974		$	1,617,973				-19.8	%
- TCMHS Solid Beverages	$	160,371		$	-				100.0	%
Gross profit	$	1,839,385		$	2,678,684				-31.3	%
Gross margin		57.2	%		68.4	%	-11.2		percentage points
Operating (loss) / income	$	(220,753	)	$	1,326,935				-116.6	%
Operating margin		(6.9	)%		33.9	%	-40.7		percentage points
Net (loss) / income	$	(2,348,069	)	$	995,046				-336.0	%
Net margin		(73.0	)%		25.40	%	-98.4		percentage points
(Loss) / Earnings per share	$	(0.10	)	$	0.05				-307.7	%

CHINA SXT PHARMACEUTICALS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP NET (LOSS) / INCOME TO ADJUSTED EBITDA

 (In US$, except percentages)

(Unaudited)

	For the six months ended September 30,
	2019			2018
GAAP net (loss) / income	$	(2,348,069	)	$	995,046
Non-GAAP adjustments:
Depreciation and amortization		133,540			99,413
Interest expense		604,476			(4,010	)
Interest (income) and other		(4,990	)		2,509
Other income / (expenses)		(38,079	)		984
Provision for income taxes		(5,166	)		332,406
Adjusted EBITDA	$	(1,658,288	)	$	1,426,348
Adjusted EBITDA as % of revenue		-51.6	%		36.4	%

RECONCILIATION OF GAAP OPERATING (LOSS) / INCOME TO NON-GAAP OPERATING (LOSS) / INCOME

(In US$)

(Unaudited)

	For the six months ended September 30,
	2019			2018
GAAP operating (loss) / income	$	(220,753	)	$	1,326,935
Non-GAAP adjustments:
Depreciation and amortization		133,540			99,413
Non-GAAP operating (loss) / income	$	(87,213	)	$	1,426,348

4

CHINA SXT PHARMACEUTICALS, INC. AND SUBSIDIARIES 

RECONCILIATION OF GAAP NET (LOSS) / INCOME TO NON-GAAP NET (LOSS) / INCOME

(In US$, except per share data)

(Unaudited)

	For the six months ended September 30,
	2019			2018
GAAP net (loss) / income	$	(2,348,069	)	$	995,046
Non-GAAP adjustments:
Intangibles amortization		4,111			3,547
Amortization of convertible notes interest		1,672,708			—
Non-GAAP net (loss) / income	$	(671,250	)	$	998,593
GAAP net (loss) / income per share:
Basic	$	(0.10	)	$	0.05
Diluted	$	(0.10	)	$	0.05
Non-GAAP net (loss) / income per share:
Basic	$	(0.03	)	$	0.05
Diluted	$	(0.03	)	$	0.05
Shares used in computing GAAP net income (loss) per share:
Basic		22,725,512			20,000,000
Diluted		22,725,512			20,000,000
Shares used in computing non-GAAP net income per share:
Basic		22,725,512			20,000,000
Diluted		22,725,512			20,000,000

CHINA SXT PHARMACEUTICALS, INC. AND SUBSIDIARIES

SUMMARY OF DEPRECIATION, INTANGIBLES AMORTIZATION,

AMORTIZATION OF CONVERTIBLE NOTES INTEREST AND ISSUANCE COST

(In US$)

(Unaudited)

	For the six months ended September 30,
	2019		2018
Depreciation	$	129,429	$	95,866
Intangibles amortization		4,111		3,547
Amortization of convertible notes interest		1,672,708		—
Total	$	1,806,248	$	99,413

Revenues

We generated revenues primarily from manufacture and sales of three types of traditional Chinese medicine pieces (the “TCMP”) products: Advanced TCMP, Fine TCMP and Regular TCMP. For the six months ended September 30, 2019, the total revenues decreased by $0.7 million, or 17.9%, to $3.22 million from $3.92 million for the same period of the prior fiscal year. Decrease in total revenues was primarily due to the decrease in sales of Advanced TCMP products and were partly offset by the increase in the sales of Fine TCMP products and newly launched Homologous Supplements (“TCMHS”), a classification of health-supporting food used traditionally in China as TCM but also consumed as food. As for the TCMHS, the company has developed and commercially launched four solid beverage products in April 2019.

Regular TCMP

We currently manufacture 427 Regular TCMP products listed on China Pharmacopoeia (version 2015) Part I for hospitals and drug stores in treatment of various diseases or serving as dietary supplements. Sales of Regular TCMP products decreased by $0.32 million, or 19.8%, to $1.30 million for the six months ended September 30, 2019 from $1.62 million for the same period of the prior fiscal year. Decrease in sales of Regular TCMP products is consistent with the company’s plan to shift from low margin Regular TCMPs and to focus more on the business of high margin Fine and Advanced TCMPs.

5

Fine TCMP

We currently produce over 20 Fine TCMP products for drug stores and hospitals. Our Fine TCMP products are manufactured manually only from the high-quality authentic ingredients derived from their regions of origin. Sales of Fine TCMP products increased by $0.48 million, or 274.8%, to $0.66 million for the six months ended September 30, 2019 from $0.18 million for the same period of the prior fiscal year. The exponential growth in sales was attributable to engagement of a new major customer.

Advanced TCMP

Advanced TCMP is comprised of 8 Directly Oral TCMP products (the “Directly-Oral-TCMP”) and 9 After-soaking-oral TCMP products (the “After-Soaking-Oral-TCMP”). Both Directly Oral TCMP and After-soaking-oral TCMP are new types of Advanced TCMP. Sales of Advanced TCMP products decreased by $1.02 million, or 48.2%, to $1.10 million for the six months ended September 30, 2019 from $2.12 million for the same period of the prior fiscal year. Decrease in sales of Advanced TCMP products of $1.02 million was due to product types demand adjustment made by some customers and was partially offset by the increased sales of Fine TCMP and newly launched 4 solid beverage products that contributed $0.16 million.

TCMHS Solid Beverages

Four solid beverage products as part of the Company’s TCMHS products were developed and commercially launched in April 2019 and generated $0.16 million revenues in its nascent launch with encouraging growth.

Sales of Advanced TCMP, Fine TCMP, Regular TCMP, and TCMHS products accounted for 34.2%, 20.4%, 40.4%, and 5% of total revenues, respectively, for the six months ended September 30, 2019, compared to 54.2%, 4.5%, 41.3%, and 0% of total revenues, respectively, for the same period of the prior fiscal year.

Gross profit

Cost of revenues primarily include cost of materials, direct labors, overhead, and other related incidental expenses that are directly attributable to the Company’s principal operations. Total cost of goods sold increased by $0.14 million, or 11%, to $1.38 million for the six months ended September 30, 2019 from $1.24 million for the same period of the prior fiscal year. Increase in cost of revenues was driven by change of packaging requirements and product types combination that led to increase in production cost.

Gross profit decreased by $0.84 million, or 31.3%, to $1.84 million for the six months ended September 30, 2019 from $2.68 million for the same period of the prior fiscal year. Gross margin was 57.2% for the six months ended September 30, 2019, compared to 68.4% for the same period of the prior fiscal year.

Operating income

Selling expenses primarily consisted of transportation, sales staff payroll, welfare expenses, travelling expenses, advertisement and promotion expenses, and distribution expenses. For the six months ended September 30, 2019, selling expenses decreased by $0.06 million, or 7.6%, to $0.77 million from $0.84 million for the same period of the prior fiscal year. Decrease in selling expenses was primarily due to the combined effect of a decrease in revenues of $0.70 million.

General and administrative expenses primarily consisted of staff payroll and welfare expenses, research and development, entertainment expenses, travelling expenses, depreciation and amortization expenses for administrative purposes, and office supply expenses. For the six months ended September 30, 2019, general and administrative expenses increased by $0.77 million, or 150.4%, to $1.29 million from $0.51 million for the same period of the prior fiscal year. Increase in general and administrative expenses was related to an increase of $0.09 million in research and development expense, an increase of $0.22 million in legal and investor relations fees, $0.19 million repairs and maintenance expenses.

As a result, total operating expenses increased by $0.71 million, or 52.4%, to $2.06 million for the six months ended September 30, 2019 from $1.35 million for the same period of the prior fiscal year.

Operating income decreased by $1.55 million, or 116.6%, to $0.22 million operating loss for the six months ended September 30, 2019 from $1.33 million operating income for the same period of the prior fiscal year. Operating margin was -6.9% for the six months ended September 30, 2019, compared to 33.9% for the same period of the prior fiscal year. Decrease in operating margin was primarily due to decrease in gross margin, increase in operating expenses after initial public offering, etc.

Finance cost increased by $2.17 million, or 144,707.7%, to $2.17 million interest cost for the six months ended September 30, 2019 from $1,501 interest income for the same period of the prior fiscal year attributable to $1.67 million and $0.47 million of Convertible Notes accretion of finance cost and interest expense.

Income before income taxes

Total net other loss, which includes interest income and expenses, and other non-operating income, was $2.13 million, netting other expenses for the six months ended September 30, 2019, compared to $517 net other income for the same period of the prior fiscal year. This increase was primarily due to $1.67 million of Convertible Notes interest, issuance cost, debt discount, and transaction cost amortization.

6

Income before income taxes decreased by $3.68 million, or 277.3%, to $2.35 million loss before income taxes for the six months ended September 30, 2019 from $1.33 million income before income taxes for the same period of the prior fiscal year. Decrease was primarily due to decrease in gross profit, increase in legal and investor relations fees of $0.22 million after IPO, Convertible Notes accretion of finance cost of $1.67 million and interest expense of $0.47 million.

Provision for income taxes was $5,166 for the six months ended September 30, 2019, compared to $0.33 million for the same period of the prior fiscal year.

Net income and EPS

Net income decreased by $3.34 million, or 336%, to $2.35 million net loss for the six months ended September 30, 2019 from $1 million net income for the same period of the prior fiscal year.

Loss per share was ($0.10) for the six months ended September 30, 2019, compared to earnings per share of $0.05 for the same period of the prior fiscal year.

Liquidity and Financial Resources

As of September 30, 2019, the Company had cash and cash equivalents and restricted cash of $8.32 million, compared to $9.29 million at March 31, 2019. Accounts receivable and inventories were $4.57 million and $0.85 million, respectively, as of September 30, 2019, compared to $4.26 million and $1.01 million, respectively, at March 31, 2019. Total current assets and current liabilities were $17.54 million and $10.76 million, respectively, leading to a current ratio of 1.63 as of September 30, 2019. This compared to total current assets and current liabilities of $15.59 million and $6.32 million, respectively, and current ratio of 2.47 at March 31, 2019.

Net cash used in operating activities was $2.02 million for the six months ended September 30, 2019, compared to $0.47 million for the same period of the prior fiscal year. Increase in net cash used in operating activities was primarily due to increase in prepayments and other receivables.

Increase in net cash used in investing activities was attributable to long-term investment of $3.6 million and loan receivable of $1.5 million.

Increase in net cash provided by financing activities was mainly driven by convertible notes placement.

Relevant PRC statutory laws and regulations permit payments of dividends by the Company’s PRC subsidiary and VIE only from their retained earnings, if any, determined in accordance with PRC GAAP. In addition, the Company’s subsidiary and VIE in China are required to make annual appropriations of 10% of after-tax profit to a general reserve fund or statutory reserve fund until such reserve has reached 50% of its registered capital based on the enterprise’s PRC statutory accounts. Paid in capital of the PRC subsidiary and VIE included in the Company’s condensed consolidated net assets are also non-distributable for dividend purposes. As a result of these PRC laws and regulations, the Company’s PRC subsidiary and VIE are restricted in their abilities to transfer net assets to the Company in the form of dividends, loans or advances. The Company is expected to focus the operation mainly in PRC and is not expected to have significant operations outside the PRC in the foreseeable future, and is not expected to have significant transfer of cash to and/or from the PRC subsidiary and VIE.

According to applicable PRC laws and regulations, a number of conditions must be met before any dividends of a wholly foreign owned enterprise, such as our PRC subsidiary, may be distributed. In accordance with the Implementation Rules of Wholly Foreign-Owned Enterprise Law of the PRC promulgated by the State Council, prior to the payment of any dividend, our PRC subsidiary is required to (i) reserve funds from its profit of current accounting year to make up its losses for the previous accounting years, (ii) pay the income taxes pursuant to applicable tax laws of the PRC and (iii) reserve accumulated funds to improve our PRC subsidiary’s ability to withstand operation risks. Therefore, the PRC regulations could conceivably limit the amount of dividends that can be paid by our PRC subsidiary although our PRC subsidiary has historically not paid any dividends. We believe that such limitation will exist in the future.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

7

Non-GAAP Financial Measures

In addition to disclosing financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this filing and the accompanying tables contain certain non-GAAP financial measures. We calculate adjusted EBITDA by adding back or removing the following items to or from GAAP net income (loss): depreciation and amortization, interest expense, interest (income) and other, and provision for income taxes. We calculate non-GAAP operating income as GAAP operating income excluding depreciation and amortization. We calculate non-GAAP net income as GAAP net income (loss) excluding intangibles amortization, amortization of debt discount and issuance costs, accretion of finance costs on convertible notes, and amortization of interest costs on convertible notes. Non-GAAP financial measures do not have any standardized meaning and are therefore unlikely to be comparable to similarly titled measures presented by other companies. The company considers these non-GAAP financial measures to be important because they provide useful measures of the operating performance of the company, exclusive of factors that do not directly affect what we consider to be our core operating performance, as well as unusual events. The company’s management uses these measures to illustrate underlying trends in the company’s business that could otherwise be masked by the effect of income or expenses that are excluded from non-GAAP measures. In addition, investors often use similar measures to evaluate the operating performance of a company. Non-GAAP financial measures are presented only as supplemental information for purposes of understanding the company’s operating results. The non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP. Please see the reconciliation of non-GAAP financial measures set forth herein and attached to this release.

Recent Development

PIPE Transaction

On April 16, 2019, the company entered into a Securities Purchase Agreement with certain unaffiliated institutional investors relating to a private placement by the company of (1) Senior Convertible Notes (the “Convertible Notes”) in the aggregate principal amount of $15 million, consisting of (i) a Series A Note in the principal amount of $ 10 million , and (ii) a Series B Note in the principal amount of $ 5 million and (2) warrants (the “Warrants”) to purchase such amount of shares of the company’s ordinary shares equal to 50% of the shares issuable upon conversion of the Notes, exercisable for a period of five years at an initial exercise price of $8.38, for consideration consisting of (i) a cash payment of $10,000,000, and (ii) a secured promissory note payable by the Investors to the Company in the principal amount of $5 million. All amounts outstanding under the Notes will mature and will be due and payable on or before October 2, 2020.

Limited Partnership Agreement

In June 2019, Taizhou Suxuantang entered into a limited partnership agreement with Huangshan Panjie Investment Management Co., Ltd. (the “GP”), one of the general partners of Huangshan Panjie Investment LLP Fund (“the Fund”), to join the Fund as a limited partner. The GP will take 20% carried interest. Pursuant to the limited partnership agreement and its supplements, the Taizhou Suxuantang is committed to contribute $7 million (RMB50 million) into the Fund in two installments, with one installment of $3.5 million (RMB 25 million) made on June 14, 2019, and the second installment of $3.5 million (RMB 25 million) to be made no later than October 31, 2019. As of the date of this interim report, the GP provided written assurance that second installment of $3.5 million (RMB 25 million) will not be required and such obligation will be borne by the GP and Fund if the contribution obligation is being called upon.

Receipt of Event of Default Redemption Notices

On July 23 and 29, 2019, the company received from the investors an Event of Default Redemption Notice claimed that the company failed to timely make the instalment payment and elected to effect the redemption of $14,318,462.62 comprising in aggregate the entire principal amount, accrued and unpaid Interest. In addition, demand for the company to purchase the Series A Warrant issued for the Event of Default Black Scholes Value of not less than $1,208,384.07 was made.

8

Entry into Forbearance Agreements, Lock-Up Agreements, Leak-Out Agreements, and the Mutual Releases

Upon negotiation with the Investors, on December 13, 2019, the company entered into certain Forbearance and Amendment Agreements (the “Forbearance Agreement”) with each Investor and agreed to redeem the Series A Notes for an aggregate redemption price of $10,939,410.21 in installments as set forth in the Forbearance Agreement. Concurrently with the execution of the Forbearance Agreements, the Investors and the Company have entered into the Lock-Up Agreements, Leak-Out Agreements and Mutual Releases.

Material Terms of Forbearance Agreements

Upon the execution of the Forbearance Agreements, the Investor shall Net (as defined in the Series B Note) all Restricted Principal (as defined in the Series B Note) outstanding under the Series B Note against the amounts outstanding under the Investor Note (as defined in the Series B Note), after which the Investor Note, the Series B Note and the Series B Warrant shall no longer remain outstanding.

