China Jo-Jo Drugstore announces strategic business restructuring

China Jo-Jo Drugstore (CJJD)s 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 acquisition of Allright Internet Technology, a 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 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 Q1. Following the closing of the Transactions, Liu and Qi are expected to resign from the Board and any other position 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.