China Jo-Jo Drugstores Announces $2.74 Million Registered Direct Offering

Rhea-AI Summary

China Jo-Jo Drugstores, Inc. announced a registered direct offering of 1.61 million ordinary shares at a purchase price of $1.70 per share, totaling $2.74 million in gross proceeds. The offering is expected to close on May 17, 2024. The company plans to use the net proceeds for general corporate purposes and working capital. The shares are offered under an effective shelf registration statement on Form F-3.

Financial Analyst

China Jo-Jo Drugstores' move to raise $2.74 million through a registered direct offering indicates a strategic initiative to bolster its working capital and general corporate purposes. From a financial perspective, it's essential to scrutinize the pricing of the offering at $1.70 per share, tailored against the company's current stock performance and historical pricing. This capital injection could be a lever to empower Jo-Jo Drugstores' expansion or reinforce its online and offline platforms, potentially enhancing their competitive stance in the pharmaceutical retail sector. The timing and the size of the offer need to be considered in the context of the company's cash flow needs, investment plans and market conditions. An offering below market price can dilute current shareholders but could also attract investment if the market perceives the underpricing as an opportunity for growth. The use of a "shelf" registration statement is a common tactic offering flexibility to the company, enabling them to time the market and potentially minimize the cost of capital. Retail investors should note that such capital raises can have immediate dilutive effects on stock value but may be warranted by potential growth or stabilization strategies.

Market Research Analyst

The healthcare sector in China is highly competitive, with a significant shift towards online platforms and integrated healthcare services. In this context, China Jo-Jo Drugstores' decision to bolster resources suggests a readiness to maintain and expand its footprint in the sector. The intended use of proceeds for general corporate purposes and working capital is broad, leaving investors to ponder the specific growth initiatives or debt reduction strategies that may be undertaken. With an increasing demand for healthcare services and pharmaceutical products in China, Jo-Jo Drugstores could potentially harness this opportunity to strengthen its market position. Nonetheless, investors should monitor the company's upcoming disclosures on the utilization of these proceeds to assess the efficacy of this capital allocation on long-term shareholder value.

HANGZHOU, China, May 10, 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 1.61 million ordinary shares, at a purchase price of $1.70 per share, in a registered direct offering for aggregate gross proceeds of approximately $2.74 million. The closing of the sale of the securities is expected to occur on or about May 17, 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 is the amount of the registered direct offering announced by China Jo-Jo Drugstores, Inc.?

China Jo-Jo Drugstores, Inc. announced a registered direct offering of approximately $2.74 million.

How many ordinary shares are included in the offering by China Jo-Jo Drugstores, Inc.?

China Jo-Jo Drugstores, Inc. is offering 1.61 million ordinary shares in the registered direct offering.

What is the purchase price per share in the direct offering by China Jo-Jo Drugstores, Inc.?

The purchase price per share in the direct offering by China Jo-Jo Drugstores, Inc. is $1.70.

When is the expected closing date for the sale of securities in the offering by China Jo-Jo Drugstores, Inc.?

The closing of the sale of securities in the offering by China Jo-Jo Drugstores, Inc. is expected to occur on or about May 17, 2024.

What will China Jo-Jo Drugstores, Inc. utilize the net proceeds from the offering for?

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