#China #Hangzhou #China Jo-Jo #CJJD #Allright

China Jo-Jo Drugstores Embarks on Strategic Restructuring for Greater Profitability

Overview of Restructuring Initiative
In a significant move aimed at strengthening its operations, China Jo-Jo Drugstores, Inc. (Nasdaq: CJJD), a prominent name in online and offline retail and wholesale distribution of healthcare products in China, has reported that it is set to undergo a substantial strategic restructuring. The company's shift towards an asset-light and wholesale-focused model is anticipated to bring enhanced operational efficiency and profitability.

Key Transactions Involved in Restructuring
The restructuring involves two pivotal transactions:
1. Acquisition of Allright: The company will acquire Allright (Hangzhou) Internet Technology Co. Ltd., which specializes in the pharmaceutical wholesale sector. This acquisition will be executed through an equity exchange involving the issuance of 2,225,000 ordinary shares, representing 38% of the company post-transaction.
2. Divestiture of Retail Business: Jo-Jo Drugstores will divest its drug retail business to its current CEO, Lei Liu, and director, Li Qi. In return, they will surrender their 2,548,353 shares back to the company.

These strategic moves are expected to finalize in the first quarter of 2025, contingent upon customary closing conditions and shareholder approval. Following these transactions, Liu and Qi will resign from their positions, with Frank Zhao, the existing CFO, stepping in as interim CEO during the transitional phase.

Leadership Statements on Restructuring
Mr. Lei Liu, the current Chairman and CEO, noted that this transition signifies a vital shift from a high-cost retail segment toward a more streamlined wholesale model. He emphasized his belief that this strategy will create long-term value for the shareholders of Jo-Jo Drugstores.

Conversely, Lingtao Kong, the principal shareholder of Allright and an incoming board member of Jo-Jo, expressed optimism regarding the integration. He stated that Allright's growth trajectory perfectly complements the strategic vision of Jo-Jo Drugstores.

In his remarks, Frank Zhao highlighted his commitment to ensuring a smooth integration of Allright's operations, maintaining a strong focus on improving efficiency and overall business performance.

About China Jo-Jo Drugstores, Inc.
China Jo-Jo Drugstores operates both an online pharmacy and physical retail drugstores with licensed medical professionals providing consultations. The company operates in a competitive segment of the healthcare products market and aims to enhance its position through this strategic restructuring.

Looking Ahead
Overall, this restructuring appears to be a forward-thinking strategy designed to bolster the company's growth and profitability in the competitive healthcare marketplace. As the transactions are set to close, stakeholders will be keenly observing how these shifts will influence the operational landscape of China Jo-Jo Drugstores. With solid leadership ready to navigate this transition, the company aims to position itself advantageously within the pharmaceutical wholesale sector, ultimately aiming for sustained success and innovation in healthcare delivery.