BIMI BIMI International Medical Inc

 BOQI International Medical Inc. (NASDAQ: BIMI) (“BIMI” or the “Company”), a leading healthcare products and services provider in China, today announced its financial results for the first quarter ended March 31, 2021.

First Quarter 2021 Financial Highlights

• Revenues grew by $1.75 million, or by 423%, to $2.17 million for the first quarter of 2021 from $0.41 million in the same period of 2020.

• Gross profit increased by $0.51 million, or by 620%, to $0.59 million for the first quarter 2021 from $0.08 million in the same period of 2020.

• Gross margin increased to 27.32% for the first quarter 2021 from 19.84% in the same period of 2020.

  

		For three months ended March 31
Differences due to rounding			2021				2020				% change
Revenues		$	2.17 million			$	0.41 million				423	%
Gross profit		$	0.59 million			$	0.08 million				620	%
Gross margin			27.32	%			19.85	%			7.47	%
Net loss from continuing operations		$	3.29 million			$	1.35 million				144	%
Net loss attributable to BOQI International Medical Inc.		$	3.33 million			$	2.19 million				52	%

Mr. Tiewei Song, Chief Executive Officer and President of the Company, commented: “We are pleased to see both of our revenues and gross margins continued to be boosted by our expanded business operations and enhanced efficiency during the first quarter of 2021. These improvements support our strategy to build a comprehensive healthcare ecosystem in China with a focus on a high-end gynecology-focused hospital chain through both organic growth and bolt-on acquisition opportunities. We intend to maintain this momentum in order to achieve sustainable profitability and create value for our shareholders.”

Revenues

Revenues for the three months ended March 31, 2021 and 2020 were $2.17 million and $0.41 million, respectively. Compared with the same period in 2020, revenue in the 2021 period increased by $1.75 million, or 423%, mainly due to the increase in sales of wholesale pharmaceuticals of $1.10 million and medical services of $0.70 million.

Revenues from the retail pharmacy segment for the three months ended March 31, 2021 was $0.12 million, generated from 5 retail pharmacy stores in Chongqing.

Revenues from wholesale medical devices segment for the three months ended March 31, 2021 and 2020 were $0.06 million and $0.25 million, respectively. The decrease is mainly due to low demand for medical devices during the first quarter, which is typical because of the long break during the Chinese New Year.

Cost of revenues

Cost of revenues for the three months ended March 31, 2021 and 2020 was $1.58 million and $0.33 million, respectively. The Company recorded an obsolescence loss of $0.03 million with respect to inventories, which was included in the cost of revenues for the three months ended March 31, 2021 compared with an obsolescence loss of $0.30 million for the same period in 2020. The decrease of inventory provision is due to the obsolescence of inventory held for sale by the Boqi pharmacies in Dalian, whose stores suffered from the lockdown policy in effect due to the COVID-19 pandemic.

Gross profit

Gross profit for the three months ended March 31, 2021 and 2020 was $0.59 million and $0.08 million, respectively. For the three months ended March 31, 2021 and 2020, we had a gross margin of 27.32% and 19.85%, respectively. For the three months ended March 31, 2021 and 2020, the gross profit margin of our: (i) retail pharmacy segment were 17.17% in 2021; (ii) wholesale medical devices segment were 52.73% and 19.73%, respectively; (iii) wholesale pharmaceuticals segments were 36.21% and 19.99%, respectively; and (iv) medical services segment was 9.32% for the three months ended March 31, 2021.

Operating expenses

Operating expenses from continuing operations were $3.83 million for the three months ended March 31, 2021 as compared to $1.41 million for the same period in 2020, an increase of $2.43 million or 173%. The increase is primarily attributable to the inclusion of the operating expenses of the medical services segment of appropriately $0.32 million and the Chongqing Guanzan Technology Co., Ltd. (“Guanzan Group”) of approximately $0.51 million, which we acquired in March 2020, and the amortization of the discount relating to the convertible notes issued in 2021 of $1.61 million, and general operating expenses which primarily include legal expenses of $0.28 million and audit fee of $0.15 million and other compliance expense.

Other expenses

For the three months ended March 31, 2021 and 2020, we reported other expenses of $0.03 million and $0.02 million, respectively. Other expenses mainly consisted of interest expense relating to the bank loans of the Guanzan Group, Chongqing Guoyitang Hospital Co., Ltd. (“Guoyitang”) and Chaohu Zhongshan Minimally Invasive Hospital (“Zhongshan”). The Company completed the acquisitions of Guoyitang and Zhongshan in February, 2021.

Net loss from continuing operation

Net loss from continuing operations was $3.29 million and $1.35 million for the three months ended March 31, 2021 and 2020, respectively. The increase was primarily due to the increase in operating expenses and the other expenses described above.

Net loss attributable to BOQI International Medical Inc.

As a result of the foregoing our net loss attributable to BOQI International Medical Inc. increased by $1.14 million to $3.33 million for the three months ended March 31, 2021 from $2.19 million for the three months ended March 31, 2020.

Cash and working capital

As of March 31, 2021, we had cash of $2.84 million and negative working capital of $0.18 million as compared to cash of $0.14 million and working capital of $9.62 million as of December 31, 2020.

About BOQI International Medical Inc.

