United
States
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): February 12, 2016
CHINA
JO-JO DRUGSTORES, INC.
(Exact
name of Registrant as specified in charter)
Nevada |
|
001-34711 |
|
98-0557852 |
(State or other jurisdiction
of Incorporation) |
|
(Commission File
No.) |
|
(IRS Employer
Identification No.) |
1st
Floor, Yuzheng Plaza, No. 76, Yuhuangshan Road
Hangzhou,
Zhejiang Province, People’s Republic of China
(Address
of principal executive offices) (Zip Code)
Registrant's
telephone number, including area code: +86 (571) 88077078
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities Act (17CFR230.425)
☐
Soliciting material pursuant to Rule14a-12 under the Exchange Act (17CFR240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17CFR240.13e-4(c))
Item
2.02. Results of Operations and Financial Condition.
On
February 12, 2016, China Jo-Jo Drugstores, Inc. (the “Company”) issued a press release announcing certain financial
results for the third quarter ended December 31, 2015. A copy of the press release is attached hereto as Exhibit 99.1.
This
information under this Item 2.02 and the Press Release attached to this Form 8-K as Exhibit 99.1 shall be deemed to be “furnished”
and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), or otherwise subject to the liabilities under that section and shall not be deemed incorporated by
reference in any filing under the Exchange Act or the Securities Act of 1933, as amended.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits.
The
following is filed as an exhibit to this report:
Exhibit
No. |
|
Description |
|
|
|
99.1 |
|
Press Release, dated February 12, 2016. |
SIGNATURES
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 JO-JO DRUGSTORES, INC. |
|
|
|
Date: February 12, 2016 |
By: |
/s/
Lei Liu |
|
Name: |
Lei Liu |
|
Title: |
Chief Executive Officer |
3
Exhibit 99.1
China
Jo-Jo Drugstores Reports Third Quarter Fiscal Year 2016 Financial Results
-Q3’16
Revenue up 15.9% y-o-y;
-Total
online pharmacy revenues continue to ramp growing 96.7% y-o-y;
-Total
online pharmacy gross profit grew 194% y-o-y
-Official
branded online website sales grew 535.3% y-o-y
HANGZHOU,
China, February 12, 2016 /PRNewswire/ -- China Jo-Jo Drugstores, Inc. (NASDAQ CM: CJJD) (the "Company" or "China
Jo-Jo"), a leading China-based pharmacy with retail, wholesale and online distribution of pharmaceutical and health care
products, today announced financial results for the third-quarter ended December 31, 2015.
Third
Quarter FY 2016 Highlights vs. the Comparable Period
| ● | Revenues
roughly totaled $24.7 million up 15.9%, consisting of segmental revenue: |
| o | Revenue
from Retail Drugstores roughly totaled $12.9 million, down 2.7% and represents
52.3% of total revenues as compared to 62.3% in the prior year; |
| o | Revenue
from Online Pharmacy roughly totaled $8.6 million, an increase of 96.7% and represents
35.0% of revenues as compared to 20.6% in the prior year; |
| o | Revenues
from the Wholesale Business roughly totaled $3.1 million, a decrease of 13.8%
and represents 12.7% of revenues as compared to 17.1% in the prior year. |
| ● | Gross
profit of roughly $4.8 million, an increase of 52.3% as compared to the prior year |
| o | Retail
drugstore gross profit increased 20.3% to roughly $2.8 million as compared to the prior
year; |
| o | Online
pharmacy gross profit increased 194.1% to roughly $1.8 million as compared to the prior
year. |
| ● | Gross
margin of 19.6% for the third quarter of fiscal 2016 as compared to 14.9% in the prior
year |
| o | Retail
drugstore gross margin increased to 21.6% as compared to 17.5% in the prior year; |
| o | Online
pharmacy gross margin increased to 21.3% as compared to 14.2% in the prior year. |
| ● | Net
loss of $0.62 million or ($0.04) per fully diluted share, compared with net income of
$0.13 million or $0.01 per fully diluted share in the prior year. |
| ● | Non-GAAP*
net loss of $0.38 million or ($0.02) per fully diluted share, compared with Non-GAAP
net income of $0.65 million or $0.04 per fully diluted share in the prior year. |
9
Months FY 2016 Financial Highlights vs. the Comparable Period