Pursuant to the Forbearance Agreement, commencing on the Effective Date till the earlier of (1) 5:00PM, New York city time on October 15, 2020, (or, if earlier, such date when all the Forbearance Redemption Amounts (as defined therein) are fully paid) and (2) the time of any breach by the Company of any term or provision of this Agreement or the occurrence of any Event of Default that is not an “Existing Default” as set forth in the Schedule I of the Forbearance Agreements or an “Additional Forborne Default” as set forth in the Schedule II of the Forbearance Agreement (such earlier date, the “Forbearance Expiration Date”, such period from the Effective Date to the Forbearance Expiration Date, the “Forbearance Period”), the Investors agreed, among other things, to the following:

(a) to forbear from (i) taking any action to enforce their Redemption Notice with respect to certain existing defaults (the “Existing Defaults”) including but not limited to such defaults as described in the Redemption Notices, and (ii) issuing any new demand for redemption of the Series A Note on the basis of certain additional defaults (the “Additional Forborne Defaults”), including but not limited to the occurrence of the event that the aggregate daily dollar trading volume of the Company’s ordinary shares does not exceed $1,500,000, and that the volume weighted average price of the Company’s ordinary shares on any two trading days during the thirty trading day period ending on the trading day immediately preceding such date of determination fails to exceed $2.14.

(b) not to effect any conversions of the Series A Note or Alternate Conversions except for conversions or Alternate Conversions of the Series A Note and/or exercises of the Series A Warrant, in each case, on any Trading Day where the trading price of the Ordinary Shares is at least $2.50 (as adjusted for share splits, share dividends, share combinations, recapitalizations and similar events on or after the date hereof) (such price, a “Forbearance Conversion Floor” and each such conversion, a “Permitted Transaction”); provided, that any Ordinary Shares issued in a Permitted Transaction (other than Applied Pre-Delivery Shares or any Ordinary Shares issued upon conversion of any Forbearance Redemption Amount that the Company has failed to pay in cash either prior to, or during, the applicable Payment Grace Period (as defined in Schedule II of the Forbearance Agreement) with respect thereto)(collectively, the “Excluded Leak-Out Shares”)) shall be subject to the Leak-Out Agreement. If the Company or its agents do not deliver conversion shares pursuant to such aforementioned conversion, the Investor may apply any remaining Pre-Delivered Shares to satisfy such obligations (on a share-for-share basis, against the Ordinary Shares not timely delivered in such aforementioned conversion);

(c) not to effect any Installment Conversion, Installment Redemption, Disclosure Delay Payments or Event of Default Redemption (as defined in the Notes, solely with respect to the Existing Defaults and Additional Forborne Defaults) prior to the Forbearance Expiration Date other than as permitted under this Agreement

(d) not to exercise the Series A Warrant during the Forbearance Period (other than exercises of the Series A Warrant in Permitted Transactions);

(e) to return the original share certificate representing the Pre-Delivered Shares (other than Applied Pre-Delivery Shares (as defined below)) to the Company for cancellation upon the Company’s payment of the full Forbearance Redemption Amounts (as defined below),

9

(f) to execute and deliver to the Company certain lock-up agreements with respect to the Pre-Delivered Shares (each a “Lock-Up Agreement”, collectively “Lock-Up Agreements”) , certain mutual release (each a “Mutual Release”, collectively, the “Mutual Releases”) and to execute and deliver to the Company the Leak-Out Agreement (as defined below)

In consideration for the above, the Company agreed to the followings:

(a) in lieu of the payment of the redemption price as stated in each Redemption Notices respectively, the Company shall (I) pay to each Investor $500,000 (the “Initial Forbearance Fee”) on or prior to December 16, 2019, and (II) commencing on January 24th 2020, redeem the Series A Notes for an aggregate redemption price of $10,939,410.21  (the “Forbearance Redemption Price”), in accordance with Section 8 of the Series A Note, but replacing the applicable Installment Dates and Installment Amounts (including, Principal Amounts, Interest and Make-Whole Amounts with respect thereto) with the dates (each a “New Installment Date”) and amounts (each, a “New Installment Amount”), respectively and (III) pay the aggregate amount of any payment obligations of the Company arising after the date hereof pursuant to the Sections 3(c)(ii), 20 or 24(c) of the Series A Note, 9(k) of the Securities Purchase Agreement, and/or Sections 2(e), 6 and 7 of the Registration Rights Agreement, (each such amounts, an “Ancillary Redemption Amount”, and together with the New Installment Amounts, each an “Additional Forbearance Redemption Amount”, and together with the Initial Forbearance Fee, each a “Forbearance Redemption Amount”);

(b) If the Company fails to pay any New Installment Amount within 5 days of the applicable New Installment Date pursuant to the Installment Notice (as defined in Section 8 of the Series A Note), the Investor may convert the applicable New Installment Amount in one or multiple conversion notices as an Alternate Conversion pursuant to Section 3(e) of the Series A Note with the Forbearance Conversion Floor and the Leak-Out Agreement being disregarded for such conversions and such conversions deemed a Permitted Transaction for the purposes of this Agreement and any sales of such Ordinary Shares shall not be included in the applicable Daily Limit (as defined in the Leak-Out Agreement) with respect thereto. In the event that the Company or its agents do not deliver applicable Conversion Shares pursuant to any conversion in accordance with Section 3 of the Series A Note, the Investor may apply any remaining Pre-Delivered Shares to satisfy such obligations (on a share-for-share basis, against the Ordinary Shares not timely delivered in such aforementioned conversion) (each an “Applied Pre-Delivery Share”);

(c) In accordance with Section 2(h) of the Series A Warrant, the Company agreed to adjust the exercise price of the Series A Warrant from $8.38 to $2.50 (subject to further adjustment in accordance with the terms of the Series A Warrant); and

(d) the Company shall cause all restrictive legends on the Pre-Delivered Shares to be removed and delivery of un-legended Pre-Delivery Shares into the Investor’s custodian’s account pursuant to the DWAC instructions set forth therein.

Material Terms of Lock-Up Agreements

Pursuant to the Lock-Up Agreement, except that investors may pledge the Pre-Delivered Shares in connection with a bona fide margin account or other loan or financing arrangement secured by the Pre-Delivered Shares, the Investors agreed not to make any hedge, swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Pre-Delivered Shares (excluding the Applied Pre-Delivery Shares, the “Locked Shares”). The investor also agreed to provide, up to three (3) times during the forbearance period, evidence reasonably satisfactory to the Company within two (2) Business Days after receipt of the Company’s written request, showing that the Locked Shares remain in the account of the Investor. In the event that prior to the expiration of the Forbearance Period, the aggregate number of Ordinary Shares held in the brokerage account of such Investor is less than the Locked Shares, the undersigned shall within one (1) Business Day of the Company’s written request, return the Locked Shares to the Company for cancellation by directing the Investors’ broker to initiate a DWAC withdrawal of the Pre-Delivered Shares and delivering duly executed cancellation instructions along with the original certificates (if any) evidencing the Pre-Delivered Shares, original stock power with medallion guaranteed and corporate resolution approving such cancellation to the Company’s transfer agent.

10

Material terms of Leak-Out Agreements

Pursuant to the Leak-Out Agreements, each Investor (together with certain of its affiliates) has agreed to not sell, dispose or otherwise transfer, directly or indirectly (including, without limitation, any sales, short sales, swaps or any derivative transactions that would be equivalent to any sales or short positions) any Ordinary Shares issued in any Permitted Transaction (collectively, the “Restricted Securities”), on any Trading Day (as defined in Series A Notes) (each date of determination, each a “Measuring Date”), if such sale, together with all prior sales of Restricted Securities by the Investor on such Measuring Date, exceed 20% of the daily composite trading volume of the Ordinary Shares (as reported by Bloomberg, LP for such Measuring Date) (the “Daily Limit”); provided that any other sales of Restricted Shares on such Measuring Date (excluding any sales of Restricted Securities) shall not be included in the Daily Limit calculation above.

Further, this restriction will not apply to sales or transfers of any such shares of Restricted Shares in transactions with any Person (an “Assignee”); provided, that as a condition to any such sale or transfer an authorized signatory of the Company and such Assignee duly execute and deliver a leak-out agreement in the form of this Leak-Out Agreement with respect to such transferred Restricted Securities (or such securities convertible or exercisable into Restricted Securities, as applicable) (an “Assignee Agreement”) and sales of the Investor and all Assignees shall be aggregated for all purposes of this Leak-Out Agreement and all Assignee Agreements.

Material Terms of Mutual Release

In accordance with the Mutual Release, both parties agree not to bring any and all charges, complaints, liabilities, claims and demands of any nature whatsoever solely with respect to the Notes and the Warrants against each other effective upon the full payment of the forbearance redemption amounts.

Entry into Amended Leak-Out Agreements

Upon the execution the Due to the Company’s failure to obtain timely approval from State Administration of Foreign Exchange in People’s Republic of China to redeem Series A Notes in cash as previously contemplated, the Company separately amended and restated the Leak-Out Agreements (each an “Amended Leak-Out Agreement”) with each Investor on March 3, 2020 (“Effective Date”).

Material Terms of the Amended Leak-Out Agreements

Pursuant to the Amended Leak-Out Agreements, each Investor (together with certain of its affiliates) has agreed to not sell, dispose or otherwise transfer, directly or indirectly (including, without limitation, any sales, short sales, swaps or any derivative transactions that would be equivalent to any sales or short positions) any Series A Conversion Shares converted during the period commencing on the Effective Date and ending on the later of (x) the date the Series A Note issued to the Investor no longer remains outstanding and (y) such date as the Investor (and/or its Affiliates) shall have sold all Series A Conversion Shares, (collectively, the “Restricted Securities”), on any Trading Day (as defined in Series A Notes) (each date of determination, each a “Measuring Date”), if such sale, together with all prior sales of Restricted Securities by the Investor on such Measuring Date, exceed 20% of the daily composite trading volume of the Ordinary Shares (as reported by Bloomberg, LP for such Measuring Date) (the “Daily Limit”); provided that the sales of any other shares of Ordinary Shares (excluding any sales of Restricted Securities) on such applicable Measuring Date shall not be included in the Daily Limit calculation above.

In addition, if the Investor on a given date desires to convert the Series A Note, in whole or in part, and the aggregate of the Conversion Amount of all conversions from December 13, 2019 through, and including, such date of determination (including the Conversion Amount of the proposed conversion) exceeds the sum of (x) the aggregate New Installment Amounts (as set forth in the Forbearance Agreement) and (y) any other unpaid amounts under the Forbearance Agreement (including, without limitation, the Initial Forbearance Fee), in the aggregate, that have become due and payable (or would have become due and payable, assuming the Forbearance Agreement remained in full force and effect through, and including, such date of determination) in accordance with the Forbearance Agreement on or prior to such date of determination, the Investor shall be prohibited from effecting such conversion (the “Conversion Limit”).

11

Notwithstanding the foregoing Conversion Limit, as of any time of determination, if both (x) the daily average composite trading volume of the Ordinary Share (as reported by Bloomberg, LP for such Measuring Date) exceeds 1.5 million and (y) the trading price of the Ordinary Share as of such time of determination exceeds the Closing Bid Price (as defined in the Series A Note) of the Ordinary Share as of the Trading Day immediately prior to such Measuring Date, the Investor shall be permitted to convert, in one or more conversions on such Measuring Date, up to an additional aggregate amount (which shall be excluded from the Conversion Limit) not to exceed the lesser of (i) 500,000 shares of Ordinary Share and (ii) 20% of the daily average composite trading volume of the Ordinary Shares.

The Outbreak of COVID-19

In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and other parts of the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern,” and on March 11, 2020, the World Health Organization characterized the outbreak as a “pandemic.”   Governments in affected countries are imposing travel bans, quarantines and other emergency public health measures, which have caused material disruption to businesses globally resulting in an economic slowdown. These measures, though temporary in nature, may continue and increase depending on developments in the COVID-19’s outbreak.

Jiangsu Province, where we conduct a substantial part of our business, was materially impacted by the COVID-19. We have been following the recommendations of local health authorities to minimize exposure risk for our employees, including the temporary closures of our offices and production, and having employees work remotely. Our on-site work was not resumed until mid-March, 2020 upon the approval from the local government. Due to the extended lock-down and self-quarantine policies in China, we have experienced significant business disruption for the past two and a half months. Some of our employees in other provinces are still subject to the lock-down policy implemented by the local governments and could not return to work. Our production was resumed in mid-March, 2020, and was picking up slowly due to the material impacts of COVID-19 on our logistics. 

The  extent to which the COVID-19 continues to impact the Company’s business, sales, and results of operations will depend on future developments, which are highly uncertain and will include emerging information concerning the severity of the coronavirus and the actions taken by governments and private businesses to attempt to contain the coronavirus, but is likely to result in a material impact on our business operations at least for the near term.

Statement Regarding Unaudited Financial Information

The unaudited financial information set forth above is subject to adjustments that may be identified when audit work is performed on the Company’s year-end financial statements, which could result in significant differences from this unaudited financial information.

Exhibit.

Exhibits	Description
99.1	China SXT Pharmaceuticals, Inc. Unaudited Financial Results for the Six Months Ended September 30, 2019 and 2018

12

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CHINA SXT PHARMACEUTICAL, INC.
By:	/s/ Feng Zhou
	Feng Zhou
	Chief Executive Officer

Date: April 22, 2020 

13

EX-99.1

Exhibit 99.1

CHINA SXT PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED)

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

TABLE OF CONTENTS

Condensed Consolidated Interim Financial Statements

Condensed Consolidated Balance Sheets as of September 30, 2019 (UNAUDITED) and March 31, 2019	2
Condensed Consolidated Statements of Operation and Comprehensive Income for the six months ended September 30, 2019 and 2018 (UNAUDITED)	3
Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity for the six months ended September 30, 2019 and 2018 (UNAUDITED)	4
Condensed Consolidated Statements of Cash Flows for the six months ended September 30, 2019 and 2018 (UNAUDITED)	5
Notes to Condensed Consolidated Interim Financial Statements (UNAUDITED)	6

1

CHINA SXT PHARMACEUTICALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In US$, except for number of shares data)

	As of September 30, 2019 (Unaudited)			As of March 31, 2019
ASSETS
Current Assets
Cash and cash equivalents	$	8,247,069		$	9,130,849
Restricted cash		77,158			161,084
Accounts receivable		4,568,123			4,180,559
Notes receivable		-			81,265
Inventories		846,281			1,007,918
Advance to suppliers		280,942			319,088
Loan receivable		1,500,000			-
Prepayments, receivables and other assets		2,022,769			707,337
Total Current Assets		17,542,342			15,588,100
Property, plant and equipment, net		1,759,907			1,158,898
Construction in progress		180,000			649,235
Intangible assets, net		53,386			61,096
Deferred tax assets, net		12,679			13,504
Long-term investment		3,497,629			-
Total Non-Current Assets		5,503,601			1,882,733
Total Assets	$	23,045,943		$	17,470,833
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Bank loan – current portion		43,491			27,817
Convertible note - current portion		4,936,193			-
Notes payable		62,533			233,336
Accounts payable		1,959,426			1,685,419
Refund liabilities		73,533			78,317
Advance from customers		120,575			57,553
Amounts due to related parties		1,834,883			2,483,094
Accrued expenses and other current liabilities		701,876			691,522
Income tax payable		1,031,016			1,064,314
Total Current Liabilities		10,763,526			6,321,372
Bank loan – non-current		55,052			41,706
Convertible note – non-current		818,230			-
Total Non-Current Liabilities		873,282			41,706
Total Liabilities		11,636,808			6,363,078
Commitments and Contingencies		-			-
Shareholders’ Equity
Common stocks (par value $0.001 per share, unlimited shares authorized; 27,224,866 shares issued and 23,224,866 shares outstanding at September 30, 2019; 22,706,701 shares issued and outstanding at March 31, 2019 respectively)		23,224			22,706
Additional paid-in capital		11,407,028			7,950,782
Retained earnings		735,803			3,083,872
Accumulated other comprehensive income		(756,920	)		50,395
Total Shareholders’ Equity		11,409,135			11,107,755
Total Liabilities and Shareholders’ Equity	$	23,045,943		$	17,470,833

2

CHINA SXT PHARMACEUTICALS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATION AND COMPREHENSIVE INCOME

(In US$, except for number of shares data)

