10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q/A

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended   June 30, 2012

or

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from     ____________________________________ to ________________________________________

Commission File Number:    001-34711

CHINA JO-JO DRUGSTORES, INC.

(Exact name of registrant as specified in its charter)

Nevada	98-0557852
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
Room 507-513, 5th Floor A Building, Meidu Plaza Gongshu District, Hangzhou, Zhejiang Province People’s Republic of China
(Address of principal executive offices)	(Zip Code)

+86 (571) 88077078

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.         Yes þ   No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every, Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).           Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer o	Accelerated Filer                    o
Non-accelerated filer     o (Do not check if a smaller reporting company)	Smaller reporting company   þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).   Yes o   No þ

As of August 14, 2012, the registrant had 13,571,553 shares of common stock, par value $0.001 per share, outstanding.

EXPLANATORY NOTE

The purpose of this amendment on Form 10-Q/A to the registrant’s Quarterly Report on Form 10-Q for the period ended June 30, 2012, filed with the Securities and Exchange Commission on August 14, 2012 (the “Form 10-Q”), is solely to furnish Exhibit 101 to the Form 10-Q, as required by Rule 405 of Regulation S-T. Exhibit 101 provides the financial statements and related notes from the Form 10-Q formatted in eXtensible Business Reporting Language (XBRL).

No other changes have been made to the Form 10-Q. This Form 10-Q/A speaks as of the original filing date of the Form 10-Q, does not reflect events that may have occurred subsequent to the original filing date and does not modify or update in any way disclosure made in the Form 10-Q.

Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

ITEM 6.        EXHIBITS.

EXHIBIT INDEX

Exhibit Number	Description
2	Share Exchange Agreement among Kerrisdale Mining Corporation (“Kerrisdale”), certain of its stockholders, Renovation Investment (Hong Kong) Co., Ltd. (“Renovation”) and its shareholders dated September 17, 2009 (3)
3.1	Articles of Incorporation of Kerrisdale (1)
3.2	Certificate of Amendment to Articles of Incorporation of Kerrisdale filed with the Nevada Secretary of State on July 14, 2008 (2)
3.3	Articles of Merger between Kerrisdale Mining and China Jo-Jo Drugstores, Inc. filed with the Nevada Secretary of State on September 22, 2009 (3)
3.4	Bylaws (1)
3.5	Text of Amendments to the Bylaws (2)
3.6	Certificate of Change Pursuant to NRS 78.209 with an effective date of April 9, 2010 (6)
4.1	Specimen of Common Stock Certificate (1)
4.2	2010 Equity Incentive Plan (8)
10.1	Consulting Services Agreement between Zhejiang Jiuxin Investment Management Co., Ltd. (“Jiuxin Management”) and Hangzhou Jiuzhou Grand Pharmacy Chain Co., Ltd. (“Jiuzhou Pharmacy”) dated August 1, 2009 (3)
10.2	Operating Agreement among Jiuxin Management, Jiuzhou Pharmacy and its owners dated August 1, 2009 (3)
10.3	Equity Pledge Agreement among Jiuxin Management, Jiuzhou Pharmacy and its owners dated August 1, 2009 (3)
10.4	Option Agreement among Jiuxin Management, Jiuzhou Pharmacy and its owners dated August 1, 2009 (3)
10.5	Voting Rights Proxy Agreement among Jiuxin Management, Jiuzhou Pharmacy and its owners dated August 1, 2009 (3)
10.6	Consulting Services Agreement between Jiuxin Management and Hangzhou Jiuzhou Clinic of Integrated Traditional and Western Medicine (General Partnership) (“Jiuzhou Clinic”) dated August 1, 2009 (3)
10.7	Operating Agreement among Jiuxin Management, Jiuzhou Clinic and its owners dated August 1, 2009 (3)
10.8	Equity Pledge Agreement among Jiuxin Management, Jiuzhou Clinic and its owners dated August 1, 2009 (3)
10.9	Option Agreement among Jiuxin Management, Jiuzhou Clinic and its owners dated August 1, 2009 (3)
10.10	Voting Rights Proxy Agreement among Jiuxin Management, Jiuzhou Clinic and its owners dated August 1, 2009 (3)
10.11	Consulting Services Agreement between Jiuxin Management and Hangzhou Jiuzhou Medical & Public Health Service Co., Ltd. (“Jiuzhou Service”) dated August 1, 2009 (3)
10.12	Operating Agreement among Jiuxin Management, Jiuzhou Service and its owners dated August 1, 2009 (3)
10.13	Equity Pledge Agreement among Jiuxin Management, Jiuzhou Service and its owners dated August 1, 2009 (3)
10.14	Option Agreement among Jiuxin Management, Jiuzhou Service and its owners dated August 1, 2009 (3)
10.15	Voting Rights Proxy Agreement among Jiuxin Management, Jiuzhou Service and its owners dated August 1, 2009 (3)
10.16	Amendment to Consulting Services Agreement between Jiuxin Management and Jiuzhou Pharmacy dated October 27, 2009 (4)
10.17	Amendment to Operating Agreement between Jiuxin Management and Jiuzhou Pharmacy dated October 27, 2009 (4)
10.18	Amendment to Option Agreement between Jiuxin Management and Jiuzhou Pharmacy dated October 27, 2009 (4)
10.19	Amendment to Voting Rights Proxy Agreement between Jiuxin Management and Jiuzhou Pharmacy dated October 27, 2009 (4)
10.20	Amendment to Consulting Services Agreement between Jiuxin Management and Jiuzhou Clinic dated October 27, 2009 (4)
10.21	Amendment to Operating Agreement between Jiuxin Management and Jiuzhou Clinic dated October 27, 2009 (4)
10.22	Amendment to Option Agreement between Jiuxin Management and Jiuzhou Clinic dated October 27, 2009 (4)
10.23	Amendment to Voting Rights Proxy Agreement between Jiuxin Management and Jiuzhou Clinic dated October 27, 2009 (4)
10.24	Amendment to Consulting Services Agreement between Jiuxin Management and Jiuzhou Service dated October 27, 2009 (4)
10.25	Amendment to Operating Agreement between Jiuxin Management and Jiuzhou Service dated October 27, 2009 (4)
10.26	Amendment to Option Agreement between Jiuxin Management and Jiuzhou Service dated October 27, 2009 (4)
10.27	Amendment to Voting Rights Proxy Agreement between Jiuxin Management and Jiuzhou Service dated October 27, 2009 (4)
10.28	Director Offer Letter with Marc Thomas Serrio dated March 15, 2010 (5)
10.29	Indemnification Agreement with Marc Thomas Serrio dated March 15, 2010 (5)
10.30	Loanout Agreement with Worldwide Officers, Inc. dated August 1, 2011 (12)
10.31	Restricted Stock Award Agreement with Worldwide Officers, Inc. dated August 1, 2011 (12)
10.32	Employment Agreement with Ming Zhao dated August 1, 2011 (12)
10.33	Restricted Stock Award Agreement with Ming Zhao dated August 1, 2011 (12)
10.34	Director Offer Letter with Bennet P. Tchaikovsky dated August 1, 2011 (12)

10.35	Restricted Stock Award Agreement with Bennet P. Tchaikovsky dated August 1, 2011 (12)
10.36	Consulting Services Agreement between Jiuxin Management and Jiuying Pharmacy dated May 15, 2012 (14)
10.37	Operating Agreement between Jiuxin Management and Jiuying Pharmacy dated May 15, 2012 (14)
10.38	Voting Rights Proxy Agreement between Jiuxin Management and certain owners of Jiuying Pharmacy dated May 15, 2012 (14)
10.39	Equity Pledge Agreement between Jiuxin Management and certain owners of Jiuying Pharmacy dated May 15, 2012 (14)
10.40	Option Agreement between Jiuxin Management and certain owners of Jiuying Pharmacy dated May 15, 2012 (14)
14	Code of Business Conduct and Ethics (5)
31.1	Section 302 Certification by the Corporation’s Chief Executive Officer **
31.2	Section 302 Certification by the Corporation’s Chief Financial Officer **
32.1	Section 906 Certification by the Corporation’s Chief Executive Officer **
32.2	Section 906 Certification by the Corporation’s Chief Financial Officer **
99.1	Agreement for Logistics Services entered into between Jiuzhou Pharmacy and Zhejiang Yingte Logistics Co., Ltd. (“Yingte Logistics”) dated January 1, 2011 (9)
99.2	Project Agreement between The People’s Government of Qianhong Village, Lin’an, Zhejiang Province (the “Qianhong Local Government”) and Jiuzhou Pharmacy dated February 27, 2010 (7)
99.3	Security Deposit Agreement between the Qianhong Local Government and Jiuzhou Pharmacy dated February 27, 2010 (7)
99.4	Equity Interests Transfer Agreement dated April 15, 2011 (13)
99.5	Supplemental Agreement to Equity Interests Transfer Agreement dated August 25, 2011 (13)
101.INS	XBRL Instance Document *
101.SCH	XBRL Taxonomy Extension Schema Document *
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document *
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document *
101.LAB	XBRL Taxonomy Extension Label Linkbase Document *
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document *

*

Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

**

Previously filed as an exhibit to the Form 10-Q for the period ending June 30, 2012, as filed with the Securities and Exchange Commission on August 14, 2012.

(1)	Incorporated by reference from the registrant’s Registration Statement on Form SB-2 filed on November 28, 2007
(2)	Incorporated by reference from the registrant’s Current Report on Form 8-K filed on July 15, 2008
(3)	Incorporated by reference from the registrant’s Current Report on Form 8-K filed on September 24, 2009
(4)	Incorporated by reference from the registrant’s Current Report on Form 8-K filed on October 30, 2009
(5)	Incorporated by reference from the registrant’s Current Report on Form 8-K filed on March 16, 2010
(6)	Incorporated by reference from the registrant’s Current Report on Form 8-K filed on April 14, 2010
(7)	Incorporated by reference from the registrant’s Annual Report on Form 10-K filed on June 29, 2010
(8)	Incorporated by reference from the registrant’s Current Report on Form 8-K filed on November 3, 2010
(9)	Incorporated by reference from the registrant’s Quarterly Report on Form 10-Q filed on February 14, 2011
(10)	Incorporated by reference from the registrant’s Current Report on Form 8-K filed on April 25, 2011
(11)	Incorporated by reference from the registrant’s Current Report on Form 8-K filed on May 19, 2011
(12)	Incorporated by reference from the registrant’s Current Report on Form 8-K filed on August 2, 2011
(13)	Incorporated by reference from the registrant’s Current Report on Form 8-K filed on October 21, 2011
(14)	Incorporated by reference from the registrant’s Current Report on Form 8-K filed on May 17, 2012

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		CHINA JO-JO DRUGSTORES, INC.
		(Registrant)
Date: August 22, 2012	By:	/s/  Lei Liu
		Lei Liu Chief Executive Officer
Date: August 22, 2012	By:	/s/ Ming Zhao
		Ming Zhao
		Chief Financial Officer

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DESCRIPTION OF BUSINESS AND ORGANIZATION (Details Textuals) (Renovation HK, Common Stock)	1 Months Ended
	Sep. 17, 2009
Renovation HK | Common Stock
Business Acquisition [Line Items]
Issuance of equity consideration (in shares)	7,900,000
Percentage of capital stock in exchange transaction	100.00%

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INTANGIBLE ASSETS (Details) (USD $)	Jun. 30, 2012	Mar. 31, 2012
Acquired Finite-Lived Intangible Assets [Line Items]
Goodwill and other intangible assets	$ 3,031,206	$ 3,028,612
Less: accumulated amortization	(250,367)	(211,667)
Intangible assets, net	2,780,839	2,816,945
Licenses and permits
Acquired Finite-Lived Intangible Assets [Line Items]
Goodwill and other intangible assets	1,096,729	1,095,792
Software
Acquired Finite-Lived Intangible Assets [Line Items]
Goodwill and other intangible assets	462,217	461,820
Jiuxin Medicine | Goodwill on acquisition
Acquired Finite-Lived Intangible Assets [Line Items]
Goodwill and other intangible assets	1,402,651	1,401,451
Shanghai Zhongxing | Goodwill on acquisition
Acquired Finite-Lived Intangible Assets [Line Items]
Goodwill and other intangible assets	$ 69,609	$ 69,549

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OTHER CURRENT ASSETS (Details) (USD $)	Jun. 30, 2012		Mar. 31, 2012
Other Current Assets [Abstract]
Prepaid rental expenses	$ 1,670,967		$ 1,994,280
Lease rights transfer fees (1)	403,024	[1]	402,735	[1]
Prepaids and other current assets	764,103		456,286
Total	$ 2,838,094		$ 2,853,301

[1] Lease rights transfer fees are paid by the Company to secure store rentals in coveted areas. These additional costs of acquiring the right to lease new store locations are capitalized and amortized over the period of the initial lease term.