| ● | First
nine months FY 2016 revenue totaled $68.6 million up 22.0% from $56.2 million in the
prior year; |
| ● | Gross
profit roughly totaled $13.2 million up 56.1% from $8.5 million in the prior year; |
| ● | Gross
margin of 19.2% as compared to 15.0% in the prior year; |
| ● | Net
loss of $0.36 million or ($0.02) per fully diluted share, as compared with a net loss
of $0..26 million or ($0.02) per fully diluted share in the prior year; |
| ● | Non-GAAP*
net loss of $0.01 million or ($0.00) per fully diluted share, compared with Non-GAAP
net income of $0.34 million or $0.02 per fully diluted share in the prior year. |
*We
make reference to certain non-GAAP financial measures, consisting of non-cash adjustments to net income which include, share based
compensation and changes in the value of derivatives. Management believes that such adjusted financial results are useful to investors
in evaluating our operating performance because it presents a meaningful measure of corporate performance. See the non-GAAP reconciliation
table below. Any non-GAAP measures should not be considered as a substitute for, and should only be read in conjunction with measures
of financial performance prepared in accordance with GAAP.
Reconciliation
to non-GAAP Financial Measures
| |
Three Months Ended | | |
Nine months Ended | |
| |
December 31, | | |
December 31, | |
| |
2015 | | |
2014 | | |
2015 | | |
2014 | |
Net Income (Loss) | |
$ | (617,529 | ) | |
$ | 127,525 | | |
$ | (355,743 | ) | |
$ | (257,324 | ) |
Share based compensation expense | |
| 248,066 | | |
| 397,665 | | |
| 514,321 | | |
| 543,175 | |
Change in fair value of derivative liabilities | |
| (15,444 | ) | |
| 127,432 | | |
| (173,510 | ) | |
| 51,074 | |
Adjusted net income (loss) | |
| (384,907 | ) | |
| 652,622 | | |
| (14,932 | ) | |
| 336,925 | |
Adjusted net income (loss) per share - diluted | |
$ | (0.02 | ) | |
$ | 0.04 | | |
$ | (0.00 | ) | |
$ | 0.02 | |
Management
Comments
Mr.
Lei Liu, Chairman and CEO commented, “We are pleased with China Jo-Jo’s sales growth both in online and retail pharmacy
sales. We are seeing improvements in gross margin from increased volume in our online business as our revenue mix continues to
shift to our fast growing online business. From a sequential perspective we are expecting a strong quarter to end the fiscal year,
as efforts to monetize the growth opportunity in China’s online pharmacy space continues. Our focus on exploring customers’
needs in both offline and online platforms will help in maximizing the ways for which we leverage our cost basis across the businesses.
Mr.
Liu continued, “While the Company implements operating strategies in line with China’s secular consumer growth trends,
China Jo-Jo draws closer to the tipping point for continuous GAAP operating profitability, and a fiscal run rate of over $100
million in annual organic revenues. The investments and efforts in building critical mass to service China’s consumer needs
in the pharmacy space is taking shape, creating new opportunities to diversify our revenue base while drawing on and retaining
new customers. Closer collaborations with several large local pharmaceutical vendors are also providing cost advantages while
enhancing China Jo-Jo’s brand reputation through the selling of trusted, premium branded products.
“Synergies
found in our ecosystem, are providing compelling solutions in answer to China’s relentless call for healthcare reform including:
ending hospital domination in prescription sales, broader access to pharmacy products and healthcare services including access
to supplemental insurance benefits that cover social insurance shortfalls. On the consumer side, China Jo-Jo is utilizing its
e-service platforms to drive segment revenue while promoting increased foot traffic to retail locations across Zhejiang province
in a concerted effort to enhance same store sales. The end result is a steady expansion in gross profit from our retail drugstores
and a step change in gross profit from our online pharmacy segment due to the Company’s strategic initiatives to grow e-pharmacy.