	For the six months ended September 30,
	2019			2018
	(Unaudited)			(Unaudited)
Revenues	$	3,215,147		$	3,917,707
Revenues generated from third parties		2,946,344			3,812,564
Revenue generated from related parties		268,803			105,143
Cost of revenue		(1,375,762	)		(1,239,023	)
Gross profit		1,839,385			2,678,684
Operating expenses
Selling expenses		(774,253	)		(838,217	)
General and administrative expenses		(1,285,885	)		(513,532	)
Total operating expenses		(2,060,138	)		(1,351,749	)
(Loss) / Income from operations		(220,753	)		1,326,935
Other expenses, net
Interest (expense) / income, net		(2,170,561	)		1,501
Other income / (loss), net		38,079			(984	)
Total other (expenses) / income, net		(2,132,482	)		517
(Loss) / Income before income taxes		(2,353,235	)		1,327,452
Income tax expense		5,166			(332,406	)
Net (Loss) / Income		(2,348,069	)		995,046
Other comprehensive income
Foreign currency translation adjustment		(807,315	)		321,074
Comprehensive (Loss) / Income	$	(3,155,384	)	$	1,316,120
Weighted average number of common shares
Basic		22,725,512			20,000,000
Diluted		22,725,512			20,000,000
Earnings per share
Basic		(0.10	)		0.05
Diluted		(0.10	)		0.05

3

CHINA SXT PHARMACEUTICALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

(In US$, except for number of shares data)

(Unaudited)

	Common stocks			Additional paid-in capital		Retained earnings			Accumulated other comprehensive income			Total
Balance as of March 31, 2018		20,000,000	20,000		1,463,757		1,544,645			257,373			3,285,775
Net income							995,046						995,046
Foreign currency translation gain										321,074			321,074
Balance as of September 30, 2018 (unaudited)		20,000,000	20,000		1,463,757		2,539,691			578,447			4,601,895
Balance as of March 31, 2019		22,706,701	22,706		7,950,782		3,083,872			50,395			11,107,755
Net loss							(2,348,069	)					(2,348,069	)
Issuance of convertible notes					2,549,392		-			-			2,549,392
Issuance of shares for convertible note principal and interest partial settlement		518,165	518		906,854								907,372
Foreign currency translation loss										(807,315	)		(807,315	)
Balance as of September 30, 2019 (unaudited)		23,224,866	23,224		11,407,028		735,803			(756,920	)		11,409,135

4

CHINA SXT PHARMACEUTICALS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In US$, except for number of shares data)

	For the six months ended September 30,
	2019			2018
	(Unaudited)			(Unaudited)
Cash Flows from Operating Activities:
Net (loss) / income from operations		(2,348,069	)		995,046
Adjustments to reconcile net income to net cash provided by operating activities:
Convertible note - Accretion of financing cost		1,672,708			-
Depreciation of property, plant and equipment		129,429			95,866
Amortization of intangible assets		4,111			3,547
Deferred cost		-			(48,454	)
Deferred income taxes		-			5,882
Changes in operating assets and liabilities:
Accounts receivable		(664,341	)		(1,572,815	)
Inventories		103,404			89,702
Advance to suppliers		22,451			(119,452	)
Prepayments, receivables and other assets		(1,140,076	)		111,914
Accounts payable		389,515			(213,638	)
Advances from customers		68,754			(156,162	)
Accrued expenses and other current liabilities		(145,500	)		(69,016	)
Income tax payable		(33,298	)		384,213
Notes receivable		78,843			191,784
Notes payable		(161,765	)		(166,236	)
Net Cash Used In Operating Activities		(2,023,834	)		(467,819	)
Cash Flows from Investing Activities:
Purchase of property, plant and equipment		(123,543	)		(84,402	)
Construction in progress		(250,178	)		-
Long-term investment		(3,614,146	)		-
Loan receivable		(1,500,000	)		-
Net Cash Used in Investing Activities		(5,487,867	)		(84,402	)
Cash Flows From Financing Activities:
Proceeds from bank loan		49,152			-
Repayment of bank loan		(14,777	)		-
Proceeds from convertible note		10,000,000			-
Payment of debt issuance cost		(1,641,050	)		-
Repayment of convertible note		(869,565	)		-
Received from / (Payment to) related party		(610,204	)		341,478
Net Cash Provided by Financing   Activities		6,913,556			341,478
Effect of Exchange Rate Changes on Cash		(369,561	)		16,370
Net Decrease In Cash		(967,706	)		(194,373	)
Cash, cash equivalents and restricted cash at Beginning of Period		9,291,933			577,979
Cash, cash equivalents and restricted cash at End of Period		8,324,227			383,606
Supplemental Disclosure of Non-Cash Activities
Shares issued for convertible note repayment		907,372			-
Supplemental Cash Flow Information
Cash paid for interest expense		287,810			-
Cash paid for income tax		9,575			50,404

5

Note 1 – Organization and description of business

History and Development of the Company

We were incorporated in the British Virgin Islands on July 4, 2017. Our wholly owned subsidiary China SXT Group Limited (“SXT HK”) was incorporated in Hong Kong on July 21, 2017. China SXT Group Limited in turn holds all the capital stocks of Taizhou Suxuantang Biotechnology Co. Ltd. (“WFOE”), a wholly foreign owned enterprise incorporated in China on October 13, 2017. WFOE controls Jiangsu Suxuantang Pharmaceutical Co., Ltd. (“Taizhou Suxuantang” or the “VIE”) through a series of agreements (the “VIE Agreements”).

Pursuant to PRC laws, each entity formed under PRC law shall have certain business scope approved by the Administration of Industry and Commerce or its local counterpart. As such, WFOE’s business scope is to primarily engage in technology development, provision of technology service, technology consulting; development of computer software and hardware, computer network technology, game software; provision of enterprise management and related consulting service, human resource consulting service and intellectual property consulting service. Since the sole business of WFOE is to provide Taizhou Suxuantang with technical support, consulting services and other management services relating to its day-to-day business operations and management in exchange for a service fee approximately equal to the net income of Taizhou Suxuantang, such business scope is necessary and appropriate under PRC laws.

China SXT Pharmaceutical is a holding company with no business operation other than holding the shares in SXT HK; SXT HK is a pass-through entity with no business operation. WFOE is exclusively engaged in the business of managing the operation of Taizhou Suxuantang. Taizhou Suxuantang principally engaged in offering Advanced, Regular and Fine TCMP products, and 4 solid beverage products, TCM Homologous Supplements (“TCMHS”) products.

Note 2 – Summary of significant accounting policies

(a) Basis of presentation

The accompany unaudited condensed consolidated interim 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”). In the opinion of management, these unaudited condensed consolidated interim financial statements reflect all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly, in all material respects, the Company’s consolidated financial position, results of operations, cash flows and changes in equity for the interim periods presented. These unaudited condensed interim financial statements do not include certain information and footnote disclosures as required by the U.S. GAAP for complete annual financial statements. Therefore, these unaudited condensed consolidated interim financial statements should be read in conjunction with the financial statements and related notes included in the Company’s 20-F for the year ended March 31, 2019.

(b) Basis of consolidation

The condensed consolidated interim 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.

The VIE, Taizhou Suxuantang is controlled by the Company through a series of contractual arrangements. 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. The Company does not have any VIEs that are not consolidated in the financial statements.

(c) Foreign currency translation

Transactions 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.

The 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 as they are the primary currency of the economic environment in which each subsidiary operates.

In 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.

6

(d) Use of estimates

The preparation of condensed consolidated interim 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.

Changes 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 September 30, 2019 and 2018: determinations of the useful lives of long-lived assets, estimates of allowances for doubtful accounts, sales return rate, valuation assumptions in performing asset impairment tests of long-lived assets, valuation assumptions in measuring the value of convertible notes debt component, equity component, and warrants.

(e) Fair values of financial instruments

ASC 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 nonfinancial assets and liabilities from its disclosure requirements. Accordingly, the aggregate fair value amounts do not represent the underlying value of the Company. The carrying values of cash, cash equivalents, restricted cash, accounts receivables, note receivable, advance to suppliers, loan receivable, other current assets, prepaid expenses, bank loan – current portion, accounts payables, note payable, advance from customers, refund liabilities, income tax payable, accrued expenses, other current liabilities, and bank loan – non-current approximate their fair values due to their generally short maturities. There is no transfer between levels during the six months period ended September 30, 2019.

A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value:

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

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.

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

(f) Cash and cash equivalents

Cash and cash equivalents primarily consist of bank deposits with original maturities of three months or less, which are unrestricted as to withdrawal and use.

(g) Restricted cash

Restricted cash is cash held as collateral for transactions and a loan the Company has entered into.

(h) Accounts receivable

Accounts receivable are recorded at the invoiced amount less an allowance for any uncollectible accounts and do not bear interest, which are due on demand. Management reviews the adequacy of the allowance for doubtful accounts on an ongoing basis, using historical collection trends and aging of receivables. Management also periodically evaluates individual customer’s financial condition, credit history, and the current economic conditions to make adjustments in the allowance when it is considered necessary. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

(i) Inventories

Inventories primarily include raw materials and finished goods.

Inventories 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 work in progress.

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(j) Advance to suppliers

Advance 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 prepayments will be utilized to offset the Company’s future payments. These amounts are unsecured, non-interest bearing and generally short-term in nature.

Allowances 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 September 30, 2019, and March 31, 2019, the allowances were nil and nil, respectively.

(k) Loan receivable

Loan receivable is recorded at the agreement amount and interest receivable is being accrued accordingly. Management reviews the adequacy of loan recoverability and provision for loan losses on an ongoing basis based on historical repayment trends, borrower’s financial condition, credit history, and the current economic conditions to make adjustments in the provision when it is considered necessary. Loan receivable balance is charged off against the provision after all means of collection have been exhausted and the potential for recovery is considered remote.

(l) Property, plant and equipment

Property, plant and equipment primarily consists of machinery, electric equipment, office equipment and leasehold improvements, which is stated at cost less accumulated depreciation and amortization less any provision required for impairment in value. Depreciation and amortization are computed using the straight-line method with residual value based on the estimated useful life. The residual value rate and useful life of property, plant and equipment are summarized as follows:

Asset category	Residual value rate	Useful live
Machinery	5%	10 years
Electric equipment	5%	3~5 years
Office equipment	5%	5 years
Vehicles	5%	4 years
Leasehold improvement cost	5%	3~10 years

The Company reviews property, plant and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An asset is considered impaired if its carrying amount exceeds the future net undiscounted cash flows that the asset is expected to generate. If such asset is considered to be impaired, the impairment recognized is the amount by which the carrying amount of the asset, if any, exceeds its fair value determined using a discounted cash flow model. For the six months ended September 30, 2019, and year ended March 31, 2019, there was no impairment of property, plant and equipment.

Costs 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 unaudited condensed consolidated statements of operation and comprehensive income.

(m) Intangible assets

Intangible assets are stated at cost less accumulated amortization. Intangible assets represented the trade mark registered in the PRC and purchased software which are amortized on a straight-line basis over a useful life of ten year.

The 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 six months ended September 30, 2019, and the year ended March 31, 2019, there was no impairment of intangible assets.

(n) Construction in progress

Construction in progress records the cost of construction work, which is not yet completed.

(o) Long-term investment

The Company’s non-marketable equity security is investment in privately held investment management company without readily determinable market values. According to ASC 321-10-35-2, it accounts for non-marketable securities on a prospective basis. Under the new requirement equity investments that do not have readily determinable fair values and do not qualify for the net asset value practical expedient are eligible for the measurement alternative. For the Company’s passive and without significant influence or control equity investment in private company which do not have readily determinable fair values, the Company has elected the measurement alternative defined as cost, less impairment, plus or minus adjustments resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The investment is reviewed periodically to determine if its value has been impaired and adjustments are recorded as necessary in profit or loss for the period. During the six months period ended September 30, 2019, no impairment loss was identified and no loss related to revaluation of its investment in the private company.

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(p) Convertible note, net

The Company accounts for its convertible senior notes in accordance with ASC 470-20 “Debt with Conversion and Other Options”. The Company separately accounts for the liability and equity components of convertible debt Instruments. The liability component at issuance is recognized at fair value, based on the fair value of a similar instrument that does not have a conversion feature. The equity component is based on the excess of the principal amount of the debentures over the fair value of the liability component, after adjusting for an allocation of debt issuance costs, and is recorded as additional paid in capital. Debt discounts are amortized as additional non-cash interest expense over the expected life of the debt using an effective interest rate method. In accounting for the issuance costs related to the Notes, the allocation of issuance costs incurred between the liability and equity components were based on their relative values.

(q) Revenue recognition

In accordance with ASC Topic 606, revenues are recognized when control of the promised goods is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods. In determining when and how much revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; (5) recognize revenue when (or as) the entity satisfies a performance obligation.

Sales of pharmaceutical products represent the invoiced value of goods, net of value-added taxes, sales returns, trade discounts and allowances. Revenue is recognized base on agreed price determined in the contracts with the customers, when the products are delivered and accepted by customers.

(r) Cost of revenue

Cost 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.

(s) Income taxes

Current 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.

The 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 September 30, 2019 and for the six months period ended September 30 2019.

(t) Comprehensive income

Comprehensive income includes net income and foreign currency adjustments. Comprehensive income is reported in the statements of operations and comprehensive income.

Accumulated other comprehensive income, as presented on the balance sheets are the cumulative foreign currency translation adjustments.

(u) Leases

Leases are classified as either capital or operating leases. Leases that transfer substantially all the benefits and risks incidental to the ownership of assets are accounted for as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operating leases wherein rental payments are recognized in the condensed consolidated income statements on a straight-line basis over the lease terms. The Company had no capital leases for the six months ended September 30, 2019, and the year ended March 31, 2019, respectively.

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Note 3 – Accounts receivable, net

Accounts receivable, net consisted of the following:

	September 30,			March 31,
	2019			2019
	(unaudited)
Accounts receivable	$	4,630,953		$	4,247,476
Less:  Allowance for doubtful accounts		(62,830	)		(66,917	)
Total accounts and notes receivable, net	$	4,568,123		$	4,180,559

Note 4 – Inventories, net

As of September 30, 2019, and March 31, 2019, inventories consisted of the following:

	September 30,			March 31,
	2019			2019
	(unaudited)
Raw material	$	341,759		$	315,686
Finished goods		526,223			715,344
Provision for inventory		(21,701	)		(23,112	)
	$	846,281		$	1,007,918

Note 5 – Loan receivable

	September 30,		March 31,
	2019		2019
	(unaudited)
Loan receivable	$	1,500,000	$	-

Short-term loan of $1.5 million at 5.4% annual interest rate was made to RH Holdings Management (HK) Limited from June 1, 2019, to May 31, 2020.

Note 6 – Prepayments, receivables and other assets

As of September 30, 2019, and March 31, 2019, prepayments, receivables and other assets consisted of the following:

	September 30,		March 31,
	2019		2019
	(unaudited)
Staff IOU	$	1,827,152	$	670,619
Others		195,617		36,718
	$	2,022,769	$	707,337

The Staff IOU are short-term borrowings for business travelling purpose which should be paid off by fiscal year end.

Note 7 – Property, plant and equipment, net

Property, plant and equipment consist of the following:

	Useful	September 30,			March 31,
	life	2019			2019
		(unaudited)
Machinery	10 years	$	632,683		$	658,043
Electric equipment	3~5 years		143,084			138,338
Office equipment	5 years		74,097			78,917
Vehicles	4 years		176,335			122,969
Leasehold improvement	3~10 years		1,571,909			906,060
Less: Accumulated depreciation			(838,201	)		(745,429	)
		$	1,759,907		$	1,158,898

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Note 8 – Construction in progress

A construction in progress item is not depreciated until the asset is fully constructed for its intended use. Construction in progress consist of the following:

	As of		As of
	September 30, 2019		March 31, 2019
	(unaudited)
Factory	$	-	$	129,453
Workshop		-		519,782
Retail outlet		180,000		-
	$	180,000	$	649,235

Construction in progress relates to unfinished retail outlet construction at Huangshan City, Anhui Province. Construction in process will be transferred to leasehold improvement when it is finished. The workshop will start to depreciate when assets are ready for the intended use.

Note 9 – Intangibles, net

	Useful	September 30,			March 31,
	life	2019			2019
		(unaudited)
Trademark	10	$	42,580		$	45,350
Software	10		33,452			35,629
Less: accumulated amortization			(22,646	)		(19,883	)
		$	53,386		$	61,096

Note 10 – Long-term investment

	As of		As of
	September 30, 2019		March 31, 2019
	(unaudited)
Long-term investment	$	3,497,629	$	-

In June 2019, Taizhou Suxuantang entered into a limited partnership agreement with Huangshan Panjie Investment Management Co., Ltd. (the “Fund”). The company is committed to contribute $7 million (RMB50 million) into the Fund in two installments, with one installment of $3.5 million (RMB 25 million) made on June 14, 2019, and the second installment of $3.5 million (RMB 25 million) to be made no later than October 31, 2019. Long-term investment balance as of September 30, 2019 represents the carrying value of cash with the investment management company due to cash deposited with the Fund has not been used for equity investment.

