On January 14, China SXTC Pharmacuticals Inc. (SXTC) announced a proposed underwritten public offering. Additionally, the company also announced details of its advanced TCMP products and the growth of Luxuejin. Consequent to the news, shares of SXTC plunged further in the pre-market on Tuesday.
During regular trading, the stock fluctuated between $0.7899 and $0.4664 on Friday. SXTC closed the session at $0.5375 with a small loss of 0.44%. Following the announcement, the stock fell by a further 42.33% in the pre-market at $0.31.
The traditional Chinese medicine holding company, China SXT Pharmacuticals Inc. has a market capitalization of $8.34 million. Currently, 15.53 million of the company shares are outstanding in the market.
SXTC’s Public Offering
As per Friday’s announcement, the company plans to offer its ordinary shares and pre-funded warrants for buying ordinary shares, in an underwritten public offering. Moreover, the per-share price of the pre-funded warrants will be the same as the ordinary shares, less $0.0001 per share exercise price of each pre-funded warrant. Furthermore, the base offering is expected to be up to $3.4 million approximately. Also, the company intends to award a 45-day overallotment option for buying 15% additional ordinary shares and/or pre-funded warrants.
In addition, the size, actual terms, and completion date of the offering were not disclosed in the announcement.
The sole book-running manager for the offering is Aegis Capital Corp.
New Advanced TCMP Products
As announced on Friday, the advanced TCMP products are Kuihuapan After-Soaking-Oral TCMP and Zhudanfen Directly-Oral TCMP products. Both the products are produced according to the processing specifications of Chinese Pharmacopoeia, 2020 Edition. The details of these products are as under:
Functions: clearing heat, calming the liver, dredging collaterals, and relieving pain.
Indications: dizziness, tinnitus, joint pain, hyperuricemia, gout, hypertension, and other symptoms.
Functions: clearing heat and moistening dryness, relieving cough and asthma, and detoxifying.
Indications: sudden cough, asthma, fever, thirst, red eyes, throat obstruction, jaundice, diarrhea, dysentery, constipation, sores, carbuncle, swelling, and poison.
SXTC expects the annual output of both these products to reach 300,000 bottles and sales of RMB 5M approx. during the year ending March 31, 2023.
Due to the GMP compliance inspection for SXTC’s new lyophilization production facilities in June 2021, the production cycle was delayed. Consequently, the production capacity also decreased. Following the completion of the inspection, the company had 12 batches of Luxuejin Directly-Oral TCMP products produced by lyophilization, as of December 31, 2021. The expected sales from this are over RMB 3M during the year ending on March 31, 2022.