China Jo-Jo’s customer loyalty program continues to expand and has grown to more than 2 million customers, as we seek innovative
ways to provide pharmacy products and services that positively affect China Jo-Jo’s bottom line,” concluded Mr. Liu.
Third
Quarter Financial Summary
Revenue
increased by $3,388,007 or 15.9% for the three months ended December 31, 2015, as compared to the prior year, as a result
of the rapid expansion of our online pharmacy business, partially offset by decline in our wholesale business.
Gross
profit increased by $1,665,300 or 52.3% as compared to the prior year as a result of increased gross margin of retail and
online drugstores and an increase in online pharmacy sales. At the same time, gross margin increased from 14.9% to
19.6% due to higher retail profit margins and better product mix.
Sales
and marketing expenses increased by $1,102,453
or 50.5% as compared to the prior year. The increase is attributable to increases in labor cost, service fees incurred from e-commerce
platforms and commercial health insurance providers which direct insured sales to our own official website. As a result, such
expenses as a percentage of our revenue increased to 13.3%, from 10.2% as compared to the same year ago period. We expect future
sales and marketing expenses to grow as our online business continues to expand.
General
and administrative expense increased by $1,246,335
or 200.3% as compared to the prior year. Such expenses as a percentage of revenue increased to 7.6% from 2.9% for the prior year.
General and administrative expenses reflects variance of accounts receivable and advances to vendors allowance as stated in the
Company’s 10Q, including a reversal of approximately $1.4 million allowance in the three months ended December 31, 2014.
Excluding such an effect, general and administrative expense actually decreased.
Net
loss from operations was $307,752, as compared
to income from operations of $375,736 in the year ago period. Diluted loss per share
is ($0.04), as compared to 0.01 in the prior year.
As
of December 31, 2015, we had cash of approximately $4,339,272. The
Company’s total current assets as of December 31, 2015, were $44,473,871 and total current liabilities
were $40,768,247, which resulted in a positive net working capital of $3,705,624.
9
Months Segmental Business Update
Retail
drugstore sales accounted for approximately 55.7% of total revenue for the nine months ended December 31, 2015, increased
by $1,913,789, or 5.3%, to $38,202,495. Same-store sales decreased by approximately $758,296, or 2.2%, while new stores contributed
approximately $2,377,789 in revenue in the nine months ended December 31, 2015. Other growth in sales revenue is attributed to
growth in clinic sales and China Jo-Jo branded nutritional supplement sales. In recent quarter, same store sales growth has been
impeded due to due to government budget control. However, same store sales growth is expected to grow due to increasing demand
for healthcare products over time. The Company continues to adapt its operating strategies to maximize same store sales growth
including: product adaptability to community demand; mobile device product search; close monitoring of chronicle disease customers,
and cooperation with certain large reputable vendors to promote sales of their brand name products. One retail location was closed
in the period as it was the last remaining store without government insurance coverage in Hangzhou. The Company hopes to open
or acquire news stores over time.
Online
pharmacy sales increased by approximately $11,252,275, or 113.5% for the nine months ended December 31, 2015, as compared
to the prior year. For the nine months period, cooperation with business-to-consumer online vendors have expanded to include Taobao,
JD and www.yhd.com, our product details are listed on their online platforms, directing customers back to our website.
China Jo-Jo’s own official website sales in the nine months ended December 31, 2015 has increased by 456.9% as compared
to the prior year. The Company continues to benefit from cooperation with large insurance companies such as The People’s
Insurance Company (Group) of China. The expansion of commercial health insurance in China continues to expand as a supplementary
insurance as often times China’s social health insurance does not provide complete insurance coverage to consumers.
Wholesale
revenue decreased by $792,436 or 7.9% primarily
as a result of discontinuing volume-driven sales strategy.