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Note 11 – Bank loans

	September 30,		March 31,
	2019		2019
	(unaudited)
Car loan – current portion	$	43,491	$	27,817

	September 30,		March 31,
	2019		2019
	(unaudited)
Car loan – non-current	$	55,052	$	41,706

Original car loan of $69,953 at 12% annual interest rate was made from October 1, 2018 to September 30, 2021. A new car loan of $47,568 at 9.54% annual interest rate was made from July 1, 2019, to June 30, 2022. Both cars were pledged as collateral for loans until full settlement.

Note 12 – Convertible notes

The unaudited net carrying amount of the Notes were as follows:

	Principal outstanding		Unamortized issuance cost			Net carrying value
Short-term
September 30, 2019
Convertible notes	$	7,391,305	$	(2,455,112	)	$	4,936,193
Long-term
September 30, 2019
Convertible notes	$	880,852	$	(62,622	)	$	818,230
Total
September 30, 2019
Convertible notes	$	8,272,157	$	(2,517,734	)	$	5,754,423

The unaudited net carrying amount of the equity component of the Notes were as follows:

	Amount allocated to conversion option		Issuance cost		Equity component, net
September 30, 2019
Convertible notes	$	699,029	$	262,403	$	436,626

Amortization of issuance cost, debt discount and interest cost:

	Issuance costs and debt discount		Convertible note interest		Total
Six months period ended September 30, 2019	$	1,672,708	$	470,823	$	2,143,531

The effective interest rate to derive the liability component fair value is 25.70% for the Convertible Notes. 

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In accounting for the issuance of the Convertible Notes, the Company separated the Convertible Notes into liability and equity components. The carrying amount of the equity component and warrants value representing the conversion option was $2,549,392 (equity component $436,626, warrants value $2,112,766). Equity component was determined by deducting the fair value of the liability component from the par value of the Convertible Notes. Warrants value was determined with the Black Scholes model. Equity component is not remeasured as long as it continues to meet the conditions for equity classification. The excess of the principal amount of the liability component over its carrying amount (“debt discount”) is amortized to interest expense over the term of the Convertible Notes.

Debt issuance costs related to the Convertible Notes comprised of commissions paid to third party placement agent, lawyers, and warrants value of $3,753,816. The Company allocated the total amount incurred to the liability and equity components of the Convertible Notes based on their relative values. Issuance costs attributable to the liability component were $3,491,413 and will be amortized to interest expense using the effective interest method over the contractual term. Issuance costs attributable to the equity component were $262,403 and netted with the equity component in stockholders’ equity of $699,029 and warrant value of $2,112,766.

PIPE Transaction

On April 16, 2019, the company entered into certain securities purchase agreement with certain unaffiliated institutional investors relating to a private placement of (1) Senior Convertible Notes in the aggregate principal amount of $15 million, consisting of (i) a Series A Note in the principal amount of $ 10 million, and (ii) a Series B Note in the principal amount of $ 5 million and (2) warrants to purchase such amount of shares of the company’s ordinary shares equal to 50% of the shares issuable upon conversion of the Notes, exercisable for a period of five years at an exercise price of $8.38, for consideration consisting of (i) a cash payment of $10,000,000, and (ii) a secured promissory note payable by the Investors to the Company in the principal amount of $5 million.

Material Terms of the Convertible Notes:

● The aggregate principal amount of the Series A Notes is $10,000,000 and the Series B Notes is $5,000,000. All of the aggregate principal amount of the Series B Notes will constitute Restricted Principal. If an Investor prepays any amount under such Investor’s Investor Note, an equal amount of the Restricted Principal becomes unrestricted principal under such Investor’s Series B Note. The amount raised by the Company upon closing of the PIPE transaction was $10,000,000 from Series A Notes.

● The expiration date of Notes and warrant shall be October 2, 2020 and May 2, 2023 respectively. The aggregate redemption amount of the Notes shall be redeemed in installments on or before the expiration date.

● The interest rate on the Convertible Notes is eight percent (8%) per annum. In the event of default, the Interest Rate shall be increased to eighteen percent (18%) per annum.

● The initial fixed conversion price will be $8.38 per share, subject to reduction and adjustment for stock splits, stock dividends, and similar events.

● During an Event of Default Redemption Right Period the Investor may convert all, or any part of, the Conversion Amount into Ordinary Shares at the Alternate Conversion Price.

● The Alternate Conversion Price is the lowest of (i) the applicable Conversion Price as in effect on the applicable Conversion Date of the applicable Alternate Conversion, (ii) 80% of the volume-weighted average price (“VWAP”) of the Ordinary Shares as of the Trading Day immediately preceding the delivery or deemed delivery of the applicable Conversion Notice, (iii) 80% of the VWAP of the Ordinary Shares as of the Trading Day of the delivery or deemed delivery of the applicable Conversion Notice and (iv) 80% of the price computed as the quotient of (I) the sum of the VWAP of the Ordinary Shares for each of the three (3) Trading Days with the lowest VWAP of the Ordinary Shares during the fifteen (15) consecutive Trading Day period ending and including the Trading Day immediately preceding the delivery or deemed delivery of the applicable Conversion Notice, divided by (II) three (3) (such period, the “Alternate Conversion Measuring Period”).

● The aggregate number of Series A and Series B warrant shares to be converted on expiration is 596,658 and 298,330 shares respectively.

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Note 13 – Accrued expenses and other liabilities

	September 30,		March 31,
	2019		2019
	(unaudited)
Accrued payroll and welfare	$	175,745	$	36,010
Other payable for leasehold improvements		-		119,535
Accrued professional service expenses		-		187,444
Staff reimbursement		170,246		183,857
Interest payable		183,012		-
Other current liabilities		172,873		164,676
	$	701,876	$	691,522

Note 14 – Shareholders’ equity

Restricted shares

Upon the closing of the PIPE transaction with two unaffiliated institutional investors on May 2, 2019, the Company delivered an aggregate of four million Ordinary Shares to the holder of the Convertible Notes with certain restrictive legends (the “Pre-Delivery Shares”). The Pre-Delivery Shares may not be offered for sale, sold, transferred or assigned (i) in the absence of (a) an effective registration statement for the securities under the securities act of 1933, as amended, or (b) an opinion of counsel to the holder (if requested by the company), in a form reasonably acceptable to the Company, that registration is not required under said act or (ii) unless sold or eligible to be sold pursuant to Rule 144 or rule 144A under said Act. Notwithstanding the foregoing, the securities may be pledged in connection with a bona fide margin account or other loan or financing arrangement secured by the Pre-Delivery Shares.

Any Pre-Delivery Shares issued to the investors (or its designee) that remains outstanding following the repayment in full of all obligations outstanding under the Convertible Notes, shall be returned to the Company for cancellation. As of September 30, 2019, the Convertible Notes were outstanding and Pre-Delivery Shares were not returned for cancellation. Company expects to redeem the Convertible Notes in full in accordance with the terms of Convertible Notes and other agreements that the Company entered or is going to enter into with such investors in connection with the Convertible Notes, and have all the  Pre-Delivery Shares cancelled upon the full redemption.

Ordinary shares issued for convertible notes settlement

During the six months period ended September 30, 2019, 518,165 ordinary shares were issued with a fair value of $907,372 for convertible notes principal and interest partial settlement.

Note 15 – RELATED PARTY TRANSACTIONS AND BALANCES

1) Nature of relationships with related parties

Name	Relationship with the Company
Jianping Zhou	Father of major shareholders of the Company and two of Taizhou Suxuantang shareholders, controlling shareholder of Taizhou Suxuantang from its inception to May 8, 2017
Jianbin Zhou	Father of major shareholders of the Company and one of Taizhou Suxuantang shareholders
Taizhou Jiutian Pharmaceutical Co. Ltd.	An entity controlled by Jianping Zhou
Taizhou Su Xuan Tang Chinese Medicine Co., Ltd.	An entity controlled by Jianping Zhou
Jiangsu Health Pharmaceutical Investment Co., Ltd.	An entity controlled by Jianping Zhou
Taizhou Su Xuan Tang Chinese Medicine Clinic	An entity controlled by Jianping Zhou
Taizhou Su Xuan Tang Chinese hospital Co., Ltd	An entity controlled by Jianping Zhou

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2) Related party balances

As of September 30, 2019 and March 31, 2019, the amount due to related parties was as follows:

	As of		As of
	September 30, 2019		March 31, 2019
	(unaudited)
Jiangsu Health Pharmaceutical Investment Co., Ltd.	$	338,005	$	939,521
Feng Zhou		1,481,755		1,542,828
Jianping Zhou		15,123		-
Jianbin Zhou		-		745
	$	1,834,883	$	2,483,094

The balances due to related parties are unsecured and due on demand.

3) Related party transactions

During the six months period ended September 30, 2019 and 2018 the Company generated revenue of $246,476 and $6,687, respectively, from sales transactions with Taizhou Jiutian Pharmaceutical Co. Ltd.

During the six months period ended September 30, 2019 and 2018, the Company generated revenue of $22,327 and $8,822 respectively, from sales transactions with Taizhou Su Xuan Tang Chinese Medicine Clinic.

During the six months period ended September 30, 2019 and 2018, the Company generated revenue of zero and $109,018 respectively, from sales transactions with Taizhou Su Xuan Tang Chinese Hospital Co. Ltd.

As of September 30, 2019, the outstanding amount that the Company borrowed from Feng Zhou, Jiangsu Health Pharmaceutical Investment Co., Ltd, and Jianping Zhou was $1,834,883. As of March 31, 2019, the outstanding amount that the Company borrowed from Feng Zhou and Jiangsu Health Pharmaceutical Investment Co., Ltd, was $2,483,094. All borrowings are non-interest bearing and repaid on demand. During the six months period ended September 30, 2019, $61,073 was repaid to Feng Zhou, $601,516 was repaid to Jiangsu Health Pharmaceutical Investment Co., Ltd, $745 was repaid to Jianbin Zhou, and $15,123 was borrowed from Jianping Zhou.

Note 16 – Commitments and contingencies

As of the date of this interim report, written assurance has been received that the second installment of $3.5 million (RMB 25 million) to be invested with Huangshan Panjie will not be required and such obligation will be borne by Fund or Fund manager if the contribution obligation is being called upon.

Note 17 – Subsequent event

Entry into Forbearance Agreements in Connection with the Event of Default Redemption Notices

On July 23 and 29, 2019, the company received from the investors an Event of Default Redemption Notice claimed that the company failed to timely make the instalment payment and elected to effect the redemption of $14,318,462.62 comprising in aggregate the entire principal amount, accrued and unpaid Interest. In addition, demand for the company to purchase the Series A Warrant issued for the Event of Default Black Scholes Value of not less than $1,208,384.07 was made.

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On December 13, 2019, after negotiation with the Investors, , the company entered into certain Forbearance and Amendment Agreements with each Investor and agreed to redeem the Series A Notes for an aggregate redemption price of $10,939,410.21 in installments as set forth in the Forbearance Agreement. Concurrently with the execution of the Forbearance Agreement, the Investors and the Company have entered into the Lock-Up Agreements, Leak-Out Agreements and Mutual Releases.

Material Terms of the Agreements

Upon the execution of the Forbearance Agreements, the Investor shall Net all Restricted Principal outstanding under the Series B Note against the amounts outstanding under the Investor Note, after which the Investor Note, the Series B Note and the Series B Warrant shall no longer remain outstanding.

The Investors agreed, among other things, to the following:

(a) to forbear from (i) taking any action to enforce their Redemption Notice with respect to certain existing defaults, and (ii) issuing any new demand for redemption of the Series A Note on the basis of certain additional defaults that the aggregate daily dollar trading volume of the Company’s ordinary shares does not exceed $1,500,000, and that the volume weighted average price of the Company’s ordinary shares on any two trading days during the thirty trading day period immediately preceding such date of determination fails to exceed $2.14.

(b) not to effect any conversions of the Series A Note or Alternate Conversions except for conversions or Alternate Conversions of the Series A Note and/or exercises of the Series A Warrant where the trading price of the Ordinary Shares is at least $2.50;

(c) not to effect any Installment Conversion, Installment Redemption, Disclosure Delay Payments or Event of Default Redemption prior to the Forbearance Expiration Date other than as permitted under this Agreement

(d) not to exercise the Series A Warrant during the Forbearance Period;

(e) to return the original share certificate representing the Pre-Delivered Shares to the Company for cancellation upon the Company’s payment of the full Forbearance Redemption Amounts;

(f) to execute and deliver to the Company certain lock-up agreements with respect to the Pre-Delivered Shares, certain mutual release and to execute and deliver to the Company the Leak-Out Agreement;

In consideration for the above, the Company agreed to the followings:

(a) the Company shall (I) pay to each Investor $500,000 on or prior to December 16, 2019, and (II) commencing on January 24th 2020, redeem the Series A Notes for an aggregate redemption price of $10,939,410.21;

(b) If the Company fails to pay any New Installment Amount within 5 days of the applicable New Installment Date, the Investor may convert the applicable New Installment Amount as an Alternate Conversion and the Leak-Out Agreement being disregarded for such conversions;

(c) the Company agreed to adjust the exercise price of the Series A Warrant from $8.38 to $2.50; and

(d) the Company shall cause all restrictive legends on the Pre-Delivered Shares to be removed and delivery of un-legended Pre-Delivery Shares into the Investor’s custodian’s account pursuant to the DWAC instructions set forth therein.

(e) The Investors agreed not to make any hedge, swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Pre-Delivered Shares.

(f) Each Investor has agreed to not sell, dispose or otherwise transfer, directly or any Ordinary Shares issued if such sale exceed 20% of the daily composite trading volume of the Ordinary Shares.

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Due to the Company’s failure to obtain timely approval from State Administration of Foreign Exchange in People’s Republic of China to redeem Series A Notes in cash as previously contemplated, each Investor entered into certain amended and restated leak-out agreement with the Company on March 3, 2020.

Each Investor has agreed to not sell, dispose or otherwise transfer, directly or indirectly any Series A Conversion Shares converted on any Trading Day, if such sale exceed 20% of the daily composite trading volume of the Ordinary.

If both the daily average composite trading volume of the Ordinary Share exceeds 1.5 million and the trading price of the Ordinary Share as of such time of determination exceeds the Closing Bid Price of the prior Trading Day, the Investor shall be permitted to convert up to an additional aggregate amount not to exceed the lesser of (i) 500,000 shares of Ordinary Share and (ii) 20% of the daily average composite trading volume of the Ordinary Shares.

The Outbreak of COVID-19

In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and other parts of the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern,” and on March 11, 2020, the World Health Organization characterized the outbreak as a “pandemic.” Governments in affected countries are imposing travel bans, quarantines and other emergency public health measures, which have caused material disruption to businesses globally resulting in an economic slowdown. These measures, though temporary in nature, may continue and increase depending on developments in the COVID-19’s outbreak. Jiangsu Province, where we conduct a substantial part of our business, was materially impacted by the COVID-19. We have been following the recommendations of local health authorities to minimize exposure risk for our employees, including the temporary closures of our offices and production, and having employees work remotely. Our on-site work was not resumed until mid-March, 2020 upon the approval from the local government. Due to the extended lock-down and self-quarantine policies in China, we have experienced significant business disruption for the past two and a half months. Some of our employees in other provinces are still subject to the lock-down policy implemented by the local governments and could not return to work. Our production was resumed in mid-March, 2020, and was picking up slowly due to the material impacts of COVID-19 on our logistics. 

The extent to which the COVID-19 continues to impact the Company’s business, sales, and results of operations will depend on future developments, which are highly uncertain and will include emerging information concerning the severity of the coronavirus and the actions taken by governments and private businesses to attempt to contain the coronavirus, but is likely to result in a material impact on our business operations at least for the near term.

17

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Schedule of useful life of property, plant and equipment

Asset category	Residual value rate	Useful live
Machinery	5%	10 years
Electric equipment	5%	3~5 years
Office equipment	5%	5 years
Vehicles	5%	4 years
Leasehold improvement cost	5%	3~10 years

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Organization and Description of Business

6 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and description of business

Note 1 – Organization and description of business

History and Development of the Company

We were incorporated in the British Virgin Islands on July 4, 2017. Our wholly owned subsidiary China SXT Group Limited ("SXT HK") was incorporated in Hong Kong on July 21, 2017. China SXT Group Limited in turn holds all the capital stocks of Taizhou Suxuantang Biotechnology Co. Ltd. ("WFOE"), a wholly foreign owned enterprise incorporated in China on October 13, 2017. WFOE controls Jiangsu Suxuantang Pharmaceutical Co., Ltd. ("Taizhou Suxuantang" or the "VIE") through a series of agreements (the "VIE Agreements").

Pursuant to PRC laws, each entity formed under PRC law shall have certain business scope approved by the Administration of Industry and Commerce or its local counterpart. As such, WFOE's business scope is to primarily engage in technology development, provision of technology service, technology consulting; development of computer software and hardware, computer network technology, game software; provision of enterprise management and related consulting service, human resource consulting service and intellectual property consulting service. Since the sole business of WFOE is to provide Taizhou Suxuantang with technical support, consulting services and other management services relating to its day-to-day business operations and management in exchange for a service fee approximately equal to the net income of Taizhou Suxuantang, such business scope is necessary and appropriate under PRC laws.

