China Jo-Jo Drugstores Announces $1.53 Million Registered Direct Offering

Rhea-AI Summary

China Jo-Jo Drugstores, Inc. announced a registered direct offering of 0.9 million ordinary shares at $1.70 per share, totaling $1.53 million. The offering is expected to close on or about April 30, 2024, with proceeds intended for general corporate purposes and working capital. The shares are offered under a shelf registration statement on Form F-3, declared effective by the SEC in December 2022.

Insights

Financial Analyst

Looking at the registered direct offering by China Jo-Jo Drugstores, the immediate injection of $1.53 million into their working capital can potentially stabilize the company's short-term operations, particularly as they navigate market fluctuations that are common within the pharmaceutical and healthcare sectors in China. The stock issuance price of $1.70 per share gives us insight into the company's self-assessed valuation at the time of the offering and its comparison against the current market price may indicate investor sentiment regarding the company's growth prospects. It is also important for investors to consider the dilutive effect of the new shares on the existing share pool, which could affect the earnings per share and thus the stock price in the short term.

Pharmaceutical Industry Analyst

When a healthcare provider like China Jo-Jo Drugstores raises capital, it's indicative of their strategic positioning within the highly regulated Chinese pharmaceutical market. The use of the term 'general corporate purposes' suggests a broad allocation of funds, but for investors, the specifics of how these funds will bolster their online and offline retail capabilities, or support their distribution networks, are areas to watch. The pharmaceutical sector in China is competitive and tightly controlled, so the successful deployment of these funds will be key to gaining a competitive edge and ensuring regulatory compliance. Investors would do well to monitor the company's performance metrics post-funding to assess the efficacy of capital utilization.

HANGZHOU, China, April 29, 2024 /PRNewswire/ -- China Jo-Jo Drugstores, Inc. (Nasdaq: CJJD) ("Jo-Jo Drugstores" or the "Company"), a leading online and offline retailer, wholesale distributor of pharmaceutical and other healthcare products and healthcare provider in China, today announced that it has entered into definitive agreements with a number of investors providing for the issuance of 0.9 million ordinary shares, at a purchase price of $1.70 per share, in a registered direct offering for aggregate gross proceeds of approximately $1.53 million. The closing of the sale of the securities is expected to occur on or about April 30, 2024, subject to satisfaction of customary closing conditions.

Jo-Jo Drugstores intends to use the net proceeds from the offering for general corporate purposes and working capital.

The ordinary shares described above are being offered pursuant to a "shelf" registration statement on Form F-3 (File No. 333-259692), which was declared effective by the United States Securities and Exchange Commission (the "SEC") on December 19, 2022. The ordinary shares described above may be offered only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. When filed with the SEC, copies of the final prospectus supplement and the accompanying prospectus relating to the registered direct offering may be obtained at the SEC's website at http://www.sec.gov. 

This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.

About China Jo-Jo Drugstores, Inc.

China Jo-Jo Drugstores, Inc. ("Jo-Jo Drugstores" or the "Company"), is a leading online and offline retailer and wholesale distributor of pharmaceutical and other healthcare products and a provider of healthcare services in China. Jo-Jo Drugstores currently operates an online pharmacy and retail drugstores with licensed doctors on site for consultation, examination and treatment of common ailments at scheduled hours. It is also a wholesale distributor of products similar to those carried in its pharmacies. For more information about the Company, please visit http://jiuzhou360.com. The Company routinely posts important information on its website.

Forward-Looking Statements

This press release contains information about the Company's view of its future expectations, plans and prospects that constitute forward-looking statements. Actual results may differ materially from historical results or those indicated by these forward-looking statements as a result of a variety of factors including, but not limited to, risks and uncertainties associated with its ability to raise additional funding, its ability to maintain and grow its business, variability of operating results, its ability to maintain and enhance its brand, its development and introduction of new products and services, the successful integration of acquired companies, technologies and assets into its portfolio of products and services, marketing and other business development initiatives, competition in the industry, general government regulation, economic conditions, dependence on key personnel, the ability to attract, hire and retain personnel who possess the technical skills and experience necessary to meet the requirements of its clients, and its ability to protect its intellectual property. The Company's encourages you to review other factors that may affect its future results in the Company's annual reports and in its other filings with the Securities and Exchange Commission.

For more information, please contact:

Company Contact: 

Frank Zhao
Chief Financial Officer
+86-571-88077108
frank.zhao@jojodrugstores.com

Investor Relations Contact:

Tina Xiao
Ascent Investor Relations LLC
+1- 646-932-7242
investors@ascent-ir.com

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SOURCE China Jo-Jo Drugstores, Inc.

FAQ

What did China Jo-Jo Drugstores announce?

China Jo-Jo Drugstores announced a registered direct offering of 0.9 million ordinary shares at $1.70 per share.

How much is the total gross proceeds from the offering?

The total gross proceeds from the offering are approximately $1.53 million.

When is the closing of the sale of the securities expected?

The closing of the sale of the securities is expected to occur on or about April 30, 2024.

What is the purpose of the net proceeds from the offering?

The net proceeds from the offering are intended for general corporate purposes and working capital.

Where can copies of the final prospectus supplement be obtained?

Copies of the final prospectus supplement and the accompanying prospectus relating to the offering may be obtained at the SEC's website at http://www.sec.gov.