China SXT Pharmaceuticals Raises $10 Million Selling Shares at Significant Discount

2026-01-10 companies

Taizhou, Friday, 9 January 2026.
China SXT secures $10 million by selling shares at just $0.15 to a single investor, a move following their strategic AI pivot that triggered significant market volatility today.

Capital Injection at a Discount

China SXT Pharmaceuticals Inc. (NASDAQ: SXTC) has entered into a definitive agreement with a single institutional investor to raise approximately $10 million in gross proceeds through a registered direct offering [1][3]. Announced today, January 9, 2026, the transaction involves the sale of over 66 million shares at a purchase price of $0.15 per share [1][5]. This pricing strategy represents a sharp discount relative to the company’s recent market valuation, a move that has triggered a significant reaction in the equity markets [4][7].

Transaction Details and Timeline

Under the specific terms of the agreement, the Taizhou-based pharmaceutical company will issue exactly 66,666,666 Class A ordinary shares [1][5]. The deal structure also provides an option for pre-funded warrants in lieu of shares, which carry a nominal exercise price of $0.001 per share [3][5]. Univest Securities, LLC is acting as the sole placement agent for this offering, which is scheduled to close on or about January 12, 2026, subject to customary closing conditions [1][3]. The securities are being offered pursuant to a shelf registration statement on Form F-3 that became effective on December 1, 2025 [1][3].

Market Volatility and Valuation Pressures

The offering price of $0.15 per share stands in stark contrast to the company’s recent trading performance. Prior to the announcement, the stock had been trading at approximately $0.36, indicating that the capital was secured at a discount of roughly 58.333% [4]. The market’s response to this dilution and pricing was severe; following the announcement of the direct offering today, the stock reportedly declined by 77.60% [7]. This volatility compounds the market movement from the previous day, January 8, when the stock dropped 37.50% following a separate strategic announcement [6].

Strategic Context: The AI Pivot

This financing event follows immediately after a major strategic shift for the company. On January 8, 2026, China SXT unveiled a “Strategic Artificial Intelligence Insights Initiative” designed to integrate AI analytics into its Traditional Chinese Medicine (TCM) product planning and research and development [6]. The company, which specializes in the manufacturing and sales of TCM pieces, intends to develop offline “AI Clinics” across China to provide personalized health screenings and product recommendations [6]. While this initiative aims to modernize their operational model, the immediate execution of a highly dilutive offering suggests that the company is aggressively prioritizing liquidity to support these new technological ventures [1][6].

Summary

China SXT Pharmaceuticals has moved quickly to secure $10 million in working capital, albeit at the cost of significant equity dilution and a steep discount to its prior market value [4][7]. The capital raise serves as a financial bridge as the company attempts to pivot from a traditional pharmaceutical manufacturer to a technology-integrated health provider through its new AI initiatives [6]. Investors are now watching to see if the influx of cash can effectively drive the development of the proposed AI Clinics and stabilize the company’s valuation in the long term [6][7].

Sources

Capital Markets Pharmaceuticals