China SXT Pharmaceutical is a holding company with no business operation other than holding the shares in SXT HK; SXT HK is a pass-through entity with no business operation. WFOE is exclusively engaged in the business of managing the operation of Taizhou Suxuantang. Taizhou Suxuantang principally engaged in offering Advanced, Regular and Fine TCMP products, and 4 solid beverage products, TCM Homologous Supplements ("TCMHS") products.

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Related Party Transactions and Balances

6 Months Ended

Sep. 30, 2019

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS AND BALANCES

Note 15 – RELATED PARTY TRANSACTIONS AND BALANCES

1) Nature of relationships with related parties

Name	Relationship with the Company
Jianping Zhou	Father of major shareholders of the Company and two of Taizhou Suxuantang shareholders, controlling shareholder of Taizhou Suxuantang from its inception to May 8, 2017
Jianbin Zhou	Father of major shareholders of the Company and one of Taizhou Suxuantang shareholders
Taizhou Jiutian Pharmaceutical Co. Ltd.	An entity controlled by Jianping Zhou
Taizhou Su Xuan Tang Chinese Medicine Co., Ltd.	An entity controlled by Jianping Zhou
Jiangsu Health Pharmaceutical Investment Co., Ltd.	An entity controlled by Jianping Zhou
Taizhou Su Xuan Tang Chinese Medicine Clinic	An entity controlled by Jianping Zhou
Taizhou Su Xuan Tang Chinese hospital Co., Ltd	An entity controlled by Jianping Zhou

2) Related party balances

As of September 30, 2019 and March 31, 2019, the amount due to related parties was as follows:

	As of		As of
	September 30, 2019		March 31, 2019
	(unaudited)
Jiangsu Health Pharmaceutical Investment Co., Ltd.	$	338,005	$	939,521
Feng Zhou		1,481,755		1,542,828
Jianping Zhou		15,123		-
Jianbin Zhou		-		745
	$	1,834,883	$	2,483,094

The balances due to related parties are unsecured and due on demand.

3) Related party transactions

During the six months period ended September 30, 2019 and 2018 the Company generated revenue of $246,476 and $6,687, respectively, from sales transactions with Taizhou Jiutian Pharmaceutical Co. Ltd.

During the six months period ended September 30, 2019 and 2018, the Company generated revenue of $22,327 and $8,822 respectively, from sales transactions with Taizhou Su Xuan Tang Chinese Medicine Clinic.

During the six months period ended September 30, 2019 and 2018, the Company generated revenue of zero and $109,018 respectively, from sales transactions with Taizhou Su Xuan Tang Chinese Hospital Co. Ltd.

As of September 30, 2019, the outstanding amount that the Company borrowed from Feng Zhou, Jiangsu Health Pharmaceutical Investment Co., Ltd, and Jianping Zhou was $1,834,883. As of March 31, 2019, the outstanding amount that the Company borrowed from Feng Zhou and Jiangsu Health Pharmaceutical Investment Co., Ltd, was $2,483,094. All borrowings are non-interest bearing and repaid on demand. During the six months period ended September 30, 2019, $61,073 was repaid to Feng Zhou, $601,516 was repaid to Jiangsu Health Pharmaceutical Investment Co., Ltd, $745 was repaid to Jianbin Zhou, and $15,123 was borrowed from Jianping Zhou.

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Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	6 Months Ended	12 Months Ended
	Sep. 30, 2019	Mar. 31, 2019
Statement of Financial Position [Abstract]
Common stocks, par value	$ 0.001	$ 0.001
Common stock, shares authorized	Unlimited	Unlimited
Common stock, shares issued	27,224,866	22,706,701
Common stock, shares outstanding	23,224,866	22,706,701

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Prepayments, Receivables and Other Assets (Tables)

6 Months Ended

Sep. 30, 2019

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of prepayments, receivables and other assets

	September 30,		March 31,
	2019		2019
	(unaudited)
Staff IOU	$	1,827,152	$	670,619
Others		195,617		36,718
	$	2,022,769	$	707,337

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Long-Term Investment (Details Textual) - Taizhou Suxuantang [Member]			1 Months Ended
	Jun. 14, 2019 USD ($)	Jun. 14, 2019 CNY (¥)	Oct. 31, 2019 USD ($)	Oct. 31, 2019 CNY (¥)	Jun. 30, 2019 USD ($)	Jun. 30, 2019 CNY (¥)
Long-Term Investment (Textual)
Captial contribution | $					$ 7,000,000
Installment One [Membe]
Long-Term Investment (Textual)
Captial contribution | $	$ 3,500,000
Installment Two [Membe]
Long-Term Investment (Textual)
Captial contribution | $			$ 3,500,000
RMB [Member]
Long-Term Investment (Textual)
Captial contribution | ¥						¥ 50,000,000
RMB [Member] | Installment One [Membe]
Long-Term Investment (Textual)
Captial contribution | ¥		¥ 25,000,000
RMB [Member] | Installment Two [Membe]
Long-Term Investment (Textual)
Captial contribution | ¥				¥ 25,000,000

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Accounts Receivable, Net (Details) - USD ($)	Sep. 30, 2019	Mar. 31, 2019
Receivables [Abstract]
Accounts receivable	$ 4,630,953	$ 4,247,476
Less: Allowance for doubtful accounts	(62,830)	(66,917)
Total accounts and notes receivable, net	$ 4,568,123	$ 4,180,559

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Property, Plant and Equipment, Net (Details) - USD ($)	6 Months Ended
	Sep. 30, 2019	Mar. 31, 2019
Less: accumulated depreciation	$ (838,201)	$ (745,429)
Property, plant and equipment, net	$ 1,759,907	1,158,898
Machinery [Member]
Useful life	10 years
Property, plant and equipment, gross	$ 632,683	658,043
Electric equipment [Member]
Property, plant and equipment, gross	$ 143,084	138,338
Electric equipment [Member] | Minimum [Member]
Useful life	3 years
Electric equipment [Member] | Maximum [Member]
Useful life	5 years
Office equipment [Member]
Useful life	5 years
Property, plant and equipment, gross	$ 74,097	78,917
Vehicles [Member]
Useful life	4 years
Property, plant and equipment, gross	$ 176,335	122,969
Leasehold improvement [Member]
Property, plant and equipment, gross	$ 1,571,909	$ 906,060
Leasehold improvement [Member] | Minimum [Member]
Useful life	3 years
Leasehold improvement [Member] | Maximum [Member]
Useful life	10 years

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Accrued Expenses and Other Liabilities (Details) - USD ($)	Sep. 30, 2019	Mar. 31, 2019
Payables and Accruals [Abstract]
Accrued payroll and welfare	$ 175,745	$ 36,010
Other payable for leasehold improvements		119,535
Accrued professional service expenses		187,444
Staff reimbursement	170,246	183,857
Interest payable	183,012
Other current liabilities	172,873	164,676
Total accrued expenses and other current liabilities	$ 701,876	$ 691,522

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Convertible Notes (Details) - USD ($)	Sep. 30, 2019	Mar. 31, 2019
Convertible notes Net carrying value, Short-term	$ 4,936,193
Convertible notes Net carrying value, Long-term	818,230
Convertible notes Principal outstanding, Total	55,052	$ 41,706
Convertible Notes [Member]
Convertible notes Principal outstanding, Short-term	7,391,305
Convertible notes Unamortized issuance cost, Short-term	(2,455,112)
Convertible notes Net carrying value, Short-term	4,936,193
Convertible notes Principal outstanding, Long-term	880,852
Convertible notes Unamortized issuance cost, Long-term	(62,622)
Convertible notes Net carrying value, Long-term	818,230
Convertible notes Principal outstanding, Total	8,272,157
Convertible notes Unamortized issuance cost, Total	(2,517,734)
Convertible notes Net carrying value, Total	$ 5,754,423

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Related Party Transactions and Balances (Details Textual) - USD ($)	6 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Mar. 31, 2019
Related Party Transactions and Balances (Textual)
Revenue from sales transactions	$ 3,215,147	$ 3,917,707
Repayment of related party	(610,204)	341,478
Jiangsu Health Pharmaceutical Investment Co., Ltd.[Member]
Related Party Transactions and Balances (Textual)
Revenue from sales transactions	1,819,760		$ 2,483,094
Repayment of related party	601,516
Feng Zhou [Member]
Related Party Transactions and Balances (Textual)
Revenue from sales transactions	1,819,760		$ 2,483,094
Repayment of related party	61,073
Taizhou Jiutian Pharmaceutical Co. Ltd.[Member]
Related Party Transactions and Balances (Textual)
Revenue from sales transactions	246,476	6,687
Taizhou Su Xuan Tang Chinese Medicine Clinic [Member]
Related Party Transactions and Balances (Textual)
Revenue from sales transactions	22,327	8,822
Taizhou Su Xuan Tang Chinese hospital Co., Ltd [Member]
Related Party Transactions and Balances (Textual)
Revenue from sales transactions	0	$ 109,018
Jianping Zhou [Member]
Related Party Transactions and Balances (Textual)
Revenue from sales transactions	1,834,883
Repayment of related party	15,123
Jianbin Zhou [Member]
Related Party Transactions and Balances (Textual)
Repayment of related party	$ 745

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Bank Loans

6 Months Ended

Sep. 30, 2019

Brokers and Dealers [Abstract]

Bank loans

Note 11 – Bank loans

	September 30,		March 31,
	2019		2019
	(unaudited)
Car loan – current portion	$	43,491	$	27,817

	September 30,		March 31,
	2019		2019
	(unaudited)
Car loan – non-current	$	55,052	$	41,706

Original car loan of $69,953 at 12% annual interest rate was made from October 1, 2018 to September 30, 2021. A new car loan of $47,568 at 9.54% annual interest rate was made from July 1, 2019, to June 30, 2022. Both cars were pledged as collateral for loans until full settlement.

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Property, Plant and Equipment, Net

6 Months Ended

Sep. 30, 2019

Property, Plant and Equipment [Abstract]

Property, plant and equipment, net

Note 7 – Property, plant and equipment, net

Property, plant and equipment consist of the following:

	Useful	September 30,			March 31,
	life	2019			2019
		(unaudited)
Machinery	10 years	$	632,683		$	658,043
Electric equipment	3~5 years		143,084			138,338
Office equipment	5 years		74,097			78,917
Vehicles	4 years		176,335			122,969
Leasehold improvement	3~10 years		1,571,909			906,060
Less: Accumulated depreciation			(838,201	)		(745,429	)
		$	1,759,907		$	1,158,898

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Summary of Significant Accounting Policies (Details)	6 Months Ended
	Sep. 30, 2019
Machinery [Member]
Residual value rate	5.00%
Useful live	10 years
Electric equipment [Member]
Residual value rate	5.00%
Electric equipment [Member] | Minimum [Member]
Useful live	3 years
Electric equipment [Member] | Maximum [Member]
Useful live	5 years
Office equipment [Member]
Residual value rate	5.00%
Useful live	5 years
Vehicles [Member]
Residual value rate	5.00%
Useful live	4 years
Leasehold improvement cost [Member]
Residual value rate	5.00%
Leasehold improvement cost [Member] | Minimum [Member]
Useful live	3 years
Leasehold improvement cost [Member] | Maximum [Member]
Useful live	10 years

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Property, Plant and Equipment, Net (Tables)

6 Months Ended

Sep. 30, 2019

Property, Plant and Equipment [Abstract]

Schedule of property, plant and equipment

	Useful	September 30,			March 31,
	life	2019			2019
		(unaudited)
Machinery	10 years	$	632,683		$	658,043
Electric equipment	3~5 years		143,084			138,338
Office equipment	5 years		74,097			78,917
Vehicles	4 years		176,335			122,969
Leasehold improvement	3~10 years		1,571,909			906,060
Less: Accumulated depreciation			(838,201	)		(745,429	)
		$	1,759,907		$	1,158,898

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Bank Loans (Tables)

6 Months Ended

Sep. 30, 2019

Brokers and Dealers [Abstract]

Schedule of bank loans

	September 30,		March 31,
	2019		2019
	(unaudited)
Car loan – current portion	$	43,491	$	27,817

	September 30,		March 31,
	2019		2019
	(unaudited)
Car loan – non-current	$	55,052	$	41,706

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Related Party Transactions and Balances (Details 1) - USD ($)	Sep. 30, 2019	Mar. 31, 2019
Due to related parties	$ 1,834,883	$ 2,483,094
Jiangsu Health Pharmaceutical Investment Co., Ltd.[Member]
Due to related parties	338,005	939,521
Feng Zhou [Member]
Due to related parties	1,481,755	1,542,828
Jianping Zhou [Member]
Due to related parties	15,123
Jianbin Zhou [Member]
Due to related parties		$ 745

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Convertible Notes (Details Textual) - USD ($)		6 Months Ended
	Apr. 16, 2019	Sep. 30, 2019	Dec. 31, 2019
Material terms of convertible notes, description		● The aggregate principal amount of the Series A Notes is $10,000,000 and the Series B Notes is $5,000,000. All of the aggregate principal amount of the Series B Notes will constitute Restricted Principal. If an Investor prepays any amount under such Investor's Investor Note, an equal amount of the Restricted Principal becomes unrestricted principal under such Investor's Series B Note. The amount raised by the Company upon closing of the PIPE transaction was $10,000,000 from Series A Notes. ● The expiration date of Notes and warrant shall be October 2, 2020 and May 2, 2023 respectively. The aggregate redemption amount of the Notes shall be redeemed in installments on or before the expiration date. ● The interest rate on the Convertible Notes is eight percent (8%) per annum. In the event of default, the Interest Rate shall be increased to eighteen percent (18%) per annum. ● The initial fixed conversion price will be $8.38 per share, subject to reduction and adjustment for stock splits, stock dividends, and similar events. ● During an Event of Default Redemption Right Period the Investor may convert all, or any part of, the Conversion Amount into Ordinary Shares at the Alternate Conversion Price. ● The Alternate Conversion Price is the lowest of (i) the applicable Conversion Price as in effect on the applicable Conversion Date of the applicable Alternate Conversion, (ii) 80% of the volume-weighted average price ("VWAP") of the Ordinary Shares as of the Trading Day immediately preceding the delivery or deemed delivery of the applicable Conversion Notice, (iii) 80% of the VWAP of the Ordinary Shares as of the Trading Day of the delivery or deemed delivery of the applicable Conversion Notice and (iv) 80% of the price computed as the quotient of (I) the sum of the VWAP of the Ordinary Shares for each of the three (3) Trading Days with the lowest VWAP of the Ordinary Shares during the fifteen (15) consecutive Trading Day period ending and including the Trading Day immediately preceding the delivery or deemed delivery of the applicable Conversion Notice, divided by (II) three (3) (such period, the "Alternate Conversion Measuring Period"). ● The aggregate number of Series A and Series B warrant shares to be converted on expiration is 596,658 and 298,330 shares respectively.
Equity component in stockholders equity and warrants value		$ 436,626
Equity component		436,626
Warrants value		2,112,766
Issuance costs attributable to liability component		$ 1,641,050
Effective interest rate		25.70%
Series A Preferred Stock [Member]
Aggregate redemption price per share			$ 10,939,410.21
Warrant [Member]
Purchase of warrants shares	1
Securities Purchase Agreement [Member]
Debt principal amount	$ 10,000,000
Shares issuable upon conversion, percentage	50.00%
Exercise price	$ 8.38
Conversion of stock, description	(i) a Series A Note in the principal amount of $ 10 million, and (ii) a Series B Note in the principal amount of $ 5 million and (2) warrants to purchase such amount of shares of the company’s ordinary shares equal to 50% of the shares issuable upon conversion of the Notes, exercisable for a period of five years at an exercise price of $8.38, for consideration consisting of (i) a cash payment of $10,000,000, and (ii) a secured promissory note payable by the Investors to the Company in the principal amount of $5 million.
Aggregate principal amount	$ 15,000,000
Third Party Placement Agent and Lawyers [Member]
Equity component in stockholders equity and warrants value		$ 699,029
Equity component		262,403
Warrants value		2,112,766
Issuance costs attributable to liability component		3,491,413
Debt issuance costs		$ 3,753,816

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Bank Loans (Details Textual)	6 Months Ended
	Sep. 30, 2019 USD ($)
Bank Loans (Textual)
Bank loans , description	Original car loan of $69,953 at 12% annual interest rate was made from October 1, 2018 to September 30, 2021. A new car loan of $47,568 at 9.54% annual interest rate was made from July 1, 2019, to June 30, 2022. Both cars were pledged as collateral for loans until full settlement.
Original car loan [Member]
Bank Loans (Textual)
Car loan	$ 69,953
Annual interest rate	12.00%
New car loan [Member]
Bank Loans (Textual)
Car loan	$ 47,568
Annual interest rate	9.54%

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Long-Term Investment

6 Months Ended

Sep. 30, 2019

Investments, All Other Investments [Abstract]

Long-term investment

Note 10 – Long-term investment

	As of		As of
	September 30, 2019		March 31, 2019
	(unaudited)
Long-term investment	$	3,497,629	$	-

In June 2019, Taizhou Suxuantang entered into a limited partnership agreement with Huangshan Panjie Investment Management Co., Ltd. (the "Fund"). The company is committed to contribute $7 million (RMB50 million) into the Fund in two installments, with one installment of $3.5 million (RMB 25 million) made on June 14, 2019, and the second installment of $3.5 million (RMB 25 million) to be made no later than October 31, 2019. Long-term investment balance as of September 30, 2019 represents the carrying value of cash with the investment management company due to cash deposited with the Fund has not been used for equity investment.

