HANGZHOU, China - China Jo-Jo Drugstores, Inc. (NASDAQ:CJJD), a prominent provider of pharmaceutical and healthcare products and services, has announced a registered direct offering of 0.9 million ordinary shares at a price of $1.70 per share. The offering aims to raise approximately $1.53 million in gross proceeds and is expected to close on or about April 30, 2024, pending customary closing conditions.
The company plans to allocate the net proceeds from the sale for general corporate purposes and to bolster working capital. This issuance of shares is in accordance with a shelf registration statement on Form F-3, which the U.S. Securities and Exchange Commission (SEC) declared effective as of December 19, 2022.
The offering of these ordinary shares will be conducted via a prospectus, including a prospectus supplement, which forms part of the effective registration statement. Upon filing with the SEC, the final prospectus supplement and accompanying prospectus will be made available on the SEC's website.
China Jo-Jo Drugstores operates both online and offline, with a network of retail drugstores that provide licensed doctor consultations and a range of healthcare services. The company also distributes wholesale products similar to those offered in its retail outlets.
This press release does not serve as an offer to sell or a solicitation of an offer to buy the securities in any state or jurisdiction where such an offer, solicitation, or sale would be against the law before registration or qualification under the securities laws of any such state or jurisdiction.
The information contained in this press release is based solely on a press release statement from China Jo-Jo Drugstores, Inc. and does not imply any endorsement or prediction of the company's future performance. The completion of the offering is contingent upon meeting the necessary closing conditions.
InvestingPro Insights
As China Jo-Jo Drugstores, Inc. (NASDAQ:CJJD) navigates through its latest offering, a glance at real-time metrics provided by InvestingPro shows a company with a challenging financial landscape. The company's market capitalization currently stands at a modest 6.13 million USD, reflecting the small scale of its operations relative to the broader market. Investors should note that CJJD has a negative Price/Earnings (P/E) ratio of -0.13, indicating that the company is not currently profitable. This aligns with the last twelve months as of Q2 2024, where the adjusted P/E ratio worsens to -0.33. However, the Price/Book ratio as of the same period is low at 0.33, which could suggest that the stock is undervalued relative to the company's book value.
From a revenue standpoint, China Jo-Jo Drugstores reported 154.66 million USD over the last twelve months as of Q2 2024, with a slight decline of 2.5% in revenue growth during that period. The company's gross profit margin stands at 21.53%, which can be considered healthy, but this figure is overshadowed by a significant operating loss of -19.42 million USD, indicating challenges in managing expenses and achieving operational efficiency.
InvestingPro Tips highlight several concerns for investors. With the company operating under a significant debt burden and potentially struggling to make interest payments, coupled with a rapid cash burn, there is an evident need for careful financial management. Additionally, the stock's high price volatility and tendency to move counter to the market could represent a riskier investment. There are over 14 additional InvestingPro Tips available for CJJD, which can provide further insights into the company's financial health and stock performance.
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