HANGZHOU, China, Feb. 3, 2025
/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 it has entered into
definitive agreements for a strategic restructuring initiative to
transition into an asset-light, wholesale-focused company,
streamlining operations and enhancing profitability.
The restructuring involved two major transactions (the
"Transactions"):
- Acquisition transaction: The acquisition of Allright
(Hangzhou) Internet Technology Co.
Ltd. ("Allright"), a fast-growing company engaged in the
pharmaceutical wholesale business, through an equity exchange for
the issuance of 2,225,000 ordinary shares, which represents 38% of
issued and outstanding ordinary shares of the Company after giving
effect to the Transactions; and
- Divestiture transaction: The sale of Jo-Jo Drugstores' drug
retail business to Lei Liu, the current CEO and a director, and Li
Qi, a director of the Company, who, together with their affiliates,
currently owns approximately 41% of outstanding ordinary shares of
the Company, in exchange for a surrender to the Company all shares
held by Liu, Qi and their affiliates in the Company totaling
2,548,353 ordinary shares.
The Transactions are expected to close during the first quarter
of 2025, subject to customary closing conditions, including
approval by the shareholders of Jo-Jo Drugstores. Following
the closing of the Transactions, Liu and Qi are expected to resign
from the Board and any other position (including the CEO) of the
Company, and the ultimate shareholder of Allright, Lingtao Kong, will join the Board. The parties
agree that Frank Zhao, the Company's
current CFO, will assume the role of interim CEO to ensure the
continued operation of the business and integration of Allright's
business.
Mr. Lei Liu, Chairman and CEO of Jo-Jo Drugstores, commented,
"This restructuring marks a pivotal moment for CJJD as we
transition from a high-cost retail segment to a wholesale-focused
model. While I will be shifting my focus to the retail business, an
area where I have deep expertise, I believe this transformation
will enhance operational efficiency and create long-term value for
CJJD's shareholders. I look forward to seeing the wholesale
business thrive under the new leadership."
Mr. Lingtao Kong, the ultimate
shareholder of Allright and incoming board member, stated, "I am
excited to join forces with CJJD as we build a stronger wholesale
platform. Allright's growth trajectory aligns well with CJJD's
strategic vision, and I am confident that our combined expertise
will create new opportunities for expansion and success in the
pharmaceutical wholesale market."
Mr. Frank Zhao, the current CFO
and incoming interim CEO, added, "I am honored to take on this role
as interim CEO during this transformative period. I want to thank
Mr. Liu for his leadership and dedication in building CJJD into the
strong company it is today. As we transition to a wholesale-driven
model, I look forward to working closely with Mr. Kong and our team
to execute our strategic vision and ensure a seamless integration
of Allright's business. Our focus will remain on strengthening our
wholesale operations, improving efficiency, and positioning CJJD
for long-term success."
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 within the meaning of the United States
Private Securities Litigation Reform Act of 1995, Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements other
than statements of historical fact contained in press release,
including statements regarding the benefits of the proposed
Transactions and the anticipated timing of the completion of the
proposed Transactions, are forward-looking statements. Some of
these forward-looking statements can be identified by the use of
forward-looking words, including "may," "should," "expect,"
"intend," "will," "estimate," "anticipate," "believe," "predict,"
"plan," "targets," "projects," "could," "would," "will,"
"continue," "forecast" or the negatives of these terms or
variations of them or similar expressions. All forward-looking
statements are based upon estimates, forecasts and assumptions
that, while considered reasonable by the Company and its
management, are inherently uncertain. 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 the Company's ability to complete the Transactions
in a timely manner or at all, its ability to implement its business
plans and strategies, its ability to raise additional funding, its
ability to maintain and grow its business, fluctuations in
wholesale pricing and demand for pharmaceutical products,
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, its
relationships with suppliers and healthcare providers, 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 risk factors that may affect its
future results in the Company's annual reports and in its other
filings with the Securities and Exchange Commission (the
"SEC").
You should not place undue reliance on forward-looking
statements, which speak only as of the date they are made. The
Company does not any assurance that the post-combination company
will achieve its expected results. The Company does not undertakes
any duty to update these forward-looking statements, except as
otherwise required by law.
Important Information About the Proposed Transactions and
Where to Find It
This press release relates to certain proposed Transactions
involving Jo-Jo Drugstores. The Company will file a proxy statement
with the SEC in connection with the Transactions. A proxy statement
will be sent to all Company shareholders as of the applicable
record date established for voting on the Transactions. The Company
will also file other documents regarding the Transactions with the
SEC.
Before making any voting decision, shareholders are urged to
read the proxy statement, any amendments thereto, and all other
relevant documents filed or that will be filed with the SEC in
connection with the Transactions as they become available because
they will contain important information about the Company and the
Transactions.
Investors and shareholders will be able to obtain free copies of
the proxy statement and all other relevant documents filed or that
will be filed with the SEC by the Company through the website
maintained by the SEC at www.sec.gov. The documents filed by the
Company with the SEC also may be obtained free of charge at the
Company's website at
http://jiuzhou360.com/investors/sec_filings.
NEITHER THE SEC NOR ANY STATE SECURITIES REGULATORY AGENCY HAS
APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS
COMMUNICATION, PASSED UPON THE MERITS OR FAIRNESS OF THE
TRANSACTION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR
ACCURACY OF THE DISCLOSURE IN THIS COMMUNICATION. ANY
REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.
No Offer or Solicitation
This press release is neither a solicitation of a proxy, an
offer to purchase nor a solicitation of an offer to sell any
securities and it is not a substitute for any proxy statement or
other filings that may be made with the SEC should the proposed
Transactions proceed.
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.