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Prepayments, Receivables and Other Assets

6 Months Ended

Sep. 30, 2019

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Prepayments, receivables and other assets

Note 6 – Prepayments, receivables and other assets

As of September 30, 2019, and March 31, 2019, prepayments, receivables and other assets consisted of the following:

	September 30,		March 31,
	2019		2019
	(unaudited)
Staff IOU	$	1,827,152	$	670,619
Others		195,617		36,718
	$	2,022,769	$	707,337

The Staff IOU are short-term borrowings for business travelling purpose which should be paid off by fiscal year end.

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Construction in Progress (Tables)

6 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Schedule of construction in progress

	As of		As of
	September 30, 2019		March 31, 2019
	(unaudited)
Factory	$	-	$	129,453
Workshop		-		519,782
Retail outlet		180,000		-
	$	180,000	$	649,235

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Convertible Notes (Tables)

6 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Schedule of unaudited net carrying amount

	Principal outstanding		Unamortized issuance cost			Net carrying value
Short-term
September 30, 2019
Convertible notes	$	7,391,305	$	(2,455,112	)	$	4,936,193
Long-term
September 30, 2019
Convertible notes	$	880,852	$	(62,622	)	$	818,230
Total
September 30, 2019
Convertible notes	$	8,272,157	$	(2,517,734	)	$	5,754,423

Schedule of net carrying amount of the equity component

	Amount allocated to conversion option		Issuance cost		Equity component, net
September 30, 2019
Convertible notes	$	699,029	$	262,403	$	436,626

Schedule of amortization of issuance cost, debt discount and interest cost

	Issuance costs and debt discount		Convertible note interest		Total
Six months period ended September 30, 2019	$	1,672,708	$	470,823	$	2,143,531

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Summary of Significant Accounting Policies (Details Textual) - USD ($)	6 Months Ended	12 Months Ended
	Sep. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Mar. 31, 2018
Summary of Significant Accounting Policies (Textual)
Cash and cash equivalents	$ 8,247,069	$ 9,130,849	$ 383,606	$ 577,979
Restricted cash	$ 77,158	161,084
Intangible assets amortized useful life	Intangible assets represented the trade mark registered in the PRC and purchased software which are amortized on a straight-line basis over a useful life of ten year.
Impairment of intangible assets
Impairment of property, plant and equipment

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Loan Receivable (Tables)

6 Months Ended

Sep. 30, 2019

Receivables [Abstract]

Schedule of Loan receivable

	September 30,		March 31,
	2019		2019
	(unaudited)
Loan receivable	$	1,500,000	$	-

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Basis of presentation

(a) Basis of presentation

The accompany unaudited condensed consolidated interim 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"). In the opinion of management, these unaudited condensed consolidated interim financial statements reflect all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly, in all material respects, the Company's consolidated financial position, results of operations, cash flows and changes in equity for the interim periods presented. These unaudited condensed interim financial statements do not include certain information and footnote disclosures as required by the U.S. GAAP for complete annual financial statements. Therefore, these unaudited condensed consolidated interim financial statements should be read in conjunction with the financial statements and related notes included in the Company's 20-F for the year ended March 31, 2019.

Basis of consolidation

(b) Basis of consolidation

The condensed consolidated interim 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.

The VIE, Taizhou Suxuantang is controlled by the Company through a series of contractual arrangements. 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. The Company does not have any VIEs that are not consolidated in the financial statements.

Foreign currency translation

(c) Foreign currency translation

Transactions 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.

The 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 as they are the primary currency of the economic environment in which each subsidiary operates.

In 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.

Use of estimates

(d) Use of estimates

The preparation of condensed consolidated interim 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.

Changes 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 September 30, 2019 and 2018: determinations of the useful lives of long-lived assets, estimates of allowances for doubtful accounts, sales return rate, valuation assumptions in performing asset impairment tests of long-lived assets, valuation assumptions in measuring the value of convertible notes debt component, equity component, and warrants.

Fair values of financial instruments

(e) Fair values of financial instruments

ASC 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 nonfinancial assets and liabilities from its disclosure requirements. Accordingly, the aggregate fair value amounts do not represent the underlying value of the Company. The carrying values of cash, cash equivalents, restricted cash, accounts receivables, note receivable, advance to suppliers, loan receivable, other current assets, prepaid expenses, bank loan – current portion, accounts payables, note payable, advance from customers, refund liabilities, income tax payable, accrued expenses, other current liabilities, and bank loan – non-current approximate their fair values due to their generally short maturities. There is no transfer between levels during the six months period ended September 30, 2019.

A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value:

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

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.

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

Cash and cash equivalents

(f) Cash and cash equivalents

Cash and cash equivalents primarily consist of bank deposits with original maturities of three months or less, which are unrestricted as to withdrawal and use.

Restricted cash

(g) Restricted cash

Restricted cash is cash held as collateral for transactions and a loan the Company has entered into.

Accounts receivable

(h) Accounts receivable

Accounts receivable are recorded at the invoiced amount less an allowance for any uncollectible accounts and do not bear interest, which are due on demand. Management reviews the adequacy of the allowance for doubtful accounts on an ongoing basis, using historical collection trends and aging of receivables. Management also periodically evaluates individual customer's financial condition, credit history, and the current economic conditions to make adjustments in the allowance when it is considered necessary. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

Inventories

(i) Inventories

Inventories primarily include raw materials and finished goods.

Inventories 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 work in progress.

Advance to suppliers

(j) Advance to suppliers

Advance 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 prepayments will be utilized to offset the Company's future payments. These amounts are unsecured, non-interest bearing and generally short-term in nature.

Allowances 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 September 30, 2019, and March 31, 2019, the allowances were nil and nil, respectively.

Loan receivable

(k) Loan receivable

Loan receivable is recorded at the agreement amount and interest receivable is being accrued accordingly. Management reviews the adequacy of loan recoverability and provision for loan losses on an ongoing basis based on historical repayment trends, borrower's financial condition, credit history, and the current economic conditions to make adjustments in the provision when it is considered necessary. Loan receivable balance is charged off against the provision after all means of collection have been exhausted and the potential for recovery is considered remote.

Property, plant and equipment

(l) Property, plant and equipment

Property, plant and equipment primarily consists of machinery, electric equipment, office equipment and leasehold improvements, which is stated at cost less accumulated depreciation and amortization less any provision required for impairment in value. Depreciation and amortization are computed using the straight-line method with residual value based on the estimated useful life. The residual value rate and useful life of property, plant and equipment are summarized as follows:

Asset category	Residual value rate	Useful live
Machinery	5%	10 years
Electric equipment	5%	3~5 years
Office equipment	5%	5 years
Vehicles	5%	4 years
Leasehold improvement cost	5%	3~10 years

The Company reviews property, plant and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An asset is considered impaired if its carrying amount exceeds the future net undiscounted cash flows that the asset is expected to generate. If such asset is considered to be impaired, the impairment recognized is the amount by which the carrying amount of the asset, if any, exceeds its fair value determined using a discounted cash flow model. For the six months ended September 30, 2019, and year ended March 31, 2019, there was no impairment of property, plant and equipment.

Costs 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 unaudited condensed consolidated statements of operation and comprehensive income.

Intangible assets

(m) Intangible assets

Intangible assets are stated at cost less accumulated amortization. Intangible assets represented the trade mark registered in the PRC and purchased software which are amortized on a straight-line basis over a useful life of ten year.

The 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 six months ended September 30, 2019, and the year ended March 31, 2019, there was no impairment of intangible assets.

Construction in progress

(n) Construction in progress

Construction in progress records the cost of construction work, which is not yet completed.

Long-term investment

(o) Long-term investment

The Company's non-marketable equity security is investment in privately held investment management company without readily determinable market values. According to ASC 321-10-35-2, it accounts for non-marketable securities on a prospective basis. Under the new requirement equity investments that do not have readily determinable fair values and do not qualify for the net asset value practical expedient are eligible for the measurement alternative. For the Company's passive and without significant influence or control equity investment in private company which do not have readily determinable fair values, the Company has elected the measurement alternative defined as cost, less impairment, plus or minus adjustments resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The investment is reviewed periodically to determine if its value has been impaired and adjustments are recorded as necessary in profit or loss for the period. During the six months period ended September 30, 2019, no impairment loss was identified and no loss related to revaluation of its investment in the private company.

Convertible note, net

(p) Convertible note, net

The Company accounts for its convertible senior notes in accordance with ASC 470-20 "Debt with Conversion and Other Options". The Company separately accounts for the liability and equity components of convertible debt Instruments. The liability component at issuance is recognized at fair value, based on the fair value of a similar instrument that does not have a conversion feature. The equity component is based on the excess of the principal amount of the debentures over the fair value of the liability component, after adjusting for an allocation of debt issuance costs, and is recorded as additional paid in capital. Debt discounts are amortized as additional non-cash interest expense over the expected life of the debt using an effective interest rate method. In accounting for the issuance costs related to the Notes, the allocation of issuance costs incurred between the liability and equity components were based on their relative values.

Revenue recognition

(q) Revenue recognition

In accordance with ASC Topic 606, revenues are recognized when control of the promised goods is transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods. In determining when and how much revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; (5) recognize revenue when (or as) the entity satisfies a performance obligation.

Sales of pharmaceutical products represent the invoiced value of goods, net of value-added taxes, sales returns, trade discounts and allowances. Revenue is recognized base on agreed price determined in the contracts with the customers, when the products are delivered and accepted by customers.

Cost of revenue

(r) Cost of revenue

Cost 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.

Income taxes

(s) Income taxes

Current 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.

The 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 September 30, 2019 and for the six months period ended September 30 2019.

Comprehensive income

(t) Comprehensive income

Comprehensive income includes net income and foreign currency adjustments. Comprehensive income is reported in the statements of operations and comprehensive income.

Accumulated other comprehensive income, as presented on the balance sheets are the cumulative foreign currency translation adjustments.

Leases

(u) Leases

Leases are classified as either capital or operating leases. Leases that transfer substantially all the benefits and risks incidental to the ownership of assets are accounted for as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operating leases wherein rental payments are recognized in the condensed consolidated income statements on a straight-line basis over the lease terms. The Company had no capital leases for the six months ended September 30, 2019, and the year ended March 31, 2019, respectively.

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Unaudited Condensed Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Cash Flows from Operating Activities:
Net (loss) / income from operations	$ (2,348,069)	$ 995,046
Adjustments to reconcile net income to net cash provided by operating activities:
Convertible note - Accretion of financing cost	1,672,708
Depreciation of property, plant and equipment	129,429	95,866
Amortization of intangible assets	4,111	3,547
Deferred cost		(48,454)
Deferred income taxes		5,882
Changes in operating assets and liabilities:
Accounts receivable	(664,341)	(1,572,815)
Inventories	103,404	89,702
Advance to suppliers	22,451	(119,452)
Prepayments, receivables and other assets	(1,140,076)	111,914
Accounts payable	389,515	(213,638)
Advances from customers	68,754	(156,162)
Accrued expenses and other current liabilities	(145,500)	(69,016)
Income tax payable	(33,298)	384,213
Notes receivable	78,843	191,784
Notes payable	(161,765)	(166,236)
Net Cash Used In Operating Activities	(2,023,834)	(467,819)
Cash Flows from Investing Activities:
Purchase of property, plant and equipment	(123,543)	(84,402)
Construction in progress	(250,178)
Long-term investment	(3,614,146)
Loan receivable	(1,500,000)
Net Cash Used in Investing Activities	(5,487,867)	(84,402)
Cash Flows From Financing Activities:
Proceeds from bank loan	49,152
Repayment of bank loan	(14,777)
Proceeds from convertible note	10,000,000
Payment of debt issuance cost	(1,641,050)
Repayment of convertible note	(869,565)
Received from / (Payment to) related party	(610,204)	341,478
Net Cash Provided by Financing Activities	6,913,556	341,478
Effect of Exchange Rate Changes on Cash	(369,561)	16,370
Net Decrease In Cash	(967,706)	(194,373)
Cash, cash equivalents and restricted cash at Beginning of Period	9,130,849	577,979
Cash, cash equivalents and restricted cash at End of Period	8,247,069	383,606
Supplemental Disclosure of Non-Cash Activities
Shares issued for convertible note repayment	907,372
Supplemental Cash Flow Information
Cash paid for interest expense	287,810
Cash paid for income tax	$ 9,575	$ 50,404

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Shareholders' Equity

6 Months Ended

Sep. 30, 2019

Shareholders Equity

Shareholders' equity

Note 14 – Shareholders' equity

Restricted shares

Upon the closing of the PIPE transaction with two unaffiliated institutional investors on May 2, 2019, the Company delivered an aggregate of four million Ordinary Shares to the holder of the Convertible Notes with certain restrictive legends (the "Pre-Delivery Shares"). The Pre-Delivery Shares may not be offered for sale, sold, transferred or assigned (i) in the absence of (a) an effective registration statement for the securities under the securities act of 1933, as amended, or (b) an opinion of counsel to the holder (if requested by the company), in a form reasonably acceptable to the Company, that registration is not required under said act or (ii) unless sold or eligible to be sold pursuant to Rule 144 or rule 144A under said Act. Notwithstanding the foregoing, the securities may be pledged in connection with a bona fide margin account or other loan or financing arrangement secured by the Pre-Delivery Shares.

Any Pre-Delivery Shares issued to the investors (or its designee) that remains outstanding following the repayment in full of all obligations outstanding under the Convertible Notes, shall be returned to the Company for cancellation. As of September 30, 2019, the Convertible Notes were outstanding and Pre-Delivery Shares were not returned for cancellation. Company expects to redeem the Convertible Notes in full in accordance with the terms of Convertible Notes and other agreements that the Company entered or is going to enter into with such investors in connection with the Convertible Notes, and have all the  Pre-Delivery Shares cancelled upon the full redemption.

Ordinary shares issued for convertible notes settlement

During the six months period ended September 30, 2019, 518,165 ordinary shares were issued with a fair value of $907,372 for convertible notes principal and interest partial settlement.