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SEGMENTS (Details 1) (USD $)	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Retail Drugstores
Revenue from External Customer [Line Items]
Revenue from external customers	$ 8,954,456	$ 21,427,859
Retail Drugstores | Prescription Drugs
Revenue from External Customer [Line Items]
Revenue from external customers	4,036,867	9,721,466
Retail Drugstores | Over-The-Counter (OTC) Drugs
Revenue from External Customer [Line Items]
Revenue from external customers	2,626,267	6,283,486
Retail Drugstores | Nutritional Supplements
Revenue from External Customer [Line Items]
Revenue from external customers	829,286	2,192,635
Retail Drugstores | Traditional Chinese Medicine (TCM)
Revenue from External Customer [Line Items]
Revenue from external customers	866,701	2,576,311
Retail Drugstores | Sundry Products
Revenue from External Customer [Line Items]
Revenue from external customers	222,939	306,407
Retail Drugstores | Medical Devices
Revenue from External Customer [Line Items]
Revenue from external customers	372,396	347,554
Drug Wholesale
Revenue from External Customer [Line Items]
Revenue from external customers	21,368,783
Drug Wholesale | Prescription Drugs
Revenue from External Customer [Line Items]
Revenue from external customers	12,720,261
Drug Wholesale | Over-The-Counter (OTC) Drugs
Revenue from External Customer [Line Items]
Revenue from external customers	4,533,073
Drug Wholesale | Nutritional Supplements
Revenue from External Customer [Line Items]
Revenue from external customers	4,108,594
Drug Wholesale | Traditional Chinese Medicine (TCM)
Revenue from External Customer [Line Items]
Revenue from external customers	2,866
Drug Wholesale | Sundry Products
Revenue from External Customer [Line Items]
Revenue from external customers	1,082
Drug Wholesale | Medical Devices
Revenue from External Customer [Line Items]
Revenue from external customers	2,907
Chinese herbs Farming
Revenue from External Customer [Line Items]
Revenue from external customers	2,524,091
Chinese herbs Farming | Prescription Drugs
Revenue from External Customer [Line Items]
Revenue from external customers
Chinese herbs Farming | Over-The-Counter (OTC) Drugs
Revenue from External Customer [Line Items]
Revenue from external customers
Chinese herbs Farming | Nutritional Supplements
Revenue from External Customer [Line Items]
Revenue from external customers
Chinese herbs Farming | Traditional Chinese Medicine (TCM)
Revenue from External Customer [Line Items]
Revenue from external customers	2,524,091
Chinese herbs Farming | Sundry Products
Revenue from External Customer [Line Items]
Revenue from external customers
Chinese herbs Farming | Medical Devices
Revenue from External Customer [Line Items]
Revenue from external customers

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INTANGIBLE ASSETS (Details Textuals) (USD $)	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense of intangibles	$ 38,450	$ 37,463

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TRADE ACCOUNTS RECEIVABLE (Details) (USD $)	Jun. 30, 2012	Mar. 31, 2012
Accounts Receivable, Net [Abstract]
Accounts receivable	$ 24,558,283	$ 16,817,801
Less: allowance for doubtful accounts	(920,886)	(301,130)
Trade accounts receivable, net	$ 23,637,397	$ 16,516,671

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RELATED PARTY TRANSACTIONS AND ARRANGEMENTS (Tables)

3 Months Ended

Jun. 30, 2012

Related Party Transactions [Abstract]

Schedule of amounts receivable from and payable to related parties

	June 30, 2012		March 31, 2012
Due to cofounders (1):	$	880,058	$	880,058
Due to director (2):		678,461		578,383
Total	$	1,558,519	$	1,458,441

  

(1) As of June 30, 2012 and 2011, amount due to cofounders represents contributions from the Owners to Jiuxin Management to enable Jiuxin Management to meet its approved PRC registered capital requirements.

(2) Due to foreign exchange restrictions, Mr. Lei Liu personally lent U.S. dollars to the Company to facilitate its payments of expenses in the United States.

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SUBSEQUENT EVENT (Details Textuals) (Shouantang Technology, USD $)	Jun. 30, 2012 Previously Reported	Jun. 30, 2012 Adjusted	Jul. 31, 2012 Subsequent Event	Jul. 31, 2012 Subsequent Event Previously Reported	Jul. 31, 2012 Subsequent Event Adjusted
Subsequent Event [Line Items]
Registered capital	$ 20,000,000	$ 11,000,000		$ 20,000,000	$ 11,000,000
Remaining additional capital payment no longer required			$ 9,000,000

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TAXES (Details 2) (USD $)	Jun. 30, 2012	Mar. 31, 2012
Tax Disclosure [Abstract]
VAT	$ 505,657	$ 435,390
Income tax	7,403	7,240
Others	24,180	26,976
Total taxes payable	$ 537,240	$ 469,606

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COMMITMENTS AND CONTINGENCIES (Details) (USD $)	Jun. 30, 2012
Commitments and Contingencies [Line Items]
2013	$ 4,596,607
2014	4,368,014
2015	3,817,227
2016	3,123,739
2017	1,712,307
Thereafter	5,471,184
Retail Drugstores
Commitments and Contingencies [Line Items]
2013	4,402,021
2014	4,163,310
2015	3,603,182
2016	2,898,564
2017	1,452,371
Thereafter	4,239,314
Drug Wholesale
Commitments and Contingencies [Line Items]
2013	194,586
2014	204,704
2015	214,045
2016	225,175
2017	259,936
Thereafter	1,231,870
Chinese herbs Farming
Commitments and Contingencies [Line Items]
2013
2014
2015
2016
2017
Thereafter

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DESCRIPTION OF BUSINESS AND ORGANIZATION (Tables)

3 Months Ended

Jun. 30, 2012

Description Of Business and Organization [Abstract]

Schedule of activities of company and affiliates

Entity Name	Background		Ownership
Renovation HK	●	Incorporated in Hong Kong SAR on September 2, 2008	100%
Jiuxin Management	● ● ●	Established in the PRC on October 14, 2008 Deemed a wholly foreign owned enterprise (“WFOE”) under PRC law Registered capital of $4,500,000 fully paid	100%
Shouantang Technology	● ● ● ●	Established in the PRC on July 16, 2010 by Renovation with registered capital of $20 million Registered capital requirement reduced by the SAIC to $11 million in July, 2012 and is fully paid Deemed a WFOE under PRC law Invests and finances the working capital of Quannuo Technology	100%
Qianhong Agriculture	● ● ●	Established in the PRC on August 10, 2010 by Jiuxin Management Registered capital of RMB 10,000,000 fully paid Carries out cultivation of TCM herbal plants	100%
Quannuo Technology	● ● ● ●	Established in the PRC on July 7, 2009 Registered capital of RMB 10,000,000 fully paid Acquired by Shouantang Technology in November 2010 Operates the Company’s online pharmacy website and provide software and technical support	100%
Hangzhou Quannuo	● ● ●	Established in the PRC on July 8, 2010 by Quannuo Technology Registered capital of RMB 800,000 fully paid Operates one “Quannuo Grand Pharmacy”	100%
Tonglu Lydia	● ● ●	Established in PRC on June 24, 2011 by Shouantang Technology Registered capital of RMB 5,000,000 fully paid To carry out cultivation of TCM herbal plants	100%
Jiuzhou Pharmacy (1)	● ● ●	Established in the PRC on September 9, 2003 Registered capital of RMB 5 million fully paid Operates the “Hangzhou Jiuzhou Grand Pharmacy” stores in and around Hangzhou and Jiangshan	VIE by contractual arrangements (2)
Jiuzhou Clinic (1)	● ●	Established in the PRC as a general partnership on October 10, 2003 Operates a medical clinic adjacent to one of Jiuzhou Pharmacy’s stores	VIE by contractual arrangements (2)

Jiuzhou Service (1) ● ● ● Established in the PRC on November 2, 2005 Registered capital of RMB 500,000 fully paid Operates a medical clinic adjacent to one of Jiuzhou Pharmacy’s stores VIE by contractual arrangements (2)

Shanghai Lydia	● ● ●	Established in the PRC on January 31, 2011 by Jiuzhou Pharmacy Registered capital of RMB 1,000,000 fully paid Operates the “Lydia Grand Pharmacy” store in Shanghai	VIE by contractual arrangements as a wholly-owned subsidiary of Jiuzhou Pharmacy (2)
Jiuxin Medicine	● ● ● ●	Established in PRC on December 31, 2003 Acquired by Jiuzhou Pharmacy in August 2011 Registered capital of RMB 10 million fully paid Carries out pharmaceutical distribution services	VIE by contractual arrangements as a wholly-owned subsidiary of Jiuzhou Pharmacy (2)
Shanghai Zhongxing	● ● ● ●	Established in PRC on June 19, 2006 Registered capital of RMB 1 million fully paid 99% acquired by Shanghai Lydia in July 2011 Operates the “Zhongxing Grand Pharmacy” store in Shanghai	VIE by contractual arrangements as a controlled entity of Jiuzhou Pharmacy through Shanghai Lydia (2)
Jiutong Medical	● ●	Established in the PRC on December 20, 2011 by Renovation with registered capital of $5 million $2 million of registered capital paid, with the balance of $3 million due by December 20, 2012	100%
Jiuying Pharmacy	● ●	Established in the PRC on February 27, 2012 with registered capital of RMB 5 million fully paid Operates four “Jiuying Grand Pharmacy” stores in Hangzhou	VIE by contractual arrangements (3)

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PROPERTY AND EQUIPMENT (Details Textuals) (USD $)	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Property, Plant and Equipment [Abstract]
Depreciation expenses	$ 572,416	$ 224,718

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1)	3 Months Ended
	Jun. 30, 2012
Building
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	35 years
Leasehold improvements | Minimum
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	3 years
Leasehold improvements | Maximum
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	10 years
Motor vehicles
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	5 years
Office equipment and furniture | Minimum
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	3 years
Office equipment and furniture | Maximum
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	5 years

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COMMITMENTS AND CONTINGENCIES (Tables)

3 Months Ended

Jun. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

The Company's commitments for minimum rental payments

Periods ending June 30,	Retail Drugstores		Drug Wholesale		Chinese herb Farming		Total Amount
2013	$	4,402,021	$	194,586	$	-	$	4,596,607
2014		4,163,310		204,704		-		4,368,014
2015		3,603,182		214,045		-		3,817,227
2016		2,898,564		225,175		-		3,123,739
2017		1,452,371		259,936		-		1,712,307
Thereafter		4,239,314		1,231,870		-		5,471,184

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OTHER NONCURRENT ASSETS (Details) (USD $)	Jun. 30, 2012		Mar. 31, 2012
Other Assets, Noncurrent Disclosure [Abstract]
Prepayment for lease of land use right - noncurrent	$ 5,498,679	[1]	$ 5,533,500	[1]
Lease rights transfer fees-noncurrent	142,619	[2]	243,167	[2]
Total	$ 5,641,298		$ 5,776,667

[1] This is a payment made to a local government in connection with entering into a 30-year operating land lease agreement.

[2] Lease rights transfer fees are paid by the Company to secure store rentals in coveted areas. These additional costs of acquiring the right to lease new store locations are capitalized and amortized over the period of the initial lease term.

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EARNINGS PER SHARE (Details) (USD $)	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Earnings Per Share [Abstract]
Net income attributable to controlling interest	$ 534,887	$ 3,242,729
Weighted average shares used in basic computation	13,557,496	13,532,240
Diluted effect of restricted shares	$ 41,190
Weighted average shares used in diluted computation	13,598,686	13,532,240
Earnings per share - Basic:
Net income before noncontrolling interest	$ 0.04	$ 0.24
Add: Net loss attributable to noncontrolling interest	$ 0.00
Net income attributable to controlling interest	$ 0.04	$ 0.24
Earnings per share - Diluted:
Net income before noncontrolling interest	$ 0.04	$ 0.24
Add: Net loss attributable to noncontrolling interest	$ 0.00
Net income attributable to controlling interest	$ 0.04	$ 0.24

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RELATED PARTY TRANSACTIONS AND ARRANGEMENTS (Details Textuals) (USD $)	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Mar. 31, 2012
Related Party Transactions [Abstract]
Notes payable	$ 5,611,915		$ 4,208,928
Rent expense	47,400	46,170
Director
Related Party Transaction [Line Items]
Rent paid	$ 0	$ 0

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TRADE ACCOUNTS RECEIVABLE (Details Textuals) (USD $)	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Accounts Receivable, Net [Abstract]
Accounts receivable written off	$ 155,165	$ 54,691

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OTHER CURRENT ASSETS

3 Months Ended

Jun. 30, 2012

Other Current Assets [Abstract]

OTHER CURRENT ASSETS

Note 4 – OTHER CURRENT ASSETS

Other current assets consisted of the following:

	June 30, 2012		March 31, 2012
Prepaid rental expenses	$	1,670,967	$	1,994,280
Lease rights transfer fees (1)		403,024		402,735
Prepaids and other current assets		764,103		456,286
Total	$	2,838,094	$	2,853,301

(1) Lease rights transfer fees are paid by the Company to secure store rentals in coveted areas. These additional costs of acquiring the right to lease new store locations are capitalized and amortized over the period of the initial lease term.

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PURCHASE OPTION DERIVATIVE LIABILITY (Details) (USD $)	3 Months Ended
	Jun. 30, 2012
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Stock price (in dollars per share)	$ 1.37	[1]
Exercise price (in dollars per share)	$ 6.25	[1]
Annual dividend yield	0.00%	[1]
Expected term (years)	2 years 3 months 10 days	[1]
Risk-free interest rate	0.39%	[1]
Expected volatility	92.60%	[1]

[1] As of June 30, 2012, the option to purchase 105,000 shares of common stock had not been exercised.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textuals) (USD $)	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Mar. 31, 2012
Accounting Policies [Abstract]
Benchmark percentage of the voting ownership interest for control and common control	50.00%
Percentage of collectively owned variable interest entities	100.00%
Deferred tax assets	$ 345,673		$ 0
Advertising and promotion costs	38,253	131,600
Foreign currency exchange rate for translated amounts with exception of equity for balance sheet	0.1582		0.1581
Average translation rates applied to income and cash flow statement amounts	0.1580	0.1539
Deposits not covered by insurance	$ 4,850,298		$ 6,268,508

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PROPERTY AND EQUIPMENT (Tables)

3 Months Ended

Jun. 30, 2012

Property, Plant and Equipment [Abstract]

Schedule of property and equipment

	June 30, 2012			March 31, 2012
Building	$	1,110,876		$	1,109,926
Leasehold improvements		13,512,482			11,423,330
Office equipment and furniture		5,029,675			4,808,721
Motor vehicles		421,346			420,985
Total		20,074,379			17,762,962
Less: Accumulated depreciation		(5,392,040	)		(4,814,490	)
Construction-in-progress		712,059			2,698,648
Property and equipment, net	$	15,394,398		$	15,647,120

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OTHER CURRENT ASSETS (Tables)

3 Months Ended

Jun. 30, 2012

Other Current Assets [Abstract]

Schedule of other current assets

	June 30, 2012		March 31, 2012
Prepaid rental expenses	$	1,670,967	$	1,994,280
Lease rights transfer fees (1)		403,024		402,735
Prepaids and other current assets		764,103		456,286
Total	$	2,838,094	$	2,853,301

(1) Lease rights transfer fees are paid by the Company to secure store rentals in coveted areas. These additional costs of acquiring the right to lease new store locations are capitalized and amortized over the period of the initial lease term.

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TAXES (Details 1)	3 Months Ended
	Jun. 30, 2012		Jun. 30, 2011
Tax Disclosure [Abstract]
U.S. Statutory rates	34.00%		34.00%
Foreign income not recognized in the U.S.	(34.00%)		(34.00%)
China income taxes	25.00%		25.00%
Exemption rendered by local tax authorities (1)	(25.00%)	[1]		[1]
Effective income tax rate nondeductible expense, other	0.70%	[2]	3.00%	[2]
Effective tax rate	0.70%		28.00%

[1] Qianhong Agriculture enjoyed income tax waiver as an agriculture company since its start in 2010.