CHINA
JO-JO DRUGSTORES, INC AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| |
December 31, | | |
March 31, | |
| |
2015 | | |
2015 | |
ASSETS | |
| | |
| |
CURRENT ASSETS | |
| | |
| |
Cash | |
$ | 4,339,272 | | |
$ | 4,023,581 | |
Financial assets available for sale | |
| - | | |
| 1,307,200 | |
Restricted cash | |
| 12,743,153 | | |
| 8,992,101 | |
Notes receivable | |
| 35,443 | | |
| 138,952 | |
Trade accounts receivable, net | |
| 8,751,355 | | |
| 9,237,743 | |
Inventories | |
| 10,261,025 | | |
| 10,538,591 | |
Other receivables, net | |
| 1,441,827 | | |
| 1,130,264 | |
Advances to suppliers, net | |
| 5,479,954 | | |
| 4,717,352 | |
Other current assets | |
| 1,421,842 | | |
| 2,200,838 | |
Total current assets | |
| 44,473,871 | | |
| 42,286,622 | |
| |
| | | |
| | |
PROPERTY AND EQUIPMENT, net | |
| 5,719,417 | | |
| 7,056,781 | |
| |
| | | |
| | |
OTHER ASSETS | |
| | | |
| | |
Long-term investment | |
| 107,870 | | |
| - | |
Farmland assets | |
| 1,683,586 | | |
| 1,704,359 | |
Long term deposits | |
| 2,436,953 | | |
| 2,584,025 | |
Other noncurrent assets | |
| 2,579,146 | | |
| 2,734,798 | |
Intangible assets, net | |
| 2,918,279 | | |
| 3,142,003 | |
Total other assets | |
| 9,725,834 | | |
| 10,165,185 | |
Total assets | |
$ | 59,919,122 | | |
$ | 59,508,588 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |
| | | |
| | |
CURRENT LIABILITIES | |
| | | |
| | |
Short-term loan payable | |
$ | - | | |
$ | 32,680 | |
Accounts payable, trade | |
| 14,919,756 | | |
| 15,915,915 | |
Notes payable | |
| 17,068,740 | | |
| 15,752,969 | |
Other payables | |
| 2,812,922 | | |
| 2,931,869 | |
Other payables - related parties | |
| 2,489,592 | | |
| 2,729,740 | |
Customer deposits | |
| 2,440,184 | | |
| 3,759,050 | |
Taxes payable | |
| 482,234 | | |
| 328,111 | |
Accrued liabilities | |
| 554,819 | | |
| 509,537 | |
Total current liabilities | |
| 40,768,247 | | |
| 41,959,871 | |
| |
| | | |
| | |
Purchase option and warrant liability | |
| 141,817 | | |
| 315,327 | |
Total liabilities | |
| 40,910,064 | | |
| 42,275,198 | |
| |
| | | |
| | |
COMMITMENTS AND CONTINGENCIES | |
| | | |
| | |
| |
| | | |
| | |
STOCKHOLDERS' EQUITY | |
| | | |
| | |
Preferred stock; $0.001 par value; 10,000,000 shares authorized; nil issued and outstanding as of December 31, 2015 and March 31, 2015 | |
| - | | |
| - | |
Common stock; $0.001 par value; 250,000,000 shares authorized; 17,735,504 and 15,650,504 shares issued and outstanding as of December 31, 2015 and March 31, 2015 | |
| 17,736 | | |
| 15,651 | |
Additional paid-in capital | |
| 22,512,969 | | |
| 19,301,233 | |
Statutory reserves | |
| 1,309,109 | | |
| 1,309,109 | |
Accumulated deficit | |
| (7,759,951 | ) | |
| (7,404,210 | ) |
Accumulated other comprehensive income | |
| 2,929,195 | | |
| 3,972,543 | |
Total stockholders' equity | |
| 19,009,058 | | |
| 17,194,326 | |
Noncontrolling interests | |
| - | | |
| 39,064 | |
Total equity | |
| 19,009,058 | | |
| 17,233,390 | |
Total liabilities and stockholders' equity | |
$ | 60,485,334 | | |
$ | 59,508,588 | |
CHINA
JO-JO DRUGSTORES, INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
| |
For the three months ended December 31, | | |
For the nine months ended December 31, | |
| |
2015 | | |
2014 | | |
2015 | | |
2014 | |
REVENUES, NET | |
$ | 24,708,046 | | |
$ | 21,320,039 | | |
$ | 68,596,964 | | |