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Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2019	Mar. 31, 2019
Current Assets
Cash and cash equivalents	$ 8,247,069	$ 9,130,849
Restricted cash	77,158	161,084
Accounts receivable	4,568,123	4,180,559
Notes receivable		81,265
Inventories	846,281	1,007,918
Advance to suppliers	280,942	319,088
Loan receivable	1,500,000
Prepayments, receivables and other assets	2,022,769	707,337
Total Current Assets	17,542,342	15,588,100
Property, plant and equipment, net	1,759,907	1,158,898
Construction in progress	180,000	649,235
Intangible assets, net	53,386	61,096
Deferred tax assets, net	12,679	13,504
Long-term investment	3,497,629
Total Non-Current Assets	5,503,601	1,882,733
Total Assets	23,045,943	17,470,833
Current Liabilities
Bank loan - current portion	43,491	27,817
Convertible note - current portion	4,936,193
Notes payable	62,533	233,336
Accounts payable	1,959,426	1,685,419
Refund liabilities	73,533	78,317
Advance from customers	120,575	57,553
Amounts due to related parties	1,834,883	2,483,094
Accrued expenses and other current liabilities	701,876	691,522
Income tax payable	1,031,016	1,064,314
Total Current Liabilities	10,763,526	6,321,372
Bank loan - non-current	55,052	41,706
Convertible note - non-current	818,230
Total Non-Current Liabilities	873,282	41,706
Total Liabilities	11,636,808	6,363,078
Commitments and Contingencies
Shareholders' Equity
Common stocks (par value $0.001 per share, unlimited shares authorized; 27,224,866 shares issued and 23,224,866 shares outstanding at September 30, 2019; 22,706,701 shares issued and outstanding at March 31, 2019 respectively)	23,224	22,706
Additional paid-in capital	11,407,028	7,950,782
Retained earnings	735,803	3,083,872
Accumulated other comprehensive income	(756,920)	50,395
Total Shareholders' Equity	11,409,135	11,107,755
Total Liabilities and Shareholders' Equity	$ 23,045,943	$ 17,470,833

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Inventories, Net (Details) - USD ($)	Sep. 30, 2019	Mar. 31, 2019
Inventory Disclosure [Abstract]
Raw material	$ 341,759	$ 315,686
Finished goods	526,223	715,344
Provision for inventory	(21,701)	(23,112)
Inventories	$ 846,281	$ 1,007,918

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Construction In Progress (Details) - USD ($)	Sep. 30, 2019	Mar. 31, 2019
Construction in progress	$ 180,000	$ 649,235
Retail outlet [Member]
Construction in progress	180,000
Factory [Member]
Construction in progress		129,453
Workshop [Member]
Construction in progress		$ 519,782

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Bank loans (Details) - USD ($)	Sep. 30, 2019	Mar. 31, 2019
Brokers and Dealers [Abstract]
Car loan - current portion	$ 43,491	$ 27,817
Car loan - non-current	$ 55,052	$ 41,706

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Shareholders' equity (Details) - USD ($)	May 02, 2019	Sep. 30, 2019	Mar. 31, 2019
Shareholders' equity (Textual)
Ordinary shares issued		27,224,866	22,706,701
Ordinary Shares [Member]
Shareholders' equity (Textual)
Restricted shares, description	The Company delivered an aggregate of four million Ordinary Shares to the holder of the Convertible Notes with certain restrictive legends (the "Pre-Delivery Shares").
Ordinary shares issued		518,165
Fair value of convertible notes principal and interest partial settlement		$ 907,372

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Convertible Notes (Details 1)	6 Months Ended
	Sep. 30, 2019 USD ($)
Debt Disclosure [Abstract]
Amount allocated to conversion option	$ 699,029
Issuance cost	262,403
Equity component, net	$ 436,626

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Long-Term Investment (Tables)

6 Months Ended

Sep. 30, 2019

Investments, All Other Investments [Abstract]

Schedule of long term investment

	As of		As of
	September 30, 2019		March 31, 2019
	(unaudited)
Long-term investment	$	3,497,629	$	-

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Related Party Transactions and Balances (Tables)

6 Months Ended

Sep. 30, 2019

Related Party Transactions [Abstract]

Schedule of nature of relationships with related parties

Name	Relationship with the Company
Jianping Zhou	Father of major shareholders of the Company and two of Taizhou Suxuantang shareholders, controlling shareholder of Taizhou Suxuantang from its inception to May 8, 2017
Jianbin Zhou	Father of major shareholders of the Company and one of Taizhou Suxuantang shareholders
Taizhou Jiutian Pharmaceutical Co. Ltd.	An entity controlled by Jianping Zhou
Taizhou Su Xuan Tang Chinese Medicine Co., Ltd.	An entity controlled by Jianping Zhou
Jiangsu Health Pharmaceutical Investment Co., Ltd.	An entity controlled by Jianping Zhou
Taizhou Su Xuan Tang Chinese Medicine Clinic	An entity controlled by Jianping Zhou
Taizhou Su Xuan Tang Chinese hospital Co., Ltd	An entity controlled by Jianping Zhou

Schedule of amount due to related parties

	As of		As of
	September 30, 2019		March 31, 2019
	(unaudited)
Jiangsu Health Pharmaceutical Investment Co., Ltd.	$	338,005	$	939,521
Feng Zhou		1,481,755		1,542,828
Jianping Zhou		15,123		-
Jianbin Zhou		-		745
	$	1,834,883	$	2,483,094

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Construction In Progress

6 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Construction in progress

Note 8 – Construction in progress

A construction in progress item is not depreciated until the asset is fully constructed for its intended use. Construction in progress consist of the following:

	As of		As of
	September 30, 2019		March 31, 2019
	(unaudited)
Factory	$	-	$	129,453
Workshop		-		519,782
Retail outlet		180,000		-
	$	180,000	$	649,235

Construction in progress relates to unfinished retail outlet construction at Huangshan City, Anhui Province. Construction in process will be transferred to leasehold improvement when it is finished. The workshop will start to depreciate when assets are ready for the intended use.

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Inventories, Net

6 Months Ended

Sep. 30, 2019

Inventory Disclosure [Abstract]

Inventories, net

Note 4 – Inventories, net

As of September 30, 2019, and March 31, 2019, inventories consisted of the following:

	September 30,			March 31,
	2019			2019
	(unaudited)
Raw material	$	341,759		$	315,686
Finished goods		526,223			715,344
Provision for inventory		(21,701	)		(23,112	)
	$	846,281		$	1,007,918

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Convertible Notes

6 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Convertible notes

Note 12 – Convertible notes

The unaudited net carrying amount of the Notes were as follows:

	Principal outstanding		Unamortized issuance cost			Net carrying value
Short-term
September 30, 2019
Convertible notes	$	7,391,305	$	(2,455,112	)	$	4,936,193
Long-term
September 30, 2019
Convertible notes	$	880,852	$	(62,622	)	$	818,230
Total
September 30, 2019
Convertible notes	$	8,272,157	$	(2,517,734	)	$	5,754,423

The unaudited net carrying amount of the equity component of the Notes were as follows:

	Amount allocated to conversion option		Issuance cost		Equity component, net
September 30, 2019
Convertible notes	$	699,029	$	262,403	$	436,626

Amortization of issuance cost, debt discount and interest cost:

	Issuance costs and debt discount		Convertible note interest		Total
Six months period ended September 30, 2019	$	1,672,708	$	470,823	$	2,143,531

The effective interest rate to derive the liability component fair value is 25.70% for the Convertible Notes. 

In accounting for the issuance of the Convertible Notes, the Company separated the Convertible Notes into liability and equity components. The carrying amount of the equity component and warrants value representing the conversion option was $2,549,392 (equity component $436,626, warrants value $2,112,766). Equity component was determined by deducting the fair value of the liability component from the par value of the Convertible Notes. Warrants value was determined with the Black Scholes model. Equity component is not remeasured as long as it continues to meet the conditions for equity classification. The excess of the principal amount of the liability component over its carrying amount ("debt discount") is amortized to interest expense over the term of the Convertible Notes.

Debt issuance costs related to the Convertible Notes comprised of commissions paid to third party placement agent, lawyers, and warrants value of $3,753,816. The Company allocated the total amount incurred to the liability and equity components of the Convertible Notes based on their relative values. Issuance costs attributable to the liability component were $3,491,413 and will be amortized to interest expense using the effective interest method over the contractual term. Issuance costs attributable to the equity component were $262,403 and netted with the equity component in stockholders' equity of $699,029 and warrant value of $2,112,766.

PIPE Transaction

On April 16, 2019, the company entered into certain securities purchase agreement with certain unaffiliated institutional investors relating to a private placement of (1) Senior Convertible Notes in the aggregate principal amount of $15 million, consisting of (i) a Series A Note in the principal amount of $ 10 million, and (ii) a Series B Note in the principal amount of $ 5 million and (2) warrants to purchase such amount of shares of the company's ordinary shares equal to 50% of the shares issuable upon conversion of the Notes, exercisable for a period of five years at an exercise price of $8.38, for consideration consisting of (i) a cash payment of $10,000,000, and (ii) a secured promissory note payable by the Investors to the Company in the principal amount of $5 million.

Material Terms of the Convertible Notes:

● The aggregate principal amount of the Series A Notes is $10,000,000 and the Series B Notes is $5,000,000. All of the aggregate principal amount of the Series B Notes will constitute Restricted Principal. If an Investor prepays any amount under such Investor's Investor Note, an equal amount of the Restricted Principal becomes unrestricted principal under such Investor's Series B Note. The amount raised by the Company upon closing of the PIPE transaction was $10,000,000 from Series A Notes.

● The expiration date of Notes and warrant shall be October 2, 2020 and May 2, 2023 respectively. The aggregate redemption amount of the Notes shall be redeemed in installments on or before the expiration date.

● The interest rate on the Convertible Notes is eight percent (8%) per annum. In the event of default, the Interest Rate shall be increased to eighteen percent (18%) per annum.

● The initial fixed conversion price will be $8.38 per share, subject to reduction and adjustment for stock splits, stock dividends, and similar events.

● During an Event of Default Redemption Right Period the Investor may convert all, or any part of, the Conversion Amount into Ordinary Shares at the Alternate Conversion Price.

● The Alternate Conversion Price is the lowest of (i) the applicable Conversion Price as in effect on the applicable Conversion Date of the applicable Alternate Conversion, (ii) 80% of the volume-weighted average price ("VWAP") of the Ordinary Shares as of the Trading Day immediately preceding the delivery or deemed delivery of the applicable Conversion Notice, (iii) 80% of the VWAP of the Ordinary Shares as of the Trading Day of the delivery or deemed delivery of the applicable Conversion Notice and (iv) 80% of the price computed as the quotient of (I) the sum of the VWAP of the Ordinary Shares for each of the three (3) Trading Days with the lowest VWAP of the Ordinary Shares during the fifteen (15) consecutive Trading Day period ending and including the Trading Day immediately preceding the delivery or deemed delivery of the applicable Conversion Notice, divided by (II) three (3) (such period, the "Alternate Conversion Measuring Period").

● The aggregate number of Series A and Series B warrant shares to be converted on expiration is 596,658 and 298,330 shares respectively.

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Summary of Significant Accounting Policies

6 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Summary of significant accounting policies

Note 2 – Summary of significant accounting policies

(a) Basis of presentation

The accompany unaudited condensed consolidated interim 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"). In the opinion of management, these unaudited condensed consolidated interim financial statements reflect all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly, in all material respects, the Company's consolidated financial position, results of operations, cash flows and changes in equity for the interim periods presented. These unaudited condensed interim financial statements do not include certain information and footnote disclosures as required by the U.S. GAAP for complete annual financial statements. Therefore, these unaudited condensed consolidated interim financial statements should be read in conjunction with the financial statements and related notes included in the Company's 20-F for the year ended March 31, 2019.

(b) Basis of consolidation

The condensed consolidated interim 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.

The VIE, Taizhou Suxuantang is controlled by the Company through a series of contractual arrangements. 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. The Company does not have any VIEs that are not consolidated in the financial statements.

(c) Foreign currency translation

Transactions 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.

The 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 as they are the primary currency of the economic environment in which each subsidiary operates.

In 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.

(d) Use of estimates

The preparation of condensed consolidated interim 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.

Changes 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 September 30, 2019 and 2018: determinations of the useful lives of long-lived assets, estimates of allowances for doubtful accounts, sales return rate, valuation assumptions in performing asset impairment tests of long-lived assets, valuation assumptions in measuring the value of convertible notes debt component, equity component, and warrants.

(e) Fair values of financial instruments

ASC 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 nonfinancial assets and liabilities from its disclosure requirements. Accordingly, the aggregate fair value amounts do not represent the underlying value of the Company. The carrying values of cash, cash equivalents, restricted cash, accounts receivables, note receivable, advance to suppliers, loan receivable, other current assets, prepaid expenses, bank loan – current portion, accounts payables, note payable, advance from customers, refund liabilities, income tax payable, accrued expenses, other current liabilities, and bank loan – non-current approximate their fair values due to their generally short maturities. There is no transfer between levels during the six months period ended September 30, 2019.

A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value:

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

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.

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

(f) Cash and cash equivalents

Cash and cash equivalents primarily consist of bank deposits with original maturities of three months or less, which are unrestricted as to withdrawal and use.

(g) Restricted cash

Restricted cash is cash held as collateral for transactions and a loan the Company has entered into.

(h) Accounts receivable

Accounts receivable are recorded at the invoiced amount less an allowance for any uncollectible accounts and do not bear interest, which are due on demand. Management reviews the adequacy of the allowance for doubtful accounts on an ongoing basis, using historical collection trends and aging of receivables. Management also periodically evaluates individual customer's financial condition, credit history, and the current economic conditions to make adjustments in the allowance when it is considered necessary. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

(i) Inventories

Inventories primarily include raw materials and finished goods.

Inventories 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 work in progress.

(j) Advance to suppliers

Advance 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 prepayments will be utilized to offset the Company's future payments. These amounts are unsecured, non-interest bearing and generally short-term in nature.

Allowances 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 September 30, 2019, and March 31, 2019, the allowances were nil and nil, respectively.

(k) Loan receivable

Loan receivable is recorded at the agreement amount and interest receivable is being accrued accordingly. Management reviews the adequacy of loan recoverability and provision for loan losses on an ongoing basis based on historical repayment trends, borrower's financial condition, credit history, and the current economic conditions to make adjustments in the provision when it is considered necessary. Loan receivable balance is charged off against the provision after all means of collection have been exhausted and the potential for recovery is considered remote.

(l) Property, plant and equipment

Property, plant and equipment primarily consists of machinery, electric equipment, office equipment and leasehold improvements, which is stated at cost less accumulated depreciation and amortization less any provision required for impairment in value. Depreciation and amortization are computed using the straight-line method with residual value based on the estimated useful life. The residual value rate and useful life of property, plant and equipment are summarized as follows:

Asset category	Residual value rate	Useful live
Machinery	5%	10 years
Electric equipment	5%	3~5 years
Office equipment	5%	5 years
Vehicles	5%	4 years
Leasehold improvement cost	5%	3~10 years

The Company reviews property, plant and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An asset is considered impaired if its carrying amount exceeds the future net undiscounted cash flows that the asset is expected to generate. If such asset is considered to be impaired, the impairment recognized is the amount by which the carrying amount of the asset, if any, exceeds its fair value determined using a discounted cash flow model. For the six months ended September 30, 2019, and year ended March 31, 2019, there was no impairment of property, plant and equipment.

Costs 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 unaudited condensed consolidated statements of operation and comprehensive income.

(m) Intangible assets

Intangible assets are stated at cost less accumulated amortization. Intangible assets represented the trade mark registered in the PRC and purchased software which are amortized on a straight-line basis over a useful life of ten year.

The 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 six months ended September 30, 2019, and the year ended March 31, 2019, there was no impairment of intangible assets.

(n) Construction in progress

Construction in progress records the cost of construction work, which is not yet completed.

(o) Long-term investment

The Company's non-marketable equity security is investment in privately held investment management company without readily determinable market values. According to ASC 321-10-35-2, it accounts for non-marketable securities on a prospective basis. Under the new requirement equity investments that do not have readily determinable fair values and do not qualify for the net asset value practical expedient are eligible for the measurement alternative. For the Company's passive and without significant influence or control equity investment in private company which do not have readily determinable fair values, the Company has elected the measurement alternative defined as cost, less impairment, plus or minus adjustments resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The investment is reviewed periodically to determine if its value has been impaired and adjustments are recorded as necessary in profit or loss for the period. During the six months period ended September 30, 2019, no impairment loss was identified and no loss related to revaluation of its investment in the private company.

(p) Convertible note, net

The Company accounts for its convertible senior notes in accordance with ASC 470-20 "Debt with Conversion and Other Options". The Company separately accounts for the liability and equity components of convertible debt Instruments. The liability component at issuance is recognized at fair value, based on the fair value of a similar instrument that does not have a conversion feature. The equity component is based on the excess of the principal amount of the debentures over the fair value of the liability component, after adjusting for an allocation of debt issuance costs, and is recorded as additional paid in capital. Debt discounts are amortized as additional non-cash interest expense over the expected life of the debt using an effective interest rate method. In accounting for the issuance costs related to the Notes, the allocation of issuance costs incurred between the liability and equity components were based on their relative values.

(q) Revenue recognition

In accordance with ASC Topic 606, revenues are recognized when control of the promised goods is transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods. In determining when and how much revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; (5) recognize revenue when (or as) the entity satisfies a performance obligation.

Sales of pharmaceutical products represent the invoiced value of goods, net of value-added taxes, sales returns, trade discounts and allowances. Revenue is recognized base on agreed price determined in the contracts with the customers, when the products are delivered and accepted by customers.

(r) Cost of revenue

Cost 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.

(s) Income taxes

Current 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.

The 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 September 30, 2019 and for the six months period ended September 30 2019.

(t) Comprehensive income

Comprehensive income includes net income and foreign currency adjustments. Comprehensive income is reported in the statements of operations and comprehensive income.

Accumulated other comprehensive income, as presented on the balance sheets are the cumulative foreign currency translation adjustments.

(u) Leases

Leases are classified as either capital or operating leases. Leases that transfer substantially all the benefits and risks incidental to the ownership of assets are accounted for as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operating leases wherein rental payments are recognized in the condensed consolidated income statements on a straight-line basis over the lease terms. The Company had no capital leases for the six months ended September 30, 2019, and the year ended March 31, 2019, respectively.