[2] The 0.7% and 3.0% for the three months ended June 30, 2012 and 2011, respectively, represent expenses incurred by the Company that were not deductible for PRC income tax.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textuals 1)	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Credit Concentration Risk
Concentration Risk [Line Items]
Benchmark percentage of total sales for major customers	10.00%	10.00%
Percentage of total revenue by major customers	27.00%
Percentage of total account receivable	36.00%
Supplier Concentration Risk
Concentration Risk [Line Items]
Percentage of total purchases	34.00%	40.00%
Percentage of advances to major suppliers	21.00%	14.00%

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OTHER NONCURRENT ASSETS (Tables)

3 Months Ended

Jun. 30, 2012

Other Assets, Noncurrent [Abstract]

Schedule of other noncurrent assets

	June 30, 2012		March 31, 2012
Prepayment for lease of land use right – noncurrent (1)	$	5,498,679	$	5,533,500
Lease rights transfer fees-noncurrent (2)		142,619		243,167
Total	$	5,641,298	$	5,776,667

(1)	This is a payment made to a local government in connection with entering into a 30-year operating land lease agreement.
(2)	Lease rights transfer fees are paid by the Company to secure store rentals in coveted areas. These additional costs of acquiring the right to lease new store locations are capitalized and amortized over the period of the initial lease term.

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INTANGIBLE ASSETS (Tables)

3 Months Ended

Jun. 30, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of net intangible assets

	June 30, 2012			March 31, 2012
Goodwill on acquisition of Jiuxin Medicine	$	1,402,651		$	1,401,451
Goodwill on acquisition of Shanghai Zhongxing		69,609			69,549
Licenses and permits		1,096,729			1,095,792
Software		462,217			461,820
Total goodwill and other intangible assets		3,031,206			3,028,612
Less: accumulated amortization		(250,367	)		(211,667	)
Intangible assets, net	$	2,780,839		$	2,816,945

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TRADE ACCOUNTS RECEIVABLE

3 Months Ended

Jun. 30, 2012

Accounts Receivable, Net [Abstract]

TRADE ACCOUNTS RECEIVABLE

NOTE 3 – TRADE ACCOUNTS RECEIVABLE

Trade accounts receivable consisted of the following:

	June 30, 2012			March 31, 2012
Accounts receivable	$	24,558,283		$	16,817,801
Less: allowance for doubtful accounts		(920,886	)		(301,130	)
Trade accounts receivable, net	$	23,637,397		$	16,516,671

For the three months ended June 30, 2012 and 2011, $155,165 and $54,691 in accounts receivable were directly written off respectively.

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TAXES (Tables)

3 Months Ended

Jun. 30, 2012

Tax Disclosure [Abstract]

Schedule of income arising in derived from tax jurisdiction which each entity domiciled

Entity	Income Tax Jurisdiction
Jo-Jo Drugstores	United States
Renovation	Hong Kong
All other entities	PRC

Schedule of reconciles the U.S. statutory tax rates with company's effective tax rate

	For the three months ended June 30,
	2012			2011
U.S. Statutory rates		34.0	%		34.0	%
Foreign income not recognized in the U.S.		(34.0	)		(34.0	)
China income taxes		25.0			25.0
Exemption rendered by local tax authorities (1)		(25.0	)		-
Other (2)		0.7			3.0
Effective tax rate		0.7	%		28.0	%

(1) Qianhong Agriculture enjoyed income tax waiver as an agriculture company since its start in 2010.  

(2) The 0.7% and 3.0% for the three months ended June 30, 2012 and 2011, respectively, represent expenses incurred by the Company that were not deductible for PRC income tax.

Schedule of taxes payable

	June 30, 2012		March 31, 2012
VAT	$	505,657	$	435,390
Income tax		7,403		7,240
Others		24,180		26,976
Total taxes payable	$	537,240	$	469,606

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DESCRIPTION OF BUSINESS AND ORGANIZATION (Details Textuals 1)	Jun. 30, 2012 stores
Shanghai Lydia
Segment Reporting Information [Line Items]
Number of drugstores operated	2
Shanghai Zhongxing
Segment Reporting Information [Line Items]
Number of drugstores operated	1
Hangzhou Quannuo
Segment Reporting Information [Line Items]
Number of drugstores operated	1
Jiuying Pharmacy
Segment Reporting Information [Line Items]
Number of drugstores operated	5
Jiuzhou Clinic
Segment Reporting Information [Line Items]
Number of medical clinics owned	1
Jiuzhou Service
Segment Reporting Information [Line Items]
Number of medical clinics owned	1
China Jo-Jo Drugstores
Segment Reporting Information [Line Items]
Number of medical clinics owned	2
Percentage of ownership held	49.00%
Jiuxin Management
Segment Reporting Information [Line Items]
Percentage of ownership held	10.00%
Shouantang Technology
Segment Reporting Information [Line Items]
Percentage of ownership held	39.00%
Owners
Segment Reporting Information [Line Items]
Percentage of ownership held	51.00%

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OTHER NONCURRENT ASSETS (Details Textuals)	3 Months Ended
	Jun. 30, 2012
Other Assets, Noncurrent Disclosure [Abstract]
Term of agreement for land lease	30 years

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COMMITMENTS AND CONTINGENCIES (Details Textuals) (USD $)	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Commitments and Contingencies Disclosure [Abstract]
Total rent expense	$ 1,031,746	$ 731,746

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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (USD $)	Jun. 30, 2012	Mar. 31, 2012
CURRENT ASSETS
Cash	$ 3,621,132	$ 3,833,216
Restricted cash	1,407,870	2,818,449
Notes receivable	927,947
Trade accounts receivable, net	23,637,397	16,516,671
Inventories	7,408,490	6,875,574
Other receivables	685,657	603,294
Advances to suppliers, net	16,882,711	14,347,557
Other current assets	2,838,094	2,853,301
Total current assets	57,409,298	47,848,062
PROPERTY AND EQUIPMENT, net	15,394,398	15,647,120
OTHER ASSETS
Long term deposits	2,518,900	2,872,219
Other noncurrent assets	5,641,298	5,776,667
Intangible assets, net	2,780,839	2,816,945
Total other assets	10,941,037	11,465,831
Total assets	83,744,733	74,961,013
CURRENT LIABILITIES
Accounts payable, trade	19,129,388	13,906,383
Notes payable	5,611,915	4,208,928
Other payables	1,385,657	782,586
Other payables - related parties	1,558,519	1,458,441
Customer deposit	2,029,599	1,332,141
Taxes payable	537,240	469,606
Accrued liabilities	467,116	417,184
Total current liabilities	30,719,434	22,575,269
Purchase option derivative liability	34,577	34,419
Total liabilities	30,754,011	22,609,688
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock; $0.001 par value; 10,000,000 shares authorized; nil issued and outstanding as of June 30 and March 31, 2012
Common stock; $0.001 par value; 250,000,000 shares authorized; 13,628,658 and 13,589,621 shares issued and outstanding as of June 30 and March 31, 2012	13,629	13,589
Additional paid-in capital	16,902,757	16,853,039
Statutory reserves	1,309,109	1,309,109
Retained earnings	31,963,987	31,429,100
Accumulated other comprehensive income	2,802,569	2,747,561
Total stockholders' equity	52,992,051	52,352,398
Noncontrolling interests	(1,329)	(1,073)
Total equity	52,990,722	52,351,325
Total liabilities and stockholders' equity	$ 83,744,733	$ 74,961,013

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textuals 2) (Noncontrolling Interest, Shanghai Zhongxing)	Jun. 30, 2012
Noncontrolling Interest | Shanghai Zhongxing
Noncontrolling Interest [Line Items]
Percentage of ownership held	1.00%

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DESCRIPTION OF BUSINESS AND ORGANIZATION

3 Months Ended

Jun. 30, 2012

Description Of Business and Organization [Abstract]

DESCRIPTION OF BUSINESS AND ORGANIZATION

Note 1 – DESCRIPTION OF BUSINESS AND ORGANIZATION

China Jo-Jo Drugstores, Inc. (“Jo-Jo Drugstores” or the “Company”), was incorporated in Nevada on December 19, 2006, originally under the name “Kerrisdale Mining Corporation.” On September 24, 2009, the Company changed its name to “China Jo-Jo Drugstores, Inc.” in connection with a share exchange transaction as described below.

On September 17, 2009, the Company completed a share exchange transaction with Renovation Investment (Hong Kong) Co., Ltd. (“Renovation”), whereby 7,900,000 shares of common stock were issued to the stockholders of Renovation in exchange for 100% of the capital stock of Renovation. The completion of the share exchange transaction resulted in a change of control. The share exchange transaction was accounted for as a reverse acquisition and recapitalization and, as a result, the consolidated financial statements of the Company (the legal acquirer) is, in substance, those of Renovation (the accounting acquirer), with the assets and liabilities, and revenues and expenses, of the Company being included effective from the date of the share exchange transaction. Renovation has no substantive operations of its own except for its holdings of Zhejiang Jiuxin Investment Management Co., Ltd. (“Jiuxin Management”), Zhejiang Shouantang Medical Technology Co., Ltd. (“Shouantang Technology”) and Hangzhou Jiutong Medical Technology Co., Ltd (“Jiutong Medical”), its wholly-owned subsidiaries.

The Company is a retail and wholesale distributor of pharmaceutical and other healthcare products in the People’s Republic of China (“China” or the “PRC”). The Company’s retail business is comprised primarily of pharmacies, a majority of which are operated by Hangzhou Jiuzhou Grand Pharmacy Chain Co., Ltd. (“Jiuzhou Pharmacy”), a company that the Company controls through contractual arrangements. Shanghai Lydia Grand Pharmacy Co., Ltd. (“Shanghai Lydia”), a wholly-owned subsidiary of Jiuzhou Pharmacy, operates two store locations in Shanghai. On July 29, 2011, Shanghai Lydia obtained control of Shanghai Bieyanghong Zhongxing Grand Pharmacy Co. Ltd. (“Bieyanghong Zhongxing”), which also operates one pharmacy in Shanghai, and Bieyanghong Zhongxing subsequently changed its name to Shanghai Lydia Zhongxing Grand Pharmacy Co., Ltd. (“Shanghai Zhongxing”). One drugstore is operated by Hangzhou Quannuo Grand Pharmacy Co., Ltd. (“Hangzhou Quannuo”), a wholly-owned subsidiary of Zhejiang Quannuo Internet Technology Co., Ltd. (“Quannuo Technology”), which is wholly-owned by Shouantang Technology. Five drugstores are operated by Zhejiang Jiuying Grand Pharmacy Co., Ltd. (“Jiuying Pharmacy”). 39% and 10% of the equity interests of Jiuying Pharmacy are held by Shouantang Technology and Jiuxin Management, respectively, with the remaining 51% held by the three owners of Jiuzhou Pharmacy, Jiuzhou Clinic and Jiuzhou Service (the “Owners”).

The Company’s retail business also includes two medical clinics through Hangzhou Jiuzhou Clinic of Integrated Traditional and Western Medicine (“Jiuzhou Clinic”) and Hangzhou Jiuzhou Medical and Public Health Service Co., Ltd. (“Jiuzhou Service”), both of which are also controlled by the Company through contractual arrangements.

The Company’s wholesale business is primarily conducted through Zhejiang Jiuxin Medicine Co., Ltd. (“Jiuxin Medicine”), which is licensed to distribute prescription and non-prescription pharmaceutical products throughout China. Jiuzhou Pharmacy acquired Jiuxin Medicine on August 25, 2011. The wholesale business also includes Hangzhou Qianhong Agriculture Development Co., Ltd. (“Qianhong Agriculture”), a wholly-owned subsidiary of Jiuxin Management, which operates a cultivation project of herbal plants used for traditional Chinese medicine (“TCM”), Tonglu Lydia Agriculture Development Co., Ltd. (“Tonglu Lydia”), a wholly-owned subsidiary of Shouantang Technology, which will do the same in the future, and Jiutong Medical, which processes the herbal plants, mainly cultivated by Qianhong Agriculture.

The accompanying consolidated financial statements reflect the activities of the Company and each of the following entities:

Entity Name	Background		Ownership
Renovation HK	●	Incorporated in Hong Kong SAR on September 2, 2008	100%
Jiuxin Management	● ● ●	Established in the PRC on October 14, 2008 Deemed a wholly foreign owned enterprise (“WFOE”) under PRC law Registered capital of $4,500,000 fully paid	100%
Shouantang Technology	● ● ● ●	Established in the PRC on July 16, 2010 by Renovation with registered capital of $20 million Registered capital requirement reduced by the SAIC to $11 million in July, 2012 and is fully paid Deemed a WFOE under PRC law Invests and finances the working capital of Quannuo Technology	100%
Qianhong Agriculture	● ● ●	Established in the PRC on August 10, 2010 by Jiuxin Management Registered capital of RMB 10,000,000 fully paid Carries out cultivation of TCM herbal plants	100%
Quannuo Technology	● ● ● ●	Established in the PRC on July 7, 2009 Registered capital of RMB 10,000,000 fully paid Acquired by Shouantang Technology in November 2010 Operates the Company’s online pharmacy website and provide software and technical support	100%
Hangzhou Quannuo	● ● ●	Established in the PRC on July 8, 2010 by Quannuo Technology Registered capital of RMB 800,000 fully paid Operates one “Quannuo Grand Pharmacy”	100%
Tonglu Lydia	● ● ●	Established in PRC on June 24, 2011 by Shouantang Technology Registered capital of RMB 5,000,000 fully paid To carry out cultivation of TCM herbal plants	100%
Jiuzhou Pharmacy (1)	● ● ●	Established in the PRC on September 9, 2003 Registered capital of RMB 5 million fully paid Operates the “Hangzhou Jiuzhou Grand Pharmacy” stores in and around Hangzhou and Jiangshan	VIE by contractual arrangements (2)
Jiuzhou Clinic (1)	● ●	Established in the PRC as a general partnership on October 10, 2003 Operates a medical clinic adjacent to one of Jiuzhou Pharmacy’s stores	VIE by contractual arrangements (2)

Jiuzhou Service (1) ● ● ● Established in the PRC on November 2, 2005 Registered capital of RMB 500,000 fully paid Operates a medical clinic adjacent to one of Jiuzhou Pharmacy’s stores VIE by contractual arrangements (2)

Shanghai Lydia	● ● ●	Established in the PRC on January 31, 2011 by Jiuzhou Pharmacy Registered capital of RMB 1,000,000 fully paid Operates the “Lydia Grand Pharmacy” store in Shanghai	VIE by contractual arrangements as a wholly-owned subsidiary of Jiuzhou Pharmacy (2)
Jiuxin Medicine	● ● ● ●	Established in PRC on December 31, 2003 Acquired by Jiuzhou Pharmacy in August 2011 Registered capital of RMB 10 million fully paid Carries out pharmaceutical distribution services	VIE by contractual arrangements as a wholly-owned subsidiary of Jiuzhou Pharmacy (2)
Shanghai Zhongxing	● ● ● ●	Established in PRC on June 19, 2006 Registered capital of RMB 1 million fully paid 99% acquired by Shanghai Lydia in July 2011 Operates the “Zhongxing Grand Pharmacy” store in Shanghai	VIE by contractual arrangements as a controlled entity of Jiuzhou Pharmacy through Shanghai Lydia (2)
Jiutong Medical	● ●	Established in the PRC on December 20, 2011 by Renovation with registered capital of $5 million $2 million of registered capital paid, with the balance of $3 million due by December 20, 2012	100%
Jiuying Pharmacy	● ●	Established in the PRC on February 27, 2012 with registered capital of RMB 5 million fully paid Operates four “Jiuying Grand Pharmacy” stores in Hangzhou	VIE by contractual arrangements (3)

(1) Jiuzhou Pharmacy, Jiuzhou Clinic and Jiuzhou Service have been under the common control of the Owners since their respective establishment dates, pursuant to agreements amongst the Owners to vote their interests in concert as memorialized in a voting agreement. Based on such voting agreement, the Company has determined that common control exists among these three companies in accordance with generally accepted accounting standards. Operationally, the Owners have operated these three companies in conjunction with one another since each company’s respective establishment date. Shanghai Lydia, Shanghai Zhongxing and Jiuxin Medicine are also deemed under the common control of the Owners as they are each a subsidiary of Jiuzhou Pharmacy.