BOQI International Medical Inc. was founded in 2006. In February 2019, the Board of Directors of the Company determined to focus on the healthcare industry. The Company is now exclusively a healthcare products and provider, offering a broad range of healthcare products and related services and operates two private hospitals. For more information, please visit www.usbimi.com.

Safe Harbor Statement

Certain matters discussed in this news release are forward-looking statements that involve a number of risks and uncertainties including, but not limited to, the Company’s ability to achieve profitable operations, its ability to continue to operate as a going concern, its ability to continue to meet NASDAQ continued listing requirements, the effects of the spread of the Coronavirus (COVID-19), the demand for the Company’s products and services in the People’s Republic of China, general economic conditions and other risk factors detailed in the Company’s annual report and other filings with the United States Securities and Exchange Commission.

Investor Relations Contact:

Janice Wang EverGreen Consulting Inc. Email: IR@changqingconsulting.com Phone: +1 571-464-9470 (from U.S.) +86 13811768559 (from China)

BOQI INTERNATIONAL MEDICAL, INC. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

		March 31				December 31
		2021				2020
ASSETS
CURRENT ASSETS
Cash		$	2,830,834			$	135,309
Restricted cash			4,590				-
Accounts receivable, net			7,169,691				6,686,552
Advances to suppliers			3,093,935				2,693,325
Amount due from related parties			41,012				-
Inventories, net			3,569,135				735,351
Prepayments and other receivables			4,941,351				14,880,526
Operating lease-right of use assets			46,521				53,425
Total current assets			21,697,069				25,184,488
NON-CURRENT ASSETS
Deferred tax assets			181,451				193,211
Property, plant and equipment, net			1,769,927				910,208
Operating lease-right of use assets			1,572,515				-
Intangible assets-net			13,445				-
Goodwill			24,512,118				6,914,232
Total non-current assets			28,049,456				8,017,651
TOTAL ASSETS		$	49,746,525			$	33,202,139
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term loans		$	1,054,510			$	904,228
Long-term loans due within one year			496,974				34,201
Convertible promissory notes, net			5,132,530				3,328,447
Accounts payable, trade			10,183,541				5,852,050
Advances from customers			529,279				194,086
Amount due to related parties			791,581				226,514
Taxes payable			60,322				773,649
Other payables and accrued liabilities			4,849,557				4,228,976
Lease liability-current			354,705				23,063
Total current liabilities			23,452,999				15,565,214
Lease liability-non current			1,396,148				22,457
Long-term loans - non-current			425,592				720,997
Total non-current liabilities			1,821,740				743,454
TOTAL LIABILITIES			25,274,739				16,308,668
EQUITY
Common stock, $0.001 par value; 50,000,000 shares authorized; 20,131,488 and 13,254,587 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively			20,131				13,254
Additional paid-in capital			37,362,809				26,344,920
Statutory reserves			2,263,857				2,263,857
Accumulated deficit			(16,248,215	)			(12,914,973	)
Accumulated other comprehensive income			853,795				1,003,392
Total BOQI International Medical Inc.’s equity			24,252,377				16,710,450
NON-CONTROLLING INTERESTS			219,409				183,021
Total equity			24,471,786				16,893,471
Total liabilities and equity		$	49,746,525			$	33,202,139

BOQI INTERNATIONAL MEDICAL, INC. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE GAIN/LOSS (UNAUDITED)

		For three months ended March 31
		2021				2020
REVENUES			2,168,004				414,584
COST OF REVENUES			1,575,743				332,299
GROSS PROFIT(LOSS)			592,261				82,285
OPERATING EXPENSES:
Sales and marketing			452,636				41,070
General and administrative			3,380,014				1,364,952
Total operating expenses			3,832,650				1,406,022
LOSS FROM OPERATIONS			(3,240,389	)			(1,323,737	)
OTHER INCOME (EXPENSE)
Interest expense			44,355				21,684
Other (income)/ expense			(12,865	)			545
Total other income (expense), net			(31,490	)			(22,229	)
LOSS BEFORE INCOME TAXES			(3,271,879	)			(1,345,966	)
PROVISION FOR INCOME TAXES			18,748				1,268
NET LOSS FROM CONTINUING OPERATIONS			(3,290,627	)			(1,347,234	)
DISCONTINUED OPERATIONS
Income/(loss) from operations of discontinued operations			-				(854,957	)
NET LOSS			(3,290,627	)			(2,202,191	)
Less: net income (loss) attributable to non-controlling interest			42,615				(7,316	)
NET LOSS ATTRIBUTABLE TO BOQI INTERATIONAL MEDICAL INC.		$	(3,333,242	)		$	(2,194,875	)
OTHER COMPREHENSIVE LOSS
Foreign currency translation adjustment			(149,597	)			(120,201	)
TOTAL COMPREHENSIVE LOSS			(3,440,224	)			(2,322,392	)
Less: comprehensive loss attributable to non-controlling interests			(10,886	)			(4,935	)
COMPREHENSIVE LOSS ATTRIBUTABLE TO BOQI INTERNATIONAL MEDICAL INC.		$	(3,429,338	)		$	(2,317,457	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
Basic and diluted			16,693,038				9,271,641
INCOME (LOSS) PER SHARE
Continuing operation-Basic and diluted		$	(0.20	)		$	(0.15	)
Discontinued operation-Basic and diluted		$	-			$	(0.09	)
Basic and diluted		$	(0.20	)		$	(0.24	)