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Unaudited Condensed Consolidated Statements of Operation and Comprehensive Income - USD ($)	6 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Income Statement [Abstract]
Revenues	$ 3,215,147	$ 3,917,707
Revenues generated from third parties	2,946,344	3,812,564
Revenue generated from related parties	268,803	105,143
Cost of revenue	(1,375,762)	(1,239,023)
Gross profit	1,839,385	2,678,684
Operating expenses
Selling expenses	(774,253)	(838,217)
General and administrative expenses	(1,285,885)	(513,532)
Total operating expenses	(2,060,138)	(1,351,749)
(Loss) / Income from operations	(220,753)	1,326,935
Other expenses, net
Interest (expense) / income, net	(2,170,561)	1,501
Other income / (loss), net	38,079	(984)
Total other (expenses) / income, net	(2,132,482)	517
(Loss) / Income before income taxes	(2,353,235)	1,327,452
Income tax expense	5,166	(332,406)
Net (Loss) / Income	(2,348,069)	995,046
Other comprehensive income
Foreign currency translation adjustment	(807,315)	321,074
Comprehensive (Loss) / Income	$ (3,155,384)	$ 1,316,120
Weighted average number of common shares
Basic	22,725,512	20,000,000
Diluted	22,725,512	20,000,000
Earnings per share
Basic	$ (0.10)	$ 0.05
Diluted	$ (0.10)	$ 0.05

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Accounts Receivable, Net (Tables)

6 Months Ended

Sep. 30, 2019

Receivables [Abstract]

Schedule of accounts receivable net

	September 30,			March 31,
	2019			2019
	(unaudited)
Accounts receivable	$	4,630,953		$	4,247,476
Less:  Allowance for doubtful accounts		(62,830	)		(66,917	)
Total accounts and notes receivable, net	$	4,568,123		$	4,180,559

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Commitments and Contingencies

6 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and contingencies

Note 16 – Commitments and contingencies

As of the date of this interim report, written assurance has been received that the second installment of $3.5 million (RMB 25 million) to be invested with Huangshan Panjie will not be required and such obligation will be borne by Fund or Fund manager if the contribution obligation is being called upon.

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Commitments and Contingencies (Details) - Sep. 30, 2019 - Huangshan Panjie [Member]	USD ($)	CNY (¥)
Commitments and Contingencies (Textual)
Second installment | $	$ 3,500,000
RMB [Member]
Commitments and Contingencies (Textual)
Second installment | ¥		¥ 25,000,000

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Prepayments, Receivables and Other Assets (Details) - USD ($)	Sep. 30, 2019	Mar. 31, 2019
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Staff IOU	$ 1,827,152	$ 670,619
Others	195,617	36,718
Prepayments, receivables and other assets, Total	$ 2,022,769	$ 707,337

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Long-Term Investment (Details) - USD ($)	Sep. 30, 2019	Mar. 31, 2019
Investments, All Other Investments [Abstract]
Long-term investment	$ 3,497,629

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Condensed Consolidated Statements Of Changes In Shareholders' Equity (Unaudited) - USD ($)	Common stocks	Additional paid-in capital	Retained earnings	Accumulated other comprehensive income	Total
Balance at Mar. 31, 2018	$ 20,000	$ 1,463,757	$ 1,544,645	$ 257,373	$ 3,285,775
Balance, shares at Mar. 31, 2018	20,000,000
Net income			995,046		995,046
Foreign currency translation gain				321,074	321,074
Foreign currency translation loss					321,074
Balanece at Sep. 30, 2018	$ 20,000	1,463,757	2,539,691	578,447	4,601,895
Balance, shares at Sep. 30, 2018	20,000,000
Balance at Mar. 31, 2019	$ 22,706	7,950,782	3,083,872	50,395	11,107,755
Balance, shares at Mar. 31, 2019	22,706,701
Net income			(2,348,069)		(2,348,069)
Foreign currency translation gain		3,487,226			3,487,226
Issuance of convertible notes		2,549,392			2,549,392
Issuance of shares for convertible note principal and interest partial settlement	$ 518	906,854			907,372
Issuance of shares for convertible note principal and interest partial settlement, shares	518,165
Foreign currency translation loss				(807,315)	(807,315)
Balanece at Sep. 30, 2019	$ 23,224	$ 11,407,028	$ 735,803	$ (756,920)	$ 11,409,135
Balance, shares at Sep. 30, 2019	23,224,866

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Inventories, Net (Tables)

6 Months Ended

Sep. 30, 2019

Inventory Disclosure [Abstract]

Schedule of inventories, net

	September 30,			March 31,
	2019			2019
	(unaudited)
Raw material	$	341,759		$	315,686
Finished goods		526,223			715,344
Provision for inventory		(21,701	)		(23,112	)
	$	846,281		$	1,007,918

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Document and Entity Information	6 Months Ended
	Sep. 30, 2019
Document And Entity Information
Entity Registrant Name	China SXT Pharmaceuticals, Inc.
Entity Central Index Key	0001723980
Amendment Flag	false
Current Fiscal Year End Date	--03-31
Document Type	6-K
Document Period End Date	Sep. 30, 2019
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Entity File Number	333-231839

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Subsequent Event

6 Months Ended

Sep. 30, 2019

Subsequent Event

Subsequent event

Note 17 – Subsequent event

Entry into Forbearance Agreements in Connection with the Event of Default Redemption Notices

On July 23 and 29, 2019, the company received from the investors an Event of Default Redemption Notice claimed that the company failed to timely make the instalment payment and elected to effect the redemption of $14,318,462.62 comprising in aggregate the entire principal amount, accrued and unpaid Interest. In addition, demand for the company to purchase the Series A Warrant issued for the Event of Default Black Scholes Value of not less than $1,208,384.07 was made.

On December 13, 2019, after negotiation with the Investors, , the company entered into certain Forbearance and Amendment Agreements with each Investor and agreed to redeem the Series A Notes for an aggregate redemption price of $10,939,410.21 in installments as set forth in the Forbearance Agreement. Concurrently with the execution of the Forbearance Agreement, the Investors and the Company have entered into the Lock-Up Agreements, Leak-Out Agreements and Mutual Releases.

Material Terms of the Agreements

Upon the execution of the Forbearance Agreements, the Investor shall Net all Restricted Principal outstanding under the Series B Note against the amounts outstanding under the Investor Note, after which the Investor Note, the Series B Note and the Series B Warrant shall no longer remain outstanding.

The Investors agreed, among other things, to the following:

(a) to forbear from (i) taking any action to enforce their Redemption Notice with respect to certain existing defaults, and (ii) issuing any new demand for redemption of the Series A Note on the basis of certain additional defaults that the aggregate daily dollar trading volume of the Company's ordinary shares does not exceed $1,500,000, and that the volume weighted average price of the Company's ordinary shares on any two trading days during the thirty trading day period immediately preceding such date of determination fails to exceed $2.14.

(b) not to effect any conversions of the Series A Note or Alternate Conversions except for conversions or Alternate Conversions of the Series A Note and/or exercises of the Series A Warrant where the trading price of the Ordinary Shares is at least $2.50;

(c) not to effect any Installment Conversion, Installment Redemption, Disclosure Delay Payments or Event of Default Redemption prior to the Forbearance Expiration Date other than as permitted under this Agreement

(d) not to exercise the Series A Warrant during the Forbearance Period;

(e) to return the original share certificate representing the Pre-Delivered Shares to the Company for cancellation upon the Company's payment of the full Forbearance Redemption Amounts;

(f) to execute and deliver to the Company certain lock-up agreements with respect to the Pre-Delivered Shares, certain mutual release and to execute and deliver to the Company the Leak-Out Agreement;

In consideration for the above, the Company agreed to the followings:

(a) the Company shall (I) pay to each Investor $500,000 on or prior to December 16, 2019, and (II) commencing on January 24th 2020, redeem the Series A Notes for an aggregate redemption price of $10,939,410.21;

(b) If the Company fails to pay any New Installment Amount within 5 days of the applicable New Installment Date, the Investor may convert the applicable New Installment Amount as an Alternate Conversion and the Leak-Out Agreement being disregarded for such conversions;

(c) the Company agreed to adjust the exercise price of the Series A Warrant from $8.38 to $2.50; and

(d) the Company shall cause all restrictive legends on the Pre-Delivered Shares to be removed and delivery of un-legended Pre-Delivery Shares into the Investor's custodian's account pursuant to the DWAC instructions set forth therein.

(e) The Investors agreed not to make any hedge, swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Pre-Delivered Shares.

(f) Each Investor has agreed to not sell, dispose or otherwise transfer, directly or any Ordinary Shares issued if such sale exceed 20% of the daily composite trading volume of the Ordinary Shares.

Due to the Company's failure to obtain timely approval from State Administration of Foreign Exchange in People's Republic of China to redeem Series A Notes in cash as previously contemplated, each Investor entered into certain amended and restated leak-out agreement with the Company on March 3, 2020.

Each Investor has agreed to not sell, dispose or otherwise transfer, directly or indirectly any Series A Conversion Shares converted on any Trading Day, if such sale exceed 20% of the daily composite trading volume of the Ordinary.

If both the daily average composite trading volume of the Ordinary Share exceeds 1.5 million and the trading price of the Ordinary Share as of such time of determination exceeds the Closing Bid Price of the prior Trading Day, the Investor shall be permitted to convert up to an additional aggregate amount not to exceed the lesser of (i) 500,000 shares of Ordinary Share and (ii) 20% of the daily average composite trading volume of the Ordinary Shares.

The Outbreak of COVID-19

In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and other parts of the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a "Public Health Emergency of International Concern," and on March 11, 2020, the World Health Organization characterized the outbreak as a "pandemic." Governments in affected countries are imposing travel bans, quarantines and other emergency public health measures, which have caused material disruption to businesses globally resulting in an economic slowdown. These measures, though temporary in nature, may continue and increase depending on developments in the COVID-19's outbreak. Jiangsu Province, where we conduct a substantial part of our business, was materially impacted by the COVID-19. We have been following the recommendations of local health authorities to minimize exposure risk for our employees, including the temporary closures of our offices and production, and having employees work remotely. Our on-site work was not resumed until mid-March, 2020 upon the approval from the local government. Due to the extended lock-down and self-quarantine policies in China, we have experienced significant business disruption for the past two and a half months. Some of our employees in other provinces are still subject to the lock-down policy implemented by the local governments and could not return to work. Our production was resumed in mid-March, 2020, and was picking up slowly due to the material impacts of COVID-19 on our logistics. 

The extent to which the COVID-19 continues to impact the Company's business, sales, and results of operations will depend on future developments, which are highly uncertain and will include emerging information concerning the severity of the coronavirus and the actions taken by governments and private businesses to attempt to contain the coronavirus, but is likely to result in a material impact on our business operations at least for the near term.

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Accounts Receivable, Net

6 Months Ended

Sep. 30, 2019

Receivables [Abstract]

Accounts receivable, net

Note 3 – Accounts receivable, net

Accounts receivable, net consisted of the following:

	September 30,			March 31,
	2019			2019
	(unaudited)
Accounts receivable	$	4,630,953		$	4,247,476
Less:  Allowance for doubtful accounts		(62,830	)		(66,917	)
Total accounts and notes receivable, net	$	4,568,123		$	4,180,559

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Subsequent event (Details)			6 Months Ended
	Dec. 13, 2019 USD ($)	Jul. 29, 2019 USD ($)	Sep. 30, 2019 USD ($) $ / shares
Subsequent event (Textual)
Aggregate the entire principal amount		$ 14,318,463
Investors, description			(a) to forbear from (i) taking any action to enforce their Redemption Notice with respect to certain existing defaults, and (ii) issuing any new demand for redemption of the Series A Note on the basis of certain additional defaults that the aggregate daily dollar trading volume of the Company's ordinary shares does not exceed $1,500,000, and that the volume weighted average price of the Company's ordinary shares on any two trading days during the thirty trading day period immediately preceding such date of determination fails to exceed $2.14.
Subsequent Event, Description			(a) the Company shall (I) pay to each Investor $500,000 on or prior to December 16, 2019, and (II) commencing on January 24th 2020, redeem the Series A Notes for an aggregate redemption price of $10,939,410.21.
Trading volume of ordinary Shares			0.20
Traing price of the ordinary shares			$ 1,500,000
Common Stock [Member]
Subsequent event (Textual)
Subsequent Event, Description			(i) 500,000 shares of Ordinary Share and (ii) 20% of the daily average composite trading volume of the Ordinary Shares.
Forecast [Member]
Subsequent event (Textual)
Aggregate redemption price of installments	$ 10,939,410
Series A warrant [Member]
Subsequent event (Textual)
Purchase of warrat		$ 1,208,384
Ordinary share price | $ / shares			$ 2.50
Series A warrant [Member] | Maximum [Member]
Subsequent event (Textual)
Ordinary share price | $ / shares			8.38
Series A warrant [Member] | Minimum [Member]
Subsequent event (Textual)
Ordinary share price | $ / shares			$ 2.50

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Loan Receivable (Details) - USD ($)	Sep. 30, 2019	Mar. 31, 2019
Receivables [Abstract]
Loan receivable	$ 1,500,000

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Intangibles, Net (Details) - USD ($)	6 Months Ended
	Sep. 30, 2019	Mar. 31, 2019
Less: accumulated amortization	$ (22,646)	$ (19,883)
Intangible assets, net	53,386	61,096
Software [Member]
Intangible assets, gross	$ 33,452	35,629
Useful life years	10 years
Trademark [Member]
Intangible assets, gross	$ 42,580	$ 45,350
Useful life years	10 years

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Related Party Transactions and Balances (Details)	6 Months Ended
	Sep. 30, 2019
Jianping Zhou [Member]
Nature of relationships with related parties	Father of major shareholders of the Company and two of Taizhou Suxuantang shareholders, controlling shareholder of Taizhou Suxuantang from its inception to May 8, 2017
Jianbin Zhou [Member]
Nature of relationships with related parties	Father of major shareholders of the Company and one of Taizhou Suxuantang shareholders
Taizhou Jiutian Pharmaceutical Co. Ltd. [Member]
Nature of relationships with related parties	An entity controlled by Jianping Zhou
Taizhou Su Xuan Tang Chinese Medicine Co., Ltd. [Member]
Nature of relationships with related parties	An entity controlled by Jianping Zhou
Jiangsu Health Pharmaceutical Investment Co., Ltd. [Member]
Nature of relationships with related parties	An entity controlled by Jianping Zhou
Taizhou Su Xuan Tang Chinese Medicine Clinic [Member]
Nature of relationships with related parties	An entity controlled by Jianping Zhou
Taizhou Su Xuan Tang Chinese hospital Co., Ltd [Member]
Nature of relationships with related parties	An entity controlled by Jianping Zhou

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Convertible Notes (Details 2)	6 Months Ended
	Sep. 30, 2019 USD ($)
Debt Disclosure [Abstract]
Amortization, Issuance costs and debt discount	$ 1,672,708
Amortization, Convertible note interest	470,823
Amortization, Total	$ 2,143,531

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Intangibles, Net (Tables)

6 Months Ended

Sep. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of intangible net

	Useful	September 30,			March 31,
	life	2019			2019
		(unaudited)
Trademark	10	$	42,580		$	45,350
Software	10		33,452			35,629
Less: accumulated amortization			(22,646	)		(19,883	)
		$	53,386		$	61,096

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Accrued Expenses and Other Liabilities (Tables)

6 Months Ended

Sep. 30, 2019

Payables and Accruals [Abstract]

Schedule of accrued expenses and other liabilities

	September 30,		March 31,
	2019		2019
	(unaudited)
Accrued payroll and welfare	$	175,745	$	36,010
Other payable for leasehold improvements		-		119,535
Accrued professional service expenses		-		187,444
Staff reimbursement		170,246		183,857
Interest payable		183,012		-
Other current liabilities		172,873		164,676
	$	701,876	$	691,522

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Accrued Expenses and Other Liabilities

6 Months Ended

Sep. 30, 2019

Payables and Accruals [Abstract]

Accrued expenses and other liabilities

Note 13 – Accrued expenses and other liabilities

	September 30,		March 31,
	2019		2019
	(unaudited)
Accrued payroll and welfare	$	175,745	$	36,010
Other payable for leasehold improvements		-		119,535
Accrued professional service expenses		-		187,444
Staff reimbursement		170,246		183,857
Interest payable		183,012		-
Other current liabilities		172,873		164,676
	$	701,876	$	691,522

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Intangibles, Net

6 Months Ended

Sep. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Intangibles, net

Note 9 – Intangibles, net

	Useful	September 30,			March 31,
	life	2019			2019
		(unaudited)
Trademark	10	$	42,580		$	45,350
Software	10		33,452			35,629
Less: accumulated amortization			(22,646	)		(19,883	)
		$	53,386		$	61,096

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Loan Receivable

6 Months Ended

Sep. 30, 2019

Receivables [Abstract]

Loan receivable

Note 5 – Loan receivable

	September 30,		March 31,
	2019		2019
	(unaudited)
Loan receivable	$	1,500,000	$	-

Short-term loan of $1.5 million at 5.4% annual interest rate was made to RH Holdings Management (HK) Limited from June 1, 2019, to May 31, 2020.