(2)

To comply with certain foreign ownership restrictions of pharmacy and medical clinic operators, Jiuxin Management entered into a series of contractual arrangements with Jiuzhou Pharmacy, Jiuzhou Clinic and Jiuzhou Service on August 1, 2009. These contractual arrangements are comprised of five agreements: consulting services agreement, operating agreement, equity pledge agreement, voting rights agreement and option agreement. As a result of these agreements, which obligate Jiuxin Management to absorb all of the risks of loss from the activities of Jiuzhou Pharmacy, Jiuzhou Clinic and Jiuzhou Service, and enable the Company (through Jiuxin Management) to receive all of their expected residual returns, the Company accounts for all three companies (as well as the two subsidiaries of Jiuzhou Pharmacy) as a variable interest entity (“VIE”) under the accounting standards of the Financial Accounting Standards Board (“FASB”). Accordingly, the financial statements of Jiuzhou Pharmacy, Jiuzhou Clinic and Jiuzhou Service, as well as the subsidiaries and entity under the control of Jiuzhou Pharmacy (Shanghai Lydia, Jiuxin Medicine and Shanghai Zhongxing), are consolidated into the financial statements of the Company.

(3)

To comply with foreign ownership restrictions, the Company holds 49% of the equity interest (39% through Shouantang Technology and 10% through Jiuxin Management). The remaining 51% is held by the Owners but controlled by the Company through contractual arrangements between Jiuxin Management and Jiuying Pharmacy entered into on May 15, 2012. Such contractual arrangements are identical to those that Jiuxin Management entered into with Jiuzhou Pharmacy, Jiuzhou Clinic and Jiuzhou Service. As such, the Company also accounts for Jiuying Pharmacy as a VIE and consolidates its financial statements into those of the Company.

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POSTRETIREMENT BENEFITS (Details Textuals) (USD $)	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Compensation and Retirement Disclosure [Abstract]
Employment benefits and pension	$ 164,146	$ 80,763

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EARNINGS PER SHARE (Tables)

3 Months Ended

Jun. 30, 2012

Earnings Per Share [Abstract]

Schedule of reconciliation of the basic and diluted earnings per share computation

	Three months ended
	June 30,
	2012		2011
Net income attributable to controlling interest	$	534,887	$	3,242,729
Weighted average shares used in basic computation		13,557,496		13,532,240
Diluted effect of restricted shares		41,190		-
Weighted average shares used in diluted computation		13,598,686		13,532,240
Earnings per share – Basic:
Net income before noncontrolling interest	$	0.04	$	0.24
Add: Net loss attributable to noncontrolling interest	$	0.00	$	-
Net income attributable to controlling interest	$	0.04	$	0.24
Earnings per share – Diluted:
Net income before noncontrolling interest	$	0.04	$	0.24
Add: Net loss attributable to noncontrolling interest	$	0.00	$	-
Net income attributable to controlling interest	$	0.04	$	0.24

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STOCKHOLDER'S EQUITY (Details Textuals 1) (USD $)	1 Months Ended				3 Months Ended	0 Months Ended	1 Months Ended	3 Months Ended	12 Months Ended		3 Months Ended	1 Months Ended							3 Months Ended	0 Months Ended				3 Months Ended		0 Months Ended	3 Months Ended
	May 31, 2010 Mr. Ming Zhao	Aug. 31, 2011 Mr. Ming Zhao Restricted Stock	Aug. 01, 2011 Mr. Ming Zhao Restricted Stock	May 01, 2010 Mr. Ming Zhao Restricted Stock	Jun. 30, 2012 Mr. Ming Zhao Restricted Stock General and Administrative Expense	May 14, 2010 Mr. Bennet P. Tchaikovsky Restricted Stock Stock incentive plan	Aug. 31, 2011 Mr. Bennet P. Tchaikovsky Restricted Stock Stock incentive plan	Aug. 01, 2011 Mr. Bennet P. Tchaikovsky Restricted Stock Stock incentive plan	Mar. 31, 2012 Mr. Bennet P. Tchaikovsky Restricted Stock Stock incentive plan	Apr. 28, 2011 Mr. Bennet P. Tchaikovsky Restricted Stock Stock incentive plan	Jun. 30, 2012 Mr. Bennet P. Tchaikovsky Restricted Stock Stock incentive plan General and Administrative Expense	Nov. 30, 2011 Legal Counsel Restricted Stock	May 31, 2011 Legal Counsel Restricted Stock	Nov. 30, 2010 Legal Counsel Restricted Stock	May 01, 2012 Legal Counsel Restricted Stock	Nov. 01, 2011 Legal Counsel Restricted Stock	May 01, 2011 Legal Counsel Restricted Stock	Nov. 01, 2010 Legal Counsel Restricted Stock	Jun. 30, 2012 Legal Counsel Restricted Stock General and Administrative Expense	Mar. 14, 2012 Mr. Marc Serrio Restricted Stock	Mar. 14, 2011 Mr. Marc Serrio Restricted Stock	Mar. 15, 2012 Mr. Marc Serrio Restricted Stock	Mar. 15, 2011 Mr. Marc Serrio Restricted Stock	Jun. 30, 2012 Mr. Marc Serrio Restricted Stock General and Administrative Expense	Jun. 30, 2011 Mr. Marc Serrio Restricted Stock General and Administrative Expense	Jan. 16, 2012 Group of 46 employees Restricted Stock Stock incentive plan	Jun. 30, 2012 Group of 46 employees Restricted Stock Stock incentive plan General and Administrative Expense	Jun. 30, 2012 Group of 46 employees Restricted Stock Stock incentive plan Selling Expense
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Share-based Compensation common stock issued during the period (in share)	6,000	40,000				14,000	5,883	4,613				2,340	2,340	2,340						33,058	11,268					297,000
Trading value of common stock, per share (in dollars per share)			$ 1.70	$ 4.80		$ 4.66		$ 1.70		$ 2.71					$ 2.71	$ 1.66	$ 1.07	$ 5.00				$ 1.21	$ 3.55
General and administrative expense					$ 8,500						$ 2,501								$ 1,467					$ 9,973	$ 9,973		$ 19,399	$ 7,936
Share-based compensation arrangement by share-based payment, award vested in period (in share)									3,917

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Jun. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

Note 17 – COMMITMENTS AND CONTINGENCIES

Operating lease commitments

The Company recognizes lease expense on a straight line basis over the term of its leases in accordance with the relevant accounting standards. The Company has entered into various tenancy agreements for its store premises and for the land leased from a local government for the cultivation of Chinese medicinal herbs.

The Company’s commitments for minimum rental payments under its leases for the next five years and thereafter are as follows:

Periods ending June 30,	Retail Drugstores		Drug Wholesale		Chinese herb Farming		Total Amount
2013	$	4,402,021	$	194,586	$	-	$	4,596,607
2014		4,163,310		204,704		-		4,368,014
2015		3,603,182		214,045		-		3,817,227
2016		2,898,564		225,175		-		3,123,739
2017		1,452,371		259,936		-		1,712,307
Thereafter		4,239,314		1,231,870		-		5,471,184

Total rent expense amounted to $1,031,746 and $731,746 for the three months ended June 30, 2012 and 2011, respectively.

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SEGMENTS (Tables)

3 Months Ended

Jun. 30, 2012

Segment Reporting [Abstract]

Schedule of information by segment

	Retail Drugstores			Drug Wholesale			Chinese herbs Farming		Total
Revenue	$	8,954,456		$	21,368,783		$	2,524,091	$	32,847,330
Cost of goods		6,629,003			20,843,901			229,649		27,702,553
Gross profit	$	2,325,453		$	524,882		$	2,294,442	$	5,144,777
Income from operations	$	(1,054,834	)	$	(660,597	)	$	2,155,405	$	439,974
Depreciation and amortization	$	466,939		$	136,168		$	7,759	$	610,866
Total capital expenditures	$	215,910		$	544		$	-	$	216,454
Total assets	$	45,945,587		$	31,224,760		$	6,574,386	$	83,744,733

Retail Drugstores

Segment Reporting Information [Line Items]

Schedule of net revenue from external customers by main products

	Three months ended June 30,
	2012		2011
Prescription Drugs	$	4,036,867	$	9,721,466
Over-The-Counter (OTC) Drugs		2,626,267		6,283,486
Nutritional Supplements		829,286		2,192,635
Traditional Chinese Medicine (TCM)		866,701		2,576,311
Sundry Products		222,939		306,407
Medical Devices		372,396		347,554
Total	$	8,954,456	$	21,427,859

Drug Wholesale

Segment Reporting Information [Line Items]

Schedule of net revenue from external customers by main products

	Three months ended June 30,
	2012		2011
Prescription Drugs	$	12,720,261	$	-
Over-The-Counter (OTC) Drugs		4,533,073		-
Nutritional Supplements		4,108,594		-
Traditional Chinese Medicine (TCM)		2,866		-
Sundry Products		1,082		-
Medical Devices		2,907		-
Total	$	21,368,783	$	-

Chinese herbs Farming

Segment Reporting Information [Line Items]

Schedule of net revenue from external customers by main products

	Three months ended June 30,
	2012		2011
Prescription Drugs	$	-	$	-
Over-The-Counter (OTC) Drugs		-		-
Nutritional Supplements		-		-
Traditional Chinese Medicine (TCM)		2,524,091		-
Sundry Products		-		-
Medical Devices		-		-
Total	$	2,524,091	$	-

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Jun. 30, 2012

Accounting Policies [Abstract]

Basis of presentation and consolidation

Basis of presentation and consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. These condensed consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company’s annual report on Form 10-K for the fiscal year ended March 31, 2012 filed with the SEC on July 2, 2012. Operating results for the three months ended June 30, 2012 may not be necessarily indicative of the results that may be expected for the full year.

The condensed consolidated financial statements include the financial statements of the Company, its subsidiaries and VIEs. All significant inter-company transactions and balances between the Company, its subsidiaries and VIEs are eliminated upon consolidation.

Consolidation of variable interest entities

Consolidation of variable interest entities

In accordance with accounting standards regarding consolidation of variable interest entities, VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision making ability. All VIEs with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes.

The Company has concluded, based on the contractual arrangements, that Jiuzhou Pharmacy (including its subsidiaries and controlled entities), Jiuzhou Clinic and Jiuzhou Service are each a VIE and that the Company’s wholly-owned subsidiary, Jiuxin Management, absorbs a majority of the risk of loss from the activities of these companies, thereby enabling the Company, through Jiuxin Management, to receive a majority of their respective expected residual returns.

Additionally, as Jiuzhou Pharmacy, Jiuzhou Clinic and Jiuzhou Service are under common control, the consolidated financial statements have been prepared as if the transactions had occurred retroactively as to the beginning of the reporting period of these consolidated financial statements.

Control and common control is defined under the accounting standards as “an individual, enterprise, or immediate family members who hold more than 50 percent of the voting ownership interest of each entity.” Because the Owners collectively own 100% of Jiuzhou Pharmacy, Jiuzhou Clinic and Jiuzhou Service, and have agreed to vote their interests in concert since the establishment of each of these three companies as memorialized the Voting Rights Proxy Agreement, the Company believes that the Owners collectively have control and common control of the three companies. Accordingly, the Company believes that Jiuzhou Pharmacy, Jiuzhou Clinic and Jiuzhou Service were constructively held under common control by Jiuxin Management as of the time the Contractual Agreements were entered into, establishing Jiuxin Management as their primary beneficiary. Jiuxin Management, in turn, is owned by Renovation, which is owned by the Company.

Although the Company has determined that the accounting standards regarding consolidation of VIEs do not provide for retroactive accounting treatment, Jiuzhou Pharmacy, Jiuzhou Clinic, Jiuzhou Service, and Jiuying Pharmacy in substance were controlled by the Owners on September 9, 2003, October 10, 2003, November 2, 2005 and February 27, 2012, the establishment dates of Jiuzhou Pharmacy, Jiuzhou Clinic, Jiuzhou Service and Jiuying Pharmacy, respectively. Such common control conditions resulted in the share exchange transaction to be a capital transaction in substance, reflected as a recapitalization, and the Company has accordingly recorded the consolidation of Renovation at its historical cost.

Risks and Uncertainties

Risks and Uncertainties

The operations of the Company are located in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by the political, economic, and legal environments in the PRC, as well as by the general state of the PRC economy. The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political, regulatory and social conditions in the PRC, and by changes in governmental policies or interpretations with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations including its organization and structure disclosed in Note 1, this may not be indicative of future results.

The Company has significant cash deposits with suppliers in order to obtain and maintain inventory. The Company’s ability to obtain products and maintain inventory at existing and new locations is dependent upon its ability to post and maintain significant cash deposits with its suppliers. In the PRC, many vendors are unwilling to extend credit terms for product sales that require cash deposits to be made. The Company does not generally receive interest on any of its supplier deposits, and such deposits are subject to loss as a result of the creditworthiness or bankruptcy of the party who holds such funds, as well as the risk from illegal acts such as conversion, fraud, theft or dishonesty associated with the third party. If these circumstances were to arise, the Company would find it difficult or impossible, due to the unpredictability of legal proceedings in China, to recover all or a portion of the amount on deposit with its vendors or landlords.