$ | 56,223,336 | |
| |
| | | |
| | | |
| | | |
| | |
COST OF GOODS SOLD | |
| 19,860,713 | | |
| 18,138,006 | | |
| 55,396,941 | | |
| 47,765,427 | |
| |
| | | |
| | | |
| | | |
| | |
GROSS PROFIT | |
| 4,847,333 | | |
| 3,182,033 | | |
| 13,200,023 | | |
| 8,457,909 | |
| |
| | | |
| | | |
| | | |
| | |
SELLING EXPENSES | |
| 3,286,637 | | |
| 2,184,184 | | |
| 9,801,761 | | |
| 5,886,541 | |
GENERAL AND ADMINISTRATIVE EXPENSES | |
| 1,868,448 | | |
| 622,113 | | |
| 3,628,520 | | |
| 2,449,489 | |
TOTAL OPERATING EXPENSES | |
| 5,155,085 | | |
| 2,806,297 | | |
| 13,430,281 | | |
| 8,336,030 | |
| |
| | | |
| | | |
| | | |
| | |
(LOSS) INCOME FROM OPERATIONS | |
| (307,752 | ) | |
| 375,736 | | |
| (230,258 | ) | |
| 121,879 | |
| |
| | | |
| | | |
| | | |
| | |
OTHER EXPENSES, NET | |
| (290,122 | ) | |
| (106,773 | ) | |
| (219,771 | ) | |
| (275,301 | ) |
CHANGE IN FAIR VALUE OF DERIVATIVE LIABILITIES | |
| 15,444 | | |
| (127,431 | ) | |
| 173,510 | | |
| (51,074 | ) |
| |
| | | |
| | | |
| | | |
| | |
INCOME (LOSS) BEFORE INCOME TAXES | |
| (582,430 | ) | |
| 141,532 | | |
| (276,519 | ) | |
| (204,496 | ) |
| |
| | | |
| | | |
| | | |
| | |
PROVISION FOR INCOME TAXES | |
| 35,099 | | |
| 14,007 | | |
| 79,224 | | |
| 52,828 | |
| |
| | | |
| | | |
| | | |
| | |
NET INCOME (LOSS) | |
| (617,529 | ) | |
| 127,525 | | |
| (355,743 | ) | |
| (257,324 | ) |
| |
| | | |
| | | |
| | | |
| | |
NET (LOSS) INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST | |
| - | | |
| (987 | ) | |
| - | | |
| 932 | |
| |
| | | |
| | | |
| | | |
| | |
NET INCOME (LOSS) ATTRIBUTABLE TO CHINA JO-JO DRUGSTORES, INC. | |
| (617,529 | ) | |
| 126,538 | | |
| (355,743 | ) | |
| (256,392 | ) |
| |
| | | |
| | | |
| | | |
| | |
OTHER COMPREHENSIVE (LOSS) INCOME | |
| | | |
| | | |
| | | |
| | |
Foreign currency translation adjustments | |
| (268,795 | ) | |
| 52,740 | | |
| (1,043,348 | ) | |
| 111,200 | |
| |
| | | |
| | | |
| | | |
| | |
COMPREHENSIVE (LOSS) INCOME | |
$ | (886,324 | ) | |
$ | 179,278 | | |
$ | (1,399,091 | ) | |
$ | (145,192 | ) |
| |
| | | |
| | | |
| | | |
| | |
WEIGHTED AVERAGE NUMBER OF SHARES: | |
| | | |
| | | |
| | | |
| | |
Basic | |
| 17,180,830 | | |
| 15,199,092 | | |
| 16,459,195 | | |
| 14,867,218 | |
Diluted | |
| 17,180,830 | | |
| 15,596,554 | | |
| 16,459,195 | | |
| 14,867,218 | |
| |
| | | |
| | | |
| | | |
| | |
INCOME (LOSS) PER SHARES: | |
| | | |
| | | |
| | | |
| | |
Basic | |
$ | (0.04 | ) | |
$ | 0.01 | | |
$ | (0.02 | ) | |
$ | (0.02 | ) |
Diluted | |
$ | (0.04 | ) | |
$ | 0.01 | | |
$ | (0.02 | ) | |
$ | (0.02 | ) |
CHINA
JO-JO DRUGSTORES, INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| |
Nine months ended
December 31, | |
| |
2015 | | |
2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |
| | |
| |
Net loss | |
$ | (355,743 | ) | |
$ | (257,324 | ) |
Adjustments to reconcile
net (loss) income to net cash provided by (used in) operating activities: | |
| | | |
| | |
Depreciation and amortization | |
| 1,163,994 | | |
| 1,240,323 | |
Stock-based compensation | |
| 520,953 | | |
| 527,357 | |
Bad debt provision | |
| (1,369,786 | ) | |
| (3,126,039 | ) |
Inventory reserve | |
| - | | |
| 277,603 | |
Change in fair value
of purchase option derivative liability | |
| (173,510 | ) | |
| 51,074 | |
Change in operating assets: | |
| | | |
| | |
Accounts receivable,
