China SXT Pharmaceuticals Inc. has announced the closing of its initial public offering totaling $10.2 million and is expected to float its shares on the Nasdaq Capital Market on Friday afternoon under the symbol "SXTC.”
The Taizhou-based company, which produces Chinese herbal medicine, said in a statement today that the closing of its IPO deal was finalized Thursday, as it issued more than 2.5 million of its ordinary shares, the minimum it expected to offer, at a price of $4 apiece.
Boustead Securities LLC acted as the sole underwriter on the offering.
SXT said it intends to use the proceeds of its offering to expand its manufacturing facility and recruit additional staff, as well as for working capital and the research and development of new drugs.
The company said the U.S. Securities and Exchange Commission declared its Form F-1 effective in September. According to its previous statement, SXT expected to ring the bell on Wall Street back in October.
Founded in 2005, the company is headed by Feng Zhou, who is among four shareholders holding a combined 51.5 percent of China SXT's shares.
In its filing, SXT reported revenue of $7 million for the year through March 2018, up 44 percent year-over-year. Net income reached $1.2 million, same as for the preceding year. The company attributed its increased profitability to its shift from low-margin regular products to higher-margin advanced goods.
SXT sells traditional medicine products primarily to hospitals and drug stores in nine Chinese provinces. The company said it planned to expand its distribution network and turn its brand “Suxuantang” into a national brand.
Unlike other Chinese herbal medicines, SXT's products do not require a decoction process, which increases their usability. The company, which operates as Jiangsu Su Xuan Tang Pharmaceutical Co. Ltd., said its Suxuantang brand name dates back more than 270 years.