Members of the current management team own controlling interests in the Company and are also the Owners of the VIEs in the PRC. The Company only controls the VIEs through contractual arrangements which obligate it to absorb the risk of loss and to receive the residual expected returns. As such, the controlling shareholders of the Company and the VIEs could cancel these agreements or permit them to expire at the end of the agreement terms, as a result of which the Company would not retain control of the VIEs.

Use of estimates

Use of estimates

The preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The significant estimates made in the preparation of the accompanying unaudited condensed consolidated financial statements relate to the assessment of the carrying values of accounts receivable and related allowance for doubtful accounts, useful lives of property and equipment, and fair value of purchase option derivative liability. Because of the use of estimates inherent in the financial reporting process, actual results could materially differ from those estimates.

Intangibles other than goodwill

Intangibles other than goodwill

Intangible assets that are acquired individually or as part of a group of assets, are initially recorded at their fair value. The cost of a group of assets acquired in a transaction is allocated to the individual assets based on their relative fair values.

The estimated useful lives of the Company’s intangible assets are as follows:

	Estimated Useful Life
Goodwill	Indefinite
Licenses and permits	Indefinite
Software	3 years

The Company evaluates intangible assets for impairment whenever events or changes in circumstances indicate that the assets might be impaired.

There was no indication of goodwill or other intangible impairment during the three months ended June 30, 2012.

Revenue recognition

Revenue recognition

Revenue from sales of prescription medicine at the drugstores is recognized when the prescription is filled and the customer picks up and pays for the prescription.

Revenue from sales of other merchandise at the drugstores is recognized at the point of sale, which is when the customer pays for and receives the merchandise.

Revenue from medical services is recognized after the service has been rendered to the customer.

Revenue from sales of merchandise to non-retail customers is recognized when the following conditions are met: (1) persuasive evidence of an arrangement exists (sales agreements and customer purchase orders are used to determine the existence of an arrangement); (2) delivery of goods has occurred and risks and benefits of ownership have been transferred, which is when the goods are received by the customer at its designated location in accordance with the sales terms; (3) the sales price is fixed or determinable; and (4) collectability is probable. Historically, sales returns have been minimal.

The Company’s revenue is net of value added tax (“VAT”) collected on behalf of PRC tax authorities in respect to the sales of merchandise. VAT collected from customers, net of VAT paid for purchases, is recorded as a liability in the accompanying consolidated balance sheets until it is paid to the relevant PRC tax authorities.

Restricted cash

Restricted cash

The Company’s restricted cash consists of cash in a bank as security for its notes payable. The Company has notes payable outstanding with the bank and is required to keep certain amounts on deposit that are subject to withdrawal restrictions. The notes payable are generally short term in nature due to their short maturity period of six to nine months; thus, restricted cash is classified as a current asset.

Accounts receivable

Accounts receivable

Accounts receivable represent amounts due from banks relating to retail sales that are paid or settled by the customers’ debit or credit cards, amounts due from government social security bureaus relating to retail sales of drugs, prescription medicine, and medical services that are paid or settled by the customers’ medical insurance cards, and amounts due from non-retail customers for sales of merchandise.

Accounts receivable are recorded at net realizable value consisting of the carrying amount less an allowance for uncollectible accounts, as needed. In its wholesale and farming business, the Company uses the aging method to estimate the allowance for anticipated uncollectible receivable balances. Under the aging method, bad debt percentages determined by management, based on historical experience and current economic climate, are applied to customers’ balances categorized by the number of months the underlying invoices have remained outstanding. At each reporting period, the allowance balance is adjusted to reflect the amount computed as a result of the aging method. When facts subsequently become available to indicate that the allowance provided requires an adjustment, a corresponding adjustment is made to the allowance account as a change in estimate. In its retail business, accounts receivable mainly consist of reimbursements due from the government insurance bureau and certain commercial health insurance programs and are usually collected within one or two months. The Company directly writes off delinquent account balances, which is determined to be uncollectable after confirming with the government health insurance bureau or commercial health insurance programs, each month.

Inventories

Inventories

Inventories are stated at the lower of cost or market. Cost is determined using the first in first out (FIFO) method. Market is the lower of replacement cost or net realizable value. The Company carries out physical inventory counts on a monthly basis at each store and warehouse location. Self-cultivated herbs are recorded at its purchase price, which includes direct cost such as seed selection, fertilizer, labor costs and contract fee that are spent in growing herbs on the leased farmland, and indirect cost which includes amortization of farmland development cost. All the costs are accumulated until the time of harvest and then allocated to harvested herbs upon sales. The Company periodically reviews its inventory and records write-downs to inventories for shrinkage losses and damaged merchandise that are identified. Historically, these amounts have not been material to the consolidated financial statements.

Property and equipment

Property and equipment

Property and equipment are stated at cost, net of accumulated depreciation or amortization. Depreciation is calculated on the straight-line method over the estimated useful lives of the assets, taking into consideration the assets’ estimated residual value. Leasehold improvements are amortized over the shorter of lease term or remaining lease period of the underlying assets. Following are the estimated useful lives of the Company’s property and equipment:

	Estimated Useful Life
Leasehold improvements	3-10 years
Motor vehicles	5 years
Office equipment & furniture	3-5 years
Buildings	35 years

Maintenance, repairs and minor renewals are charged to expense as incurred. Major additions and betterment to property and equipment are capitalized.

Impairment of long lived assets

Impairment of long lived assets

The Company evaluates long lived tangible and intangible assets for impairment, whenever events or changes in circumstances indicate that the carrying value may not be recoverable from its estimated future cash flows. Recoverability is measured by comparing the assets’ net book value to the related projected undiscounted cash flows from these assets, considering a number of factors including past operating results, budgets, economic projections, market trends and product development cycles. If the net book value of the asset exceeds the related undiscounted cash flows, the asset is considered impaired, and a second test is performed to measure the amount of impairment loss. There were no impairments of these assets as of June 30, 2012.

Notes payable

Notes payable

During the normal course of business, the Company regularly issues bank acceptance bills as a payment method to settle outstanding accounts payables with various material suppliers. The Company records such bank acceptance bills as notes payables. Such notes payable are generally short term in nature due to their short maturity period of six to nine months.

Income taxes

Income taxes

The Company records income taxes pursuant to the accounting standards for income taxes. These standards require the recognition of deferred income tax liabilities and assets for the expected future tax consequences of temporary differences between income tax basis and financial reporting basis of assets and liabilities. Provision for income taxes consists of taxes currently due and the net change in deferred taxes. A valuation allowance is recognized if it is more likely than not that some portion, or all of, a deferred tax asset will not be realized. As of June 30, 2012 and March 31, 2012, the Company’s deferred tax asset amounted to $345,673 and $0, respectively.

Stock based compensation

Stock based compensation

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with the FASB’s accounting standards regarding accounting for stock-based compensation and accounting for equity instruments that are issued to other than employees for acquiring or in conjunction with selling goods or services. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably determinable. The value of equity instruments issued for consideration other than employee services is determined on the earlier of a performance commitment or completion of performance by the provider of goods or services as defined by these accounting standards. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.

Advertising and promotion costs

Advertising and promotion costs

Advertising and promotion costs are expensed as incurred. Advertising and promotion costs amounted to $38,253 and $131,600 for three months ended June 30, 2012 and 2011, respectively. Advertising and promotion costs consist primarily of print and television advertisements.

Foreign currency translation

Foreign currency translation

The Company uses the United States dollar (“U.S. dollars” or “USD”) for financial reporting purposes. The Company’s subsidiaries and VIEs maintain their books and records in their functional currency the Renminbi (“RMB”), the currency of the PRC.

In general, for consolidation purposes, the Company translates the assets and liabilities of its subsidiaries and VIEs into U.S. dollars using the applicable exchange rates prevailing at the balance sheet date, and the statements of income and cash flows are translated at average exchange rates during the reporting period. As a result, amounts related to assets and liabilities reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheet. Equity accounts are translated at historical rates. Adjustments resulting from the translation of the financial statements of the subsidiaries and VIEs are recorded as accumulated other comprehensive income.

The balance sheet amounts, with the exception of equity, at June 30, 2012 and March 31, 2012 were translated at 1 RMB to $0.1582 USD and at 1 RMB to $0.1581 USD, respectively. The average translation rates applied to income and cash flow statement amounts for the three months ended June 30, 2012 and 2011 were at 1 RMB to $0.1580 USD and at 1 RMB to $0.1539 USD, respectively.

Concentrations and credit risk

Concentrations and credit risk

Certain financial instruments, which subject the Company to concentration of credit risk, consist of cash and restricted cash. The Company has cash balances at financial institutions located in Hong Kong and PRC. Balances at financial institutions in Hong Kong may, from time to time, exceed Hong Kong Deposit Protection Board’s insured limits. Balances at financial institutions and state-owned banks within the PRC are not covered by insurance. As of June 30, 2012 and March 31, 2012, the Company had deposits totaling $4,850,298 and $6,268,508 that were not covered by insurance, respectively. To date, the Company has not experienced any losses in such accounts.

For the three months ended June 30, 2012, two vendors collectively accounted for approximately 34% of the Company’s total purchases and one vendor collectively accounted for 21% of total advances to suppliers. For the three months ended June 30, 2011, three vendors collectively accounted for 40% of the Company’s total purchases and 14% of total advances to suppliers.

For the three months ended June 30, 2012, two customers accounted for approximately 27% of the Company’s total sales while three customers collectively accounted for 36% of total accounts receivable. For the three months ended June 30, 2011, no customer accounted for more than 10% of the Company’s total sales or accounts receivable.

Noncontrolling interest

Noncontrolling interest

As of June 30, 2012, 1% of the equity interests of Shanghai Zhongxing was owned by Shanghai Bieyanghong Grand Pharmacy Co., Ltd. and not under the Company's control.

XML

EARNINGS PER SHARE (Details Textuals)	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Earnings Per Share [Abstract]
Antidilutive securities excluded from calculation	105,000	105,000

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Jun. 30, 2012

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Note 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation and consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. These condensed consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company’s annual report on Form 10-K for the fiscal year ended March 31, 2012 filed with the SEC on July 2, 2012. Operating results for the three months ended June 30, 2012 may not be necessarily indicative of the results that may be expected for the full year.

The condensed consolidated financial statements include the financial statements of the Company, its subsidiaries and VIEs. All significant inter-company transactions and balances between the Company, its subsidiaries and VIEs are eliminated upon consolidation.

Consolidation of variable interest entities

In accordance with accounting standards regarding consolidation of variable interest entities, VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision making ability. All VIEs with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes.

The Company has concluded, based on the contractual arrangements, that Jiuzhou Pharmacy (including its subsidiaries and controlled entities), Jiuzhou Clinic and Jiuzhou Service are each a VIE and that the Company’s wholly-owned subsidiary, Jiuxin Management, absorbs a majority of the risk of loss from the activities of these companies, thereby enabling the Company, through Jiuxin Management, to receive a majority of their respective expected residual returns.

Additionally, as Jiuzhou Pharmacy, Jiuzhou Clinic and Jiuzhou Service are under common control, the consolidated financial statements have been prepared as if the transactions had occurred retroactively as to the beginning of the reporting period of these consolidated financial statements.

Control and common control is defined under the accounting standards as “an individual, enterprise, or immediate family members who hold more than 50 percent of the voting ownership interest of each entity.” Because the Owners collectively own 100% of Jiuzhou Pharmacy, Jiuzhou Clinic and Jiuzhou Service, and have agreed to vote their interests in concert since the establishment of each of these three companies as memorialized the Voting Rights Proxy Agreement, the Company believes that the Owners collectively have control and common control of the three companies. Accordingly, the Company believes that Jiuzhou Pharmacy, Jiuzhou Clinic and Jiuzhou Service were constructively held under common control by Jiuxin Management as of the time the Contractual Agreements were entered into, establishing Jiuxin Management as their primary beneficiary. Jiuxin Management, in turn, is owned by Renovation, which is owned by the Company.

Although the Company has determined that the accounting standards regarding consolidation of VIEs do not provide for retroactive accounting treatment, Jiuzhou Pharmacy, Jiuzhou Clinic, Jiuzhou Service, and Jiuying Pharmacy in substance were controlled by the Owners on September 9, 2003, October 10, 2003, November 2, 2005 and February 27, 2012, the establishment dates of Jiuzhou Pharmacy, Jiuzhou Clinic, Jiuzhou Service and Jiuying Pharmacy, respectively. Such common control conditions resulted in the share exchange transaction to be a capital transaction in substance, reflected as a recapitalization, and the Company has accordingly recorded the consolidation of Renovation at its historical cost.

Risks and Uncertainties

The operations of the Company are located in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by the political, economic, and legal environments in the PRC, as well as by the general state of the PRC economy. The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political, regulatory and social conditions in the PRC, and by changes in governmental policies or interpretations with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations including its organization and structure disclosed in Note 1, this may not be indicative of future results.

The Company has significant cash deposits with suppliers in order to obtain and maintain inventory. The Company’s ability to obtain products and maintain inventory at existing and new locations is dependent upon its ability to post and maintain significant cash deposits with its suppliers. In the PRC, many vendors are unwilling to extend credit terms for product sales that require cash deposits to be made. The Company does not generally receive interest on any of its supplier deposits, and such deposits are subject to loss as a result of the creditworthiness or bankruptcy of the party who holds such funds, as well as the risk from illegal acts such as conversion, fraud, theft or dishonesty associated with the third party. If these circumstances were to arise, the Company would find it difficult or impossible, due to the unpredictability of legal proceedings in China, to recover all or a portion of the amount on deposit with its vendors or landlords.

Members of the current management team own controlling interests in the Company and are also the Owners of the VIEs in the PRC. The Company only controls the VIEs through contractual arrangements which obligate it to absorb the risk of loss and to receive the residual expected returns. As such, the controlling shareholders of the Company and the VIEs could cancel these agreements or permit them to expire at the end of the agreement terms, as a result of which the Company would not retain control of the VIEs.

Use of estimates

The preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The significant estimates made in the preparation of the accompanying unaudited condensed consolidated financial statements relate to the assessment of the carrying values of accounts receivable and related allowance for doubtful accounts, useful lives of property and equipment, and fair value of purchase option derivative liability. Because of the use of estimates inherent in the financial reporting process, actual results could materially differ from those estimates.

Intangibles other than goodwill

Intangible assets that are acquired individually or as part of a group of assets, are initially recorded at their fair value. The cost of a group of assets acquired in a transaction is allocated to the individual assets based on their relative fair values.