trade | |
| 243,666 | | |
| 1,566,629 | |
Notes receivable | |
| 99,199 | | |
| (108,096 | ) |
Inventories | |
| (413,472 | ) | |
| (2,976,220 | ) |
Other receivables | |
| (142,734 | ) | |
| (619,695 | ) |
Advances to suppliers | |
| (413,238 | ) | |
| 1,916,591 | |
Other current assets | |
| 678,339 | | |
| 55,012 | |
Long term deposit | |
| - | | |
| 220,146 | |
Other noncurrent assets | |
| - | | |
| 280,399 | |
Change in operating liabilities: | |
| | | |
| | |
Accounts payable, trade | |
| (93,695 | ) | |
| (1,236,808 | ) |
Other payables and accrued
liabilities | |
| 277,298 | | |
| 390,535 | |
Customer deposits | |
| (1,146,504 | ) | |
| 494,570 | |
Taxes
payable | |
| 205,734 | | |
| 75,296 | |
Net
cash used in operating activities | |
| (919,499 | ) | |
| (1,228,647 | ) |
| |
| | | |
| | |
CASH FLOWS FROM INVESTING
ACTIVITIES: | |
| | | |
| | |
Purchase of equipment | |
| (171,314 | ) | |
| (898,522 | ) |
Decrease in Financial
assets available for sale | |
| 1,279,200 | | |
| - | |
Acquisition of business,
net | |
| - | | |
| (936,288 | ) |
Investment in a joint
venture | |
| (111,930 | ) | |
| - | |
Payments on construction-in-progress | |
| - | | |
| (96,636 | ) |
Additions
to leasehold improvements | |
| - | | |
| (189,143 | ) |
Net
cash provided by (used in) investing activities | |
| 995,956 | | |
| (2,120,589 | ) |
| |
| | | |
| | |
CASH FLOWS FROM FINANCING
ACTIVITIES: | |
| | | |
| | |
Proceeds from short-term
bank loan | |
| 23,115 | | |
| 32,510 | |
Repayment of short-term
bank loan | |
| (55,095 | ) | |
| (162,550 | ) |
Repayment of third
parties loan | |
| - | | |
| (79,116 | ) |
Change in restricted
cash | |
| (4,423,287 | ) | |
| (6,848,423 | ) |
Repayments of notes payable | |
| (15,415,543 | ) | |
| (14,132,390 | ) |
Proceeds from notes payable | |
| 17,711,172 | | |
| 21,206,663 | |
(Repayment of) Proceeds
from other payables-related parties | |
| (179,934 | ) | |
| 529,115 | |
Proceeds
from equity financing | |
| 2,699,500 | | |
| - | |
Net
cash provided by financing activities | |
| 359,928 | | |
| 545,809 | |
| |
| | | |
| | |
EFFECT
OF EXCHANGE RATE ON CASH | |
| (120,694 | ) | |
| 92,543 | |
INCREASE IN CASH | |
| 315,691 | | |
| (2,710,884 | ) |
CASH,
beginning of period | |
| 4,023,581 | | |
| 4,445,276 | |
CASH,
end of period | |
$ | 4,339,272 | | |
$ | 1,734,392 | |
| |
| | | |
| | |
SUPPLEMENTAL DISCLOSURE
OF CASH FLOW INFORMATION: | |
| | | |
| | |
Cash
paid for interest | |
$ | 151,258 | | |
$ | 4,621 | |
Cash
paid for income taxes | |
$ | 48,424 | | |
$ | 59,755 | |
Issuance
of common stocks in exchange of debts | |
$ | - | | |
$ | 941,613 | |
Non-cash financing activities: | |
| | | |
| | |
Issuance
of stock purchase options to an investment bank | |
$ | 147,728 | | |
$ | - | |
Use
of non-GAAP financial measures
To
supplement China Jo-Jo's consolidated financial results presented in accordance with GAAP, China Jo-Jo uses the following measures
defined as non-GAAP financial measures by the SEC: net income (loss) excluding share-based compensation expenses and change in
fair value of derivative liabilities, and diluted net income (loss) per share excluding share-based compensation expenses and
change in the fair value of derivatives liabilities. The presentation of these non-GAAP financial measures is not intended to
be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.
