Business
China Jo-Jo Drugstores Announces Strategic Business Restructuring to Strengthen Wholesale Business for Greater Profitability and Growth
HANGZHOU, China, Feb. 3, 2025 /PRNewswire/ -- China Jo-Jo Drugstores, Inc. (Nasdaq: CJJD) ("Jo-Jo Drugstores" or the "Company"), a leading online and offline
About this update from Ridgetech, Inc.
[{"type":"text","content":"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.\n\nThe restructuring involved two major transactions (the \"Transactions\"):\nAcquisition 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; andDivestiture 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.\nMr. 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 for...