The estimated useful lives of the Company’s intangible assets are as follows:

	Estimated Useful Life
Goodwill	Indefinite
Licenses and permits	Indefinite
Software	3 years

The Company evaluates intangible assets for impairment whenever events or changes in circumstances indicate that the assets might be impaired.

There was no indication of goodwill or other intangible impairment during the three months ended June 30, 2012.

Revenue recognition

Revenue from sales of prescription medicine at the drugstores is recognized when the prescription is filled and the customer picks up and pays for the prescription.

Revenue from sales of other merchandise at the drugstores is recognized at the point of sale, which is when the customer pays for and receives the merchandise.

Revenue from medical services is recognized after the service has been rendered to the customer.

Revenue from sales of merchandise to non-retail customers is recognized when the following conditions are met: (1) persuasive evidence of an arrangement exists (sales agreements and customer purchase orders are used to determine the existence of an arrangement); (2) delivery of goods has occurred and risks and benefits of ownership have been transferred, which is when the goods are received by the customer at its designated location in accordance with the sales terms; (3) the sales price is fixed or determinable; and (4) collectability is probable. Historically, sales returns have been minimal.

The Company’s revenue is net of value added tax (“VAT”) collected on behalf of PRC tax authorities in respect to the sales of merchandise. VAT collected from customers, net of VAT paid for purchases, is recorded as a liability in the accompanying consolidated balance sheets until it is paid to the relevant PRC tax authorities.

Restricted cash

The Company’s restricted cash consists of cash in a bank as security for its notes payable. The Company has notes payable outstanding with the bank and is required to keep certain amounts on deposit that are subject to withdrawal restrictions. The notes payable are generally short term in nature due to their short maturity period of six to nine months; thus, restricted cash is classified as a current asset.

Accounts receivable

Accounts receivable represent amounts due from banks relating to retail sales that are paid or settled by the customers’ debit or credit cards, amounts due from government social security bureaus relating to retail sales of drugs, prescription medicine, and medical services that are paid or settled by the customers’ medical insurance cards, and amounts due from non-retail customers for sales of merchandise.

Accounts receivable are recorded at net realizable value consisting of the carrying amount less an allowance for uncollectible accounts, as needed. In its wholesale and farming business, the Company uses the aging method to estimate the allowance for anticipated uncollectible receivable balances. Under the aging method, bad debt percentages determined by management, based on historical experience and current economic climate, are applied to customers’ balances categorized by the number of months the underlying invoices have remained outstanding. At each reporting period, the allowance balance is adjusted to reflect the amount computed as a result of the aging method. When facts subsequently become available to indicate that the allowance provided requires an adjustment, a corresponding adjustment is made to the allowance account as a change in estimate. In its retail business, accounts receivable mainly consist of reimbursements due from the government insurance bureau and certain commercial health insurance programs and are usually collected within one or two months. The Company directly writes off delinquent account balances, which is determined to be uncollectable after confirming with the government health insurance bureau or commercial health insurance programs, each month.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined using the first in first out (FIFO) method. Market is the lower of replacement cost or net realizable value. The Company carries out physical inventory counts on a monthly basis at each store and warehouse location. Self-cultivated herbs are recorded at its purchase price, which includes direct cost such as seed selection, fertilizer, labor costs and contract fee that are spent in growing herbs on the leased farmland, and indirect cost which includes amortization of farmland development cost. All the costs are accumulated until the time of harvest and then allocated to harvested herbs upon sales. The Company periodically reviews its inventory and records write-downs to inventories for shrinkage losses and damaged merchandise that are identified. Historically, these amounts have not been material to the consolidated financial statements.

Property and equipment

Property and equipment are stated at cost, net of accumulated depreciation or amortization. Depreciation is calculated on the straight-line method over the estimated useful lives of the assets, taking into consideration the assets’ estimated residual value. Leasehold improvements are amortized over the shorter of lease term or remaining lease period of the underlying assets. Following are the estimated useful lives of the Company’s property and equipment:

	Estimated Useful Life
Leasehold improvements	3-10 years
Motor vehicles	5 years
Office equipment & furniture	3-5 years
Buildings	35 years

Maintenance, repairs and minor renewals are charged to expense as incurred. Major additions and betterment to property and equipment are capitalized.

Impairment of long lived assets

The Company evaluates long lived tangible and intangible assets for impairment, whenever events or changes in circumstances indicate that the carrying value may not be recoverable from its estimated future cash flows. Recoverability is measured by comparing the assets’ net book value to the related projected undiscounted cash flows from these assets, considering a number of factors including past operating results, budgets, economic projections, market trends and product development cycles. If the net book value of the asset exceeds the related undiscounted cash flows, the asset is considered impaired, and a second test is performed to measure the amount of impairment loss. There were no impairments of these assets as of June 30, 2012.

Notes payable

During the normal course of business, the Company regularly issues bank acceptance bills as a payment method to settle outstanding accounts payables with various material suppliers. The Company records such bank acceptance bills as notes payables. Such notes payable are generally short term in nature due to their short maturity period of six to nine months.

Income taxes

The Company records income taxes pursuant to the accounting standards for income taxes. These standards require the recognition of deferred income tax liabilities and assets for the expected future tax consequences of temporary differences between income tax basis and financial reporting basis of assets and liabilities. Provision for income taxes consists of taxes currently due and the net change in deferred taxes. A valuation allowance is recognized if it is more likely than not that some portion, or all of, a deferred tax asset will not be realized. As of June 30, 2012 and March 31, 2012, the Company’s deferred tax asset amounted to $345,673 and $0, respectively.

Stock based compensation

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with the FASB’s accounting standards regarding accounting for stock-based compensation and accounting for equity instruments that are issued to other than employees for acquiring or in conjunction with selling goods or services. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably determinable. The value of equity instruments issued for consideration other than employee services is determined on the earlier of a performance commitment or completion of performance by the provider of goods or services as defined by these accounting standards. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.

Advertising and promotion costs

Advertising and promotion costs are expensed as incurred. Advertising and promotion costs amounted to $38,253 and $131,600 for three months ended June 30, 2012 and 2011, respectively. Advertising and promotion costs consist primarily of print and television advertisements.

Foreign currency translation

The Company uses the United States dollar (“U.S. dollars” or “USD”) for financial reporting purposes. The Company’s subsidiaries and VIEs maintain their books and records in their functional currency the Renminbi (“RMB”), the currency of the PRC.

In general, for consolidation purposes, the Company translates the assets and liabilities of its subsidiaries and VIEs into U.S. dollars using the applicable exchange rates prevailing at the balance sheet date, and the statements of income and cash flows are translated at average exchange rates during the reporting period. As a result, amounts related to assets and liabilities reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheet. Equity accounts are translated at historical rates. Adjustments resulting from the translation of the financial statements of the subsidiaries and VIEs are recorded as accumulated other comprehensive income.

The balance sheet amounts, with the exception of equity, at June 30, 2012 and March 31, 2012 were translated at 1 RMB to $0.1582 USD and at 1 RMB to $0.1581 USD, respectively. The average translation rates applied to income and cash flow statement amounts for the three months ended June 30, 2012 and 2011 were at 1 RMB to $0.1580 USD and at 1 RMB to $0.1539 USD, respectively.

Concentrations and credit risk

Certain financial instruments, which subject the Company to concentration of credit risk, consist of cash and restricted cash. The Company has cash balances at financial institutions located in Hong Kong and PRC. Balances at financial institutions in Hong Kong may, from time to time, exceed Hong Kong Deposit Protection Board’s insured limits. Balances at financial institutions and state-owned banks within the PRC are not covered by insurance. As of June 30, 2012 and March 31, 2012, the Company had deposits totaling $4,850,298 and $6,268,508 that were not covered by insurance, respectively. To date, the Company has not experienced any losses in such accounts.

For the three months ended June 30, 2012, two vendors collectively accounted for approximately 34% of the Company’s total purchases and one vendor collectively accounted for 21% of total advances to suppliers. For the three months ended June 30, 2011, three vendors collectively accounted for 40% of the Company’s total purchases and 14% of total advances to suppliers.

For the three months ended June 30, 2012, two customers accounted for approximately 27% of the Company’s total sales while three customers collectively accounted for 36% of total accounts receivable. For the three months ended June 30, 2011, no customer accounted for more than 10% of the Company’s total sales or accounts receivable.

Noncontrolling interest

As of June 30, 2012, 1% of the equity interests of Shanghai Zhongxing was owned by Shanghai Bieyanghong Grand Pharmacy Co., Ltd. and not under the Company's control.

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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthenticals) (USD $)	Jun. 30, 2012	Mar. 31, 2012
Statement Of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	13,628,658	13,589,621
Common stock, shares outstanding	13,628,658	13,589,621

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RELATED PARTY TRANSACTIONS AND ARRANGEMENTS

3 Months Ended

Jun. 30, 2012

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS AND ARRANGEMENTS

Note 12 – RELATED PARTY TRANSACTIONS AND ARRANGEMENTS

Amounts receivable from and payable to related parties are summarized as follows:

	June 30, 2012		March 31, 2012
Due to cofounders (1):	$	880,058	$	880,058
Due to director (2):		678,461		578,383
Total	$	1,558,519	$	1,458,441

(1) As of June 30, 2012 and 2011, amount due to cofounders represents contributions from the Owners to Jiuxin Management to enable Jiuxin Management to meet its approved PRC registered capital requirements.

(2) Due to foreign exchange restrictions, Mr. Lei Liu personally lent U.S. dollars to the Company to facilitate its payments of expenses in the United States.

As of June 30, 2012 and March 31, 2012, notes payable totaling $5,611,915 and $4,208,928 were secured by the personal properties of certain of the Company’s shareholders, respectively.

One of the Company’s retail spaces and its corporate office are leased from Mr. Lei Liu, a director of the Company, under long-term operating lease agreements from August 2010 to August 2012 and from January 2011 to December 2012, respectively. The rent expense amounted to $47,400 and $46,170 for the three months ended June 30, 2012 and 2011, respectively. Rent paid to Mr. Liu amounted to $0 for both the three months ended June 30, 2012 and 2011.

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Document and Entity Information	3 Months Ended
	Jun. 30, 2012	Aug. 14, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	CHINA JO-JO DRUGSTORES, INC.
Entity Central Index Key	0001413263
Trading Symbol	cjjd
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Current Fiscal Year End Date	--03-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		13,571,553
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Amendment Flag	false
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1

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PURCHASE OPTION DERIVATIVE LIABILITY

3 Months Ended

Jun. 30, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

PURCHASE OPTION DERIVATIVE LIABILITY

Note 13 – PURCHASE OPTION DERIVATIVE LIABILITY

In connection with the public offering of the Company’s common stock that closed on April 28, 2010, the Company issued to its underwriters, Madison Williams and Company and Rodman & Renshaw, LLC, an option for $100 to purchase up to a total of 105,000 shares of common stock (3% of the shares sold in the public offering) at $6.25 per share (125% of the price of the shares sold in the public offering). The option is exercisable commencing on October 23, 2010 and expires on April 22, 2015.

The Company is treating the common shares underlying the option as a derivative liability as the strike price of the option is denominated in U.S. dollars, a currency other than the Company’s functional currency, the Chinese RMB. As a result, the option is not considered indexed to the Company’s own stock, and as such, all future changes in the fair value of the option are recognized currently in earnings until such time as the option is exercised or expired.

On April 22, 2010, the issue date of the option, the Company classified the fair value of this option as a liability resulting in a decrease of additional paid-in capital of $402,451 and the establishment of a $402,451 in liability to recognize the option’s fair value. The Company recognized a loss of $158 from the change in fair value of the option liability for the three months ended June 30, 2012, and recognized a gain of $62,632 from the change in fair value of the option liability for the three months ended June 30, 2011.

This option does not trade in an active securities market, and as such, the Company estimates its fair value using the Black-Scholes Option Pricing Model (the “Black-Scholes Model”) on the date that the option was originally issued and as of June 30, 2012 using the following assumptions:

	Underwriter Purchase Option
	June 30, 2012 (1)
Stock price		$	1.37
Exercise price		$	6.25
Annual dividend yield			0	%
Expected term (years)			2.81
Risk-free interest rate			0.39	%
Expected volatility			92.60	%

(1) As of June 30, 2012, the option to purchase 105,000 shares of common stock had not been exercised.

Expected volatility is based on historical volatility. Historical volatility is computed using daily pricing observations for recent periods that correspond to the term of the option. The Company believes this method produces an estimate that is representative of future volatility over the expected term of this option. The expected life is based on the remaining term of the option. The risk-free interest rate is based on U.S. Treasury securities according to the remaining term of the option.

Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Depending on the product and the terms of the transaction, the fair values of option liability are modeled using a series of techniques, including closed-form analytic formula such as the Black-Scholes Model, which does not entail material subjectivity because the methodology employed does not necessitate significant judgment, and the pricing inputs are observed from actively quoted markets.

The fair value of the 105,000 shares underlying the option outstanding as of June 30, 2012 was determined using the Black-Scholes Model, with certain inputs significant to the valuation methodology as level 2 inputs, and the Company recorded the change in fair value in earnings. As a result, the option liability is carried on the consolidated balance sheets at fair value.

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME (UNAUDITED) (USD $)	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Income Statement [Abstract]
REVENUES, NET	$ 32,847,330	$ 21,427,859
COST OF GOODS SOLD	27,702,553	14,558,536
GROSS PROFIT	5,144,777	6,869,323
SELLING EXPENSES	1,858,225	1,378,300
GENERAL AND ADMINISTRATIVE EXPENSES	2,846,578	1,074,783
TOTAL OPERATING EXPENSES	4,704,803	2,453,083
INCOME FROM OPERATIONS	439,974	4,416,240
OTHER INCOME (EXPENSE), NET	98,698	19,420
CHANGE IN FAIR VALUE OF PURCHASE OPTION DERIVATIVE LIABILITY	(158)	62,632
INCOME BEFORE INCOME TAXES	538,514	4,498,292
PROVISION FOR INCOME TAXES	3,882	1,255,563
NET INCOME	534,632	3,242,729
ADD: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST	255
NET INCOME ATTRIBUTABLE TO CHINA JO-JO DRUGSTORES, INC.	534,887	3,242,729
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustments	55,270	574,565
COMPREHENSIVE INCOME	$ 590,157	$ 3,817,294
WEIGHTED AVERAGE NUMBER OF SHARES:
Basic (in shares)	13,557,496	13,532,240
Diluted (in shares)	13,598,686	13,532,240
EARNINGS PER SHARES:
Basic (in dollars per share)	$ 0.04	$ 0.24
Diluted (in dollars per share)	$ 0.04	$ 0.24

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LONG TERM DEPOSITS, LANDLORDS

3 Months Ended

Jun. 30, 2012

Long Term Deposits, Landlords [Abstract]

LONG TERM DEPOSITS, LANDLORDS

Note 7 – LONG TERM DEPOSITS, LANDLORDS

Long term deposits are money deposited with or advanced to landlords for securing retail store leases for which the Company does not anticipate applying or being returned within the next twelve months. Most of the Company’s landlords require a minimum of nine months’ rent being paid upfront plus additional deposits.