China
Jo-Jo believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and
liquidity by excluding share-based compensation expenses and change in fair value of derivative liabilities that may not be indicative
of its operating performance from a cash perspective. China Jo-Jo believes that both management and investors benefit from referring
to these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP
financial measures also facilitate management's internal comparisons to China Jo-Jo's historical performance and liquidity. China
Jo-Jo computes its non-GAAP financial measures using the same consistent method from quarter to quarter. China Jo-Jo believes
these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information
used by management in its financial and operational decision making. A limitation of using these non-GAAP measures is that they
exclude share-based compensation and change in fair value of derivative liabilities charge that has been and will continue to
be for the foreseeable future a significant recurring expense in our business. Management compensates for these limitations by
providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The table under the heading Reconciliation
to non-GAAP Financial Measures in the beginning of the release has more details on the reconciliations between GAAP financial
measures that are most directly comparable to non-GAAP financial measures.
Forward
Looking Statement
Statements
in this press release regarding the Company that are not historical facts are forward-looking statements and are subject to risks
and uncertainties that could cause actual future events or results to differ materially from such statements. Any such forward-looking
statements, including, but not limited to, financial guidance, are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These statements can be identified by the use of forward-looking terminology such as
"believe," "expect," "estimate," "may," "will," "should," "project,"
"plan," "seek," "intend," "anticipate," the negatives thereof, or comparable terminology.
Such statements typically involve risks and uncertainties and may include financial projections or information regarding the progress
of new product development. It is routine for the Company's internal projections and expectations to change as the quarter and
year progresses, and therefore it should be clearly understood that the internal projections and beliefs upon which the Company
bases its expectations may change. Although these expectations may change, the Company is under no obligation to inform you if
they do. Actual results could differ materially from the expectations reflected in such forward-looking statements as a result
of numerous factors, including the risks associated with the effect of changing economic conditions in the People's Republic of
China, variations in cash flow, reliance on collaborative retail partners and on new product development, variations in new product
development, risks associated with rapid technological change, and the potential of introduced or undetected flaws and defects
in products. Readers are referred to the reports and documents filed from time to time by the Company with the Securities and
Exchange Commission for a discussion of these and other important risk factors that could cause actual results to differ from
those discussed in forward-looking statements. Other than as required under the securities laws, the Company does not assume a
duty to update these forward-looking statements.
About China Jo-Jo Drugstores, Inc.
China
Jo-Jo Drugstores, Inc., through its own retail drugstores, wholesale distributor and online pharmacy, is a leading retailer and
wholesale distributor of pharmaceutical and healthcare products in China. As of December 31, 2015, the Company had 59 retail pharmacies
in Zhejiang Province, China. The Company's wholesale subsidiary not only supplies its retail stores, but also distributes drug
and other healthcare products to other drugstores and drug vendors. The Company routinely posts important information on its corporate
websites at www.jiuzhou-drugstore.com (Chinese) and www.chinajojodrugstores.com (English).
Investor
Relations Contact:
Christopher
Chu, Taylor Rafferty
Tel:
(908) 251-9869
Email:
christopher.chu@taylor-rafferty.com
Frank
Zhao
Chief
Financial Officer
frank.zhao@jojodrugstores.com
Phone:
(561) 372-5555
86-13968118759
9
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