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ADVANCES TO SUPPLIERS

3 Months Ended

Jun. 30, 2012

Advances To Suppliers [Abstract]

ADVANCES TO SUPPLIERS

Note 6 – ADVANCES TO SUPPLIERS

Advances to suppliers consist of deposits with or advances to outside vendors for future inventory purchases. Most of the Company’s vendors require a certain amount of money to be deposited with them as a guarantee that the Company will receive its purchase on a timely basis. This amount is refundable and bears no interest. As of June 30, 2012 and March 31, 2012, the allowance for advances to suppliers amounted to $1,385,201 and $1,029,413, respectively.

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SUBSEQUENT EVENT

3 Months Ended

Jun. 30, 2012

Subsequent Events [Abstract]

SUBSEQUENT EVENT

Note 18 – SUBSEQUENT EVENTS

In July 2012, we applied for and were granted permission by the local State Administration for Industry & Commerce ("SAIC") to reduce Shouantang Technology’s required registered capital from $20 million $11 million. As a result, we no longer need to pay the remaining additional $9 million in previously required registered capital for Shouantang Technology.

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STOCKHOLDER'S EQUITY

3 Months Ended

Jun. 30, 2012

Stockholders Equity Note [Abstract]

STOCKHOLDER'S EQUITY

Note 14 – STOCKHOLDER’S EQUITY

Common stock

On April 9, 2010, the Company affected a 1-for-2 reverse split of its issued and outstanding shares of common stock and a proportional reduction of its authorized shares of common stock. All share and per share amounts used in the Company’s unaudited condensed consolidated financial statements and accompanying notes have been retroactively restated to reflect the 1-for-2 reverse stock split.

On April 28, 2010, the Company closed a public offering of 3.5 million shares of common stock at $5.00 per share with gross proceeds of approximately $17.5 million.

Stock-based compensation

On May 1, 2010, the Company agreed to issue 6,000 shares of common stock to Mr. Ming Zhao as partial payment for compensation. On August 1, 2011, the Company appointed Mr. Ming Zhao as its chief financial officer, and in connection therewith, entered into an agreement pursuant to which the Company agreed to issue to Mr. Zhao 40,000 shares of restricted common stock under the Plan, to be vested in eight equal quarterly installments over two years. The trading values of the Company’s common stock on May 1, 2010 and August 1, 2011 were $4.80 and $1.70, respectively. Accordingly, $8,500 was charged to general and administrative expense for the three months ended June 30, 2012.

On May 14, 2010, the Company entered into an agreement pursuant to which the Company agreed to issue 14,000 shares of restricted common stock in connection with the services of Mr. Bennet P. Tchaikovsky as chief financial officer through April 27, 2011, upon the adoption of a stock incentive plan (the “Plan”). On August 1, 2011, the Company entered into an agreement pursuant to which the Company agreed to issue 4,613 shares of restricted common stock under the Plan in connection with Mr. Tchaikovsky’s services as chief financial officer from April 28, 2011 to August 1, 2011. On August 1, 2011, the Company appointed Mr. Tchaikovsky to its Board of Directors, and in connection therewith, entered into an agreement pursuant to which the Company agreed to issue to Mr. Tchaikovsky 5,883 shares of its restricted common stock under the Plan, of which 3,917 shares were vested for the year ended March 31, 2012. The trading values of the Company’s common stock on May 14, 2010, April 28, 2011, and August 1, 2011 were $4.66, $2.71, and $1.70, respectively. Accordingly, $2,501 was charged to general and administrative expense for the three months ended June 30, 2012.

On November 1, 2010, the Company agreed to issue 2,340 shares of common stock to its legal counsel as partial payment for six months of legal services. On both May 1, 2011 and November 1, 2011, the Company agreed to issue additional 2,340 shares of common stock to its legal counsel as partial payment for two consecutive six months of legal services. The terms of the service agreement was continued on May 1, 2012, and 2,340 shares of restricted common stock were issued accordingly. The trading value of the Company’s common stock on May 1, 2011, November 1, 2011, May 1, 2011 and November 1, 2010 were $1.07, $1.66, $2.71 and $5.00, respectively. $1,467 was recorded as service compensation expense for the three months ended June 30, 2012.

On March 15, 2011, the Company agreed to issue 11,268 shares of restricted common stock to Mr. Marc Serrio, a non-executive director, for his annual service. The terms of the service agreement was continued on March 15, 2012, and 33,058 shares of restricted common stock were issued accordingly. The trading value of the Company’s common stock on March 15, 2012 and 2011 was $1.21 and $3.55, respectively. Accordingly, $9,973 and $9,973 were charged to general and administrative expense three months ended June 30, 2012 and 2011, respectively.

On January 16, 2012, the Company granted a total of 297,000 shares of restricted common stock under the Plan to a group of 46 employees. These restricted shares will vest on January 16, 2015, provided that the employees are still employed by the Company on such date. $19,399 and $7,936 were charged to general and administrative expense and selling expense respectively for the three months ended June 30, 2012.

Statutory reserve

Statutory reserves represent restricted retained earnings. Based on their legal formation, the Company is required to set aside 10% of its net income as reported in their statutory accounts on an annual basis to the Statutory Surplus Reserve Fund (the “Reserve Fund”). Once the total amount set aside in the Reserve Fund reaches 50% of the entity’s registered capital, further appropriations become discretionary. The Reserve Fund can be used to increase the entity’s registered capital upon approval by relevant government authorities or eliminate its future losses under PRC GAAP upon a resolution by its board of directors. The Reserve Fund is not distributable to shareholders, as cash dividend or otherwise, except in the event of liquidation.

Appropriations to the Reserve Fund are accounted for as a transfer from unrestricted earnings to statutory reserves. During the three months ended June 30, 2012 and 2011, the Company did not make appropriations to the statutory reserves. The other subsidiaries were still in the development stage and had not allocated any contribution to the statutory surplus reserve fund.

There are no legal requirements in the PRC to fund the Reserve Fund by transfer of cash to any restricted accounts, and the Company does not do so.

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TAXES

3 Months Ended

Jun. 30, 2012

Tax Disclosure [Abstract]

TAXES

Note 10 – TAXES

Income tax

The Company is subject to income taxes on an entity basis on income arising in or derived from the tax jurisdiction in which each entity is domiciled.

Entity	Income Tax Jurisdiction
Jo-Jo Drugstores	United States
Renovation	Hong Kong
All other entities	PRC

The following table reconciles the U.S. statutory tax rates with the Company's effective tax rate for the three months ended June 30, 2012 and 2011:

	For the three months ended June 30,
	2012			2011
U.S. Statutory rates		34.0	%		34.0	%
Foreign income not recognized in the U.S.		(34.0	)		(34.0	)
China income taxes		25.0			25.0
Exemption rendered by local tax authorities (1)		(25.0	)		-
Other (2)		0.7			3.0
Effective tax rate		0.7	%		28.0	%

(1) Qianhong Agriculture enjoyed income tax waiver as an agriculture company since its start in 2010.  

(2) The 0.7% and 3.0% for the three months ended June 30, 2012 and 2011, respectively, represent expenses incurred by the Company that were not deductible for PRC income tax.

Jo-Jo Drugstores is incorporated in the U.S. and incurred a net operating loss for income tax purposes for 2010. As of June 30, 2012, the estimated net operating loss carryforwards for U.S. income tax purposes amounted to $1,331,000 which may be available to reduce future years’ taxable income. These carryforwards will expire, if not utilized by 2031. Management believes that the realization of the benefits arising from this loss appears to be uncertain due to the Company’s limited operating history and continuing losses for U.S. income tax purposes. Accordingly, the Company has provided a 100% valuation allowance at June 30, 2012. The net change in the valuation allowance for the three months ended June 30, 2012 and 2011 was an increase of approximately $42,000 and $61,000, respectively. Management reviews this valuation allowance periodically and makes adjustments as necessary.

The Company had cumulative undistributed earnings of foreign subsidiaries of approximately $34 million as of June 30, 2012, which are included in consolidated retained earnings and will continue to be indefinitely reinvested in international operations. Accordingly, no provision has been made for U.S. deferred taxes related to future repatriation of these earnings.

Taxes payable at June 30, 2012 and March 31, 2012 consisted of the following:

	June 30, 2012		March 31, 2012
VAT	$	505,657	$	435,390
Income tax		7,403		7,240
Others		24,180		26,976
Total taxes payable	$	537,240	$	469,606

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RELATED PARTY TRANSACTIONS AND ARRANGEMENTS (Details) (USD $)	Jun. 30, 2012		Mar. 31, 2012
Related Party Transaction [Line Items]
Other payables - related parties	$ 1,558,519		$ 1,458,441
Cofounders
Related Party Transaction [Line Items]
Other payables - related parties	880,058	[1]	880,058	[1]
Director
Related Party Transaction [Line Items]
Other payables - related parties	$ 678,461	[2]	$ 578,383	[2]

[1] As of June 30, 2012 and 2011, amount due to cofounders represents contributions from the Owners to Jiuxin Management to enable Jiuxin Management to meet its approved PRC registered capital requirements.

[2] Due to foreign exchange restrictions, Mr. Lei Liu personally lent U.S. dollars to the Company to facilitate its payments of expenses in the United States.

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OTHER NONCURRENT ASSETS

3 Months Ended

Jun. 30, 2012

Other Assets, Noncurrent Disclosure [Abstract]

OTHER NONCURRENT ASSETS

Note 8 – OTHER NONCURRENT ASSETS

Other noncurrent assets consisted of the following:

	June 30, 2012		March 31, 2012
Prepayment for lease of land use right – noncurrent (1)	$	5,498,679	$	5,533,500
Lease rights transfer fees-noncurrent (2)		142,619		243,167
Total	$	5,641,298	$	5,776,667

(1)	This is a payment made to a local government in connection with entering into a 30-year operating land lease agreement.
(2)	Lease rights transfer fees are paid by the Company to secure store rentals in coveted areas. These additional costs of acquiring the right to lease new store locations are capitalized and amortized over the period of the initial lease term.

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INTANGIBLE ASSETS

3 Months Ended

Jun. 30, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

Note 9 – INTANGIBLE ASSETS

Net intangible assets consisted of the following at:

	June 30, 2012			March 31, 2012
Goodwill on acquisition of Jiuxin Medicine	$	1,402,651		$	1,401,451
Goodwill on acquisition of Shanghai Zhongxing		69,609			69,549
Licenses and permits		1,096,729			1,095,792
Software		462,217			461,820
Total goodwill and other intangible assets		3,031,206			3,028,612
Less: accumulated amortization		(250,367	)		(211,667	)
Intangible assets, net	$	2,780,839		$	2,816,945

Amortization expense of intangibles for the three months ended June 30, 2012 and 2011 amounted to $38,450 and $37,463, respectively.

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POSTRETIREMENT BENEFITS

3 Months Ended

Jun. 30, 2012

Compensation and Retirement Disclosure [Abstract]

POSTRETIREMENT BENEFITS

Note 11 – POSTRETIREMENT BENEFITS

Regulations in the PRC require the Company to contribute to a defined contribution retirement plan for all permanent employees. The contribution for each employee is based on a percentage of the employee’s current compensation as required by the local government. The Company contributed $164,146 and $80,763 in employment benefits and pension for the three months ended June 30, 2012 and 2011, respectively.

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STOCKHOLDER'S EQUITY (Details Textuals) (Common Stock, USD $) In Millions, except Per Share data, unless otherwise specified	0 Months Ended	1 Months Ended
	Apr. 09, 2010	Apr. 28, 2010
Common Stock
Stockholders Equity [Line Items]
Reverse stock split conversion ratio	1-for-2
Number of shares sold in public offering (in shares)		3.5
Public offering, price per share (in dollars per share)		$ 5.00
Gross proceeds from sale of public offering		$ 17.5

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STOCKHOLDER'S EQUITY (Details Textuals 2)	3 Months Ended
	Jun. 30, 2012
Stockholders Equity Note [Abstract]
Percentage of net income set aside by subsidiaries and VIEs in PRC	10.00%
Threshold limit for total amount set aside in the Reserve Fund of registered capital by subsidiaries and VIEs in PRC	50.00%

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PURCHASE OPTION DERIVATIVE LIABILITY (Details Textuals) (USD $)	1 Months Ended	3 Months Ended			1 Months Ended
	Apr. 22, 2010	Jun. 30, 2012		Jun. 30, 2011	Apr. 28, 2010 Stock option	Jun. 30, 2012 Stock option
Schedule of Trading Securities and Other Trading Assets [Line Items]
Option issued to purchase common stock					$ 100
Number of option issued to underwriters (in shares)					105,000
Percent shares sold in public offering					3.00%
Exercise price (in dollars per share)		$ 6.25	[1]		$ 6.25	$ 6.25
Percent price of shares sold in public offering					125.00%
Option as a liability decrease in additional paid-in capital	402,451
Liability recognize option's fair value	402,451
Gain (loss) on change in fair value option		$ 158		$ 62,632
Fair valuation techniques		Black-Scholes Option Pricing Model

[1] As of June 30, 2012, the option to purchase 105,000 shares of common stock had not been exercised.

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PURCHASE OPTION DERIVATIVE LIABILITY (Tables)

3 Months Ended

Jun. 30, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of fair value assumption

	Underwriter Purchase Option
	June 30, 2012 (1)
Stock price		$	1.37
Exercise price		$	6.25
Annual dividend yield			0	%
Expected term (years)			2.81
Risk-free interest rate			0.39	%
Expected volatility			92.60	%

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ADVANCES TO SUPPLIERS (Details Textuals) (USD $)	Jun. 30, 2012	Mar. 31, 2012
Advances To Suppliers [Abstract]
Allowance for advances to suppliers	$ 1,385,201	$ 1,029,413

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SEGMENTS

3 Months Ended

Jun. 30, 2012

Segment Reporting [Abstract]

SEGMENTS

Note 16 – SEGMENTS

The Company operates within three main reportable segments: retail drugstores, drug wholesale and Chinese herbs farming. The retail drugstores segment sells prescription and over-the-counter medicines, TCM, dietary supplement, medical devices, and sundry items to retail customers. The drug wholesale segment supplies the retail drugstores and sells prescription and over-the-counter medicines, TCM, dietary supplement, medical devices and sundry items in batch to other drug vendors and hospitals. The Company’s herbal plant cultivation is included in the Chinese herbs farming segment, which cultivates selected Chinese herbs and mainly sells to other drug vendors. The Company is also involved in online pharmacy and clinic services that do not meet the quantitative thresholds for reportable segments and are included in the retail segment.

The segments' accounting policies are the same as those described in the summary of significant accounting policies. The Company evaluates performance based on profit or loss from operations before interest and income taxes not including nonrecurring gains and losses.

The Company's reportable business segments are strategic business units that offer different products and services. Each segment is managed separately because they require different operation and markets to distinct classes of customers.

The following table presents summarized information by segment:

	Retail Drugstores			Drug Wholesale			Chinese herbs Farming		Total
Revenue	$	8,954,456		$	21,368,783		$	2,524,091	$	32,847,330
Cost of goods		6,629,003			20,843,901			229,649		27,702,553
Gross profit	$	2,325,453		$	524,882		$	2,294,442	$	5,144,777
Income from operations	$	(1,054,834	)	$	(660,597	)	$	2,155,405	$	439,974
Depreciation and amortization	$	466,939		$	136,168		$	7,759	$	610,866
Total capital expenditures	$	215,910		$	544		$	-	$	216,454
Total assets	$	45,945,587		$	31,224,760		$	6,574,386	$	83,744,733

The Company does not have long-lived assets located outside the PRC. In accordance with the enterprise-wide disclosure requirements of FASB’s accounting standard, the Company's net revenue from external customers through its retail stores by main products is as follows:

	Three months ended June 30,
	2012		2011
Prescription Drugs	$	4,036,867	$	9,721,466
Over-The-Counter (OTC) Drugs		2,626,267		6,283,486
Nutritional Supplements		829,286		2,192,635
Traditional Chinese Medicine (TCM)		866,701		2,576,311
Sundry Products		222,939		306,407
Medical Devices		372,396		347,554
Total	$	8,954,456	$	21,427,859

The Company’s net revenue from external customers through wholesales by main products is as follows:

	Three months ended June 30,
	2012		2011
Prescription Drugs	$	12,720,261	$	-
Over-The-Counter (OTC) Drugs		4,533,073		-
Nutritional Supplements		4,108,594		-
Traditional Chinese Medicine (TCM)		2,866		-
Sundry Products		1,082		-
Medical Devices		2,907		-
Total	$	21,368,783	$	-

The Company’s net revenue from external customers through Chinese herbs farming by main products is as follows:

	Three months ended June 30,
	2012		2011
Prescription Drugs	$	-	$	-
Over-The-Counter (OTC) Drugs		-		-
Nutritional Supplements		-		-
Traditional Chinese Medicine (TCM)		2,524,091		-
Sundry Products		-		-
Medical Devices		-		-
Total	$	2,524,091	$	-

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Jun. 30, 2012

Accounting Policies [Abstract]

Schedule of estimated useful lives of intangible assets

	Estimated Useful Life
Goodwill	Indefinite
Licenses and permits	Indefinite
Software	3 years

Schedule of estimated useful lives of property and equipment

	Estimated Useful Life
Leasehold improvements	3-10 years
Motor vehicles	5 years
Office equipment & furniture	3-5 years
Buildings	35 years

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PROPERTY AND EQUIPMENT (Details) (USD $)	Jun. 30, 2012	Mar. 31, 2012
Property, Plant and Equipment [Line Items]
Total	$ 20,074,379	$ 17,762,962
Less: Accumulated depreciation	(5,392,040)	(4,814,490)
Construction-in-progress	712,059	2,698,648
PROPERTY AND EQUIPMENT, net	15,394,398	15,647,120
Building
Property, Plant and Equipment [Line Items]
Total	1,110,876	1,109,926
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total	13,512,482	11,423,330
Office equipment and furniture
Property, Plant and Equipment [Line Items]
Total	5,029,675	4,808,721
Motor vehicles
Property, Plant and Equipment [Line Items]
Total	$ 421,346	$ 420,985

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (Software)	3 Months Ended
	Jun. 30, 2012
Software
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible asset, useful life	3 years

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $)	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 534,632	$ 3,242,729
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	610,866	262,181
Stock-based compensation	49,758	28,058
Bad debt expense	1,114,673	54,691
Change in fair value of purchase option derivative liability	158	(62,632)
Changes in operating assets:
Accounts receivable, trade	(7,712,451)	(438,521)
Notes receivable	(926,315)
Inventories	(526,099)	1,000,520
Other receivables	(236,873)	(132,648)
Advances to suppliers	(2,859,522)	1,947,720
Other current assets	17,561	3,879,255
Long term deposit	355,151	(153,900)
Other noncurrent assets	140,067	84,061
Changes in operating liabilities:
Accounts payable, trade	5,201,905	2,093,048
Other payables and accrued liabilities	650,956	(409,861)
Customer deposit	695,089	(1,490,217)
Taxes payable	67,114	7,809
Net cash (used in) provided by operating activities	(2,823,330)	9,912,293
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(216,454)	(37,760)
Payments on leasehold improvements and construction-in-progress	(90,313)	(3,489,692)
Deposit made to secure business acquisition		(4,745,968)
Net cash used in investing activities	(306,767)	(8,273,420)
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in restricted cash	1,410,499	248,687
Payments on notes payable		(2,006,702)
Increase in notes payable	1,396,914
Proceeds from other payables-related parties	99,996
Net cash (used in) provided by financing activities	2,907,409	(1,758,015)
EFFECT OF EXCHANGE RATE ON CASH	10,604	77,346
DECREASE IN CASH	(212,084)	(41,796)
CASH, beginning of period	3,833,216	6,489,905
CASH, end of period	3,621,132	6,448,109
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes	14,713	1,157,526
Non-cash investing activities
Transfer from construction in progress to property and equipment	1,985,391
Non-cash financing activities
Notes payable transferred to vendors		$ 1,542,619

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PROPERTY AND EQUIPMENT

3 Months Ended

Jun. 30, 2012

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

Note 5 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	June 30, 2012			March 31, 2012
Building	$	1,110,876		$	1,109,926
Leasehold improvements		13,512,482			11,423,330
Office equipment and furniture		5,029,675			4,808,721
Motor vehicles		421,346			420,985
Total		20,074,379			17,762,962
Less: Accumulated depreciation		(5,392,040	)		(4,814,490	)
Construction-in-progress		712,059			2,698,648
Property and equipment, net	$	15,394,398		$	15,647,120

Construction-in-progress, as of June 30, 2012, includes leasehold improvements in progress at the newly leased store locations. Construction of such leasehold improvements is expected to be finished within one year. The stores currently undergoing such remodeling are currently not in operation. No depreciation is provided for construction-in-progress until such time as the assets are completed and placed into service.

Total depreciation expense for property and equipment was $572,416 and $224,718 for the three months ended June 30, 2012 and 2011, respectively.

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TAXES (Details Textuals) (USD $)	3 Months Ended
	Jun. 30, 2012		Jun. 30, 2011
Tax Disclosure [Abstract]
Effective income tax rate nondeductible expense, other	0.70%	[1]	3.00%	[1]
Net operating loss carryforwards	$ 1,331,000
Percentage of the valuation allowance recorded	100.00%
Change in valuation allowance, net	42,000		61,000
Cumulative undistributed earnings (in millions)	$ 34

[1] The 0.7% and 3.0% for the three months ended June 30, 2012 and 2011, respectively, represent expenses incurred by the Company that were not deductible for PRC income tax.

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SEGMENTS (Details) (USD $)	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Mar. 31, 2012
Segment Reporting Information [Line Items]
Revenue	$ 32,847,330	$ 21,427,859
Cost of goods	27,702,553	14,558,536
Gross profit	5,144,777	6,869,323
Income from operations	439,974	4,416,240
Depreciation and amortization	610,866	262,181
Total capital expenditures	216,454	37,760
Total assets	83,744,733		74,961,013
Retail Drugstores
Segment Reporting Information [Line Items]
Revenue	8,954,456
Cost of goods	6,629,003
Gross profit	2,325,453
Income from operations	(1,054,834)
Depreciation and amortization	466,939
Total capital expenditures	215,910
Total assets	45,945,587
Drug Wholesale
Segment Reporting Information [Line Items]
Revenue	21,368,783
Cost of goods	20,843,901
Gross profit	524,882
Income from operations	(660,597)
Depreciation and amortization	136,168
Total capital expenditures	544
Total assets	31,224,760
Chinese herbs Farming
Segment Reporting Information [Line Items]
Revenue	2,524,091
Cost of goods	229,649
Gross profit	2,294,442
Income from operations	2,155,405
Depreciation and amortization	7,759
Total assets	$ 6,574,386

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TRADE ACCOUNTS RECEIVABLE (Tables)

3 Months Ended

Jun. 30, 2012

Accounts Receivable, Net [Abstract]

Schedule of trade accounts receivable

	June 30, 2012			March 31, 2012
Accounts receivable	$	24,558,283		$	16,817,801
Less: allowance for doubtful accounts		(920,886	)		(301,130	)
Trade accounts receivable, net	$	23,637,397		$	16,516,671

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DESCRIPTION OF BUSINESS AND ORGANIZATION (Details)	Jun. 30, 2012 Renovation HK	Jun. 30, 2012 Jiuxin Management USD ($)	Jun. 30, 2012 Shouantang Technology	Jun. 30, 2012 Shouantang Technology Previously Reported USD ($)	Jun. 30, 2012 Shouantang Technology Adjusted USD ($)	Jun. 30, 2012 Qianhong Agriculture CNY	Jun. 30, 2012 Quannuo Technology CNY	Jun. 30, 2012 Hangzhou Quannuo CNY	Jun. 30, 2012 Tonglu Lydia CNY	Jun. 30, 2012 Jiuzhou Pharmacy CNY		Jun. 30, 2012 Jiuzhou Service CNY		Jun. 30, 2012 Shanghai Lydia CNY		Jun. 30, 2012 Jiuxin Medicine CNY		Jun. 30, 2012 Shanghai Zhongxing CNY		Jun. 30, 2012 Jiutong Medical USD ($)	Jun. 30, 2012 Jiuying Pharmacy CNY
Schedule Of Activities Of Company and Affiliates [Line Items]
Percentage of ownership held in subsidiary	100.00%	100.00%	100.00%			100.00%	100.00%	100.00%	100.00%											100.00%
Registered capital		$ 4,500,000		$ 20,000,000	$ 11,000,000	10,000,000	10,000,000	800,000	5,000,000	5,000,000	[1],[2]	500,000	[1],[2]	1,000,000	[2]	10,000,000	[2]	1,000,000	[2]	$ 5,000,000	5,000,000	[3]
Registered and Paid - up capital																				2,000,000
Unpaid capital																				$ 3,000,000

[1] Jiuzhou Pharmacy,Jiuzhou Clinic and Jiuzhou Service have been under the common control of the Owners since their respective establishment dates, pursuant to agreements amongst the Owners to vote their interests in concert as memorialized in a voting agreement. Based on such voting agreement, the Company has determined that common control exists among these three companies in accordance with generally accepted accounting standards. Operationally, the Owners have operated these three companies in conjunction with one another since each company's respective establishment date. Shanghai Lydia, Shanghai Zhongxing and Jiuxin Medicine are also deemed under the common control of the Owners as they are each a subsidiary of Jiuzhou Pharmacy.

[2] To comply with certain foreign ownership restrictions of pharmacy and medical clinic operators, Jiuxin Management entered into a series of contractual arrangements with Jiuzhou Pharmacy, Jiuzhou Clinic and Jiuzhou Service on August 1, 2009. These contractual arrangements are comprised of five agreements: consulting services agreement, operating agreement, equity pledge agreement, voting rights agreement and option agreement. As a result of these agreements, which obligate Jiuxin Management to absorb all of the risks of loss from the activities of Jiuzhou Pharmacy, Jiuzhou Clinic and Jiuzhou Service, and enable the Company (through Jiuxin Management) to receive all of their expected residual returns, the Company accounts for all three companies (as well as the two subsidiaries of Jiuzhou Pharmacy) as a variable interest entity ("VIE") under the accounting standards of the Financial Accounting Standards Board ("FASB"). Accordingly, the financial statements of Jiuzhou Pharmacy, Jiuzhou Clinic and Jiuzhou Service, as well as the subsidiaries and entity under the control of Jiuzhou Pharmacy (Shanghai Lydia, Jiuxin Medicine and Shanghai Zhongxing), are consolidated into the financial statements of the Company.

[3] To comply with foreign ownership restrictions, the Company holds 49% of the equity interest (39% through Shouantang Technology and 10% through Jiuxin Management). The remaining 51% is held by the Owners but controlled by the Company through contractual arrangements between Jiuxin Management and Jiuying Pharmacy entered into on May 15, 2012. Such contractual arrangements are identical to those that Jiuxin Management entered into with Jiuzhou Pharmacy, Jiuzhou Clinic and Jiuzhou Service. As such, the Company also accounts for Jiuying Pharmacy as a VIE and consolidates its financial statements into those of the Company.

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EARNINGS PER SHARE

3 Months Ended

Jun. 30, 2012

Earnings Per Share [Abstract]

EARNINGS PER SHARE

Note 15 – EARNINGS PER SHARE

The Company reports earnings per share in accordance with the provisions of the FASB’s related accounting standard. This standard requires presentation of basic and diluted earnings per share in conjunction with the disclosure of the methodology used in computing such earnings per share. Basic earnings per share excludes dilution, but includes vested restricted stocks and is computed by dividing income available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock.

The following is a reconciliation of the basic and diluted earnings per share computation:

	Three months ended
	June 30,
	2012		2011
Net income attributable to controlling interest	$	534,887	$	3,242,729
Weighted average shares used in basic computation		13,557,496		13,532,240
Diluted effect of restricted shares		41,190		-
Weighted average shares used in diluted computation		13,598,686		13,532,240
Earnings per share – Basic:
Net income before noncontrolling interest	$	0.04	$	0.24
Add: Net loss attributable to noncontrolling interest	$	0.00	$	-
Net income attributable to controlling interest	$	0.04	$	0.24
Earnings per share – Diluted:
Net income before noncontrolling interest	$	0.04	$	0.24
Add: Net loss attributable to noncontrolling interest	$	0.00	$	-
Net income attributable to controlling interest	$	0.04	$	0.24

For the three months ended June 31, 2012 and 2011, 105,000 shares underlying outstanding purchase options were excluded from the diluted earnings per share calculation as they are anti-dilutive.