10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2020

or

☐ 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.)
Hai Wai Hai Tongxin Mansion Floor 6 Gong Shu District, Hangzhou City Zhejiang Province P. R. China	310008
(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)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.001 par value	CJJD	NASDAQ Capital Market

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 ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 ☐

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

Large Accelerated Filer	☐	Accelerated Filer	☐
Non-accelerated filer	þ	Smaller reporting company	þ
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of August 13, 2020, the registrant had 37,961,790 shares of common stock outstanding.

TABLE OF CONTENTS

TO QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2020

		Page
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Unaudited condensed consolidated balance sheets as of June 30, 2020 and March 31, 2020	1
	Unaudited condensed consolidated statements of operations and comprehensive income (loss) for the three months ended June 30, 2020 and 2019	2
	Unaudited condensed consolidated statements of changes in stockholders’ equity for the three months ended June 30, 2020 and 2019	3
	Unaudited condensed consolidated statements of cash flows for the three months ended June 30, 2020 and 2019	4
	Notes to unaudited condensed consolidated financial statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	41
PART II	OTHER INFORMATION
Item 6.	Exhibits	42
Signatures		43

i

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

All statements contained in this Quarterly Report on Form 10-Q (“Form 10-Q”) for the registrant, other than statements of historical facts, that address future activities, events or developments are forward-looking statements, including, but not limited to, statements containing the words “believe,” “anticipate,” “expect” and words of similar import. These statements are based on certain assumptions and analyses made by us in light of our experience and our assessment of historical trends, current conditions and expected future developments as well as other factors we believe are appropriate under the circumstances. However, whether actual results will conform to the expectations and predictions of management is subject to a number of risks and uncertainties that may cause actual results to differ materially.

Such risks include, among others, the following: national and local general economic and market conditions: our ability to sustain, manage or forecast our growth; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other factors referenced in this and previous filings.

Consequently, all of the forward-looking statements made in this Form 10-Q are qualified by these cautionary statements and there can be no assurance that the actual results anticipated by management will be realized or, even if substantially realized, that they will have the expected consequences to or effects on our business operations.

ii

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	June 30,			March 31,
	2020			2020
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	18,477,212		$	16,176,318
Restricted cash		15,095,116			14,806,288
Financial assets available for sale		157,644			157,159
Notes receivable		28,290			57,005
Trade accounts receivable		8,984,595			9,770,656
Inventories		11,141,411			12,247,004
Other receivables, net		5,599,565			5,069,442
Advances to suppliers		2,237,720			1,174,800
Other current assets		1,835,927			1,528,540
Total current assets		63,557,480			60,987,212
PROPERTY AND EQUIPMENT, net		7,095,690			7,633,740
OTHER ASSETS
Long-term investment		3,963,758			2,544,451
Farmland assets		752,257			742,347
Long term deposits		1,447,547			1,456,384
Other noncurrent assets		1,049,184			1,046,763
Operating lease right-of-use assets		19,351,247			21,711,376
Intangible assets, net		3,358,407			3,393,960
Total other assets		29,922,400			30,895,281
Total assets	$	100,575,570		$	99,516,233
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Short-term bank loan		2,121,720			1,410,130
Accounts payable, trade		16,107,594			21,559,494
Notes payable		26,715,374			26,605,971
Other payables		2,176,992			2,522,330
Other payables - related parties		491,300			490,218
Customer deposits		795,903			708,140
Taxes payable		328,237			119,247
Accrued liabilities		672,469			753,612
Long-term loan payable-current portion		2,300,271			2,287,742
Current portion of operating lease liabilities		466,213			981,090
Total current liabilities		52,176,073			57,437,974
Long-term loan payable		3,551,507			4,115,958
Long-term operating lease liabilities		16,917,159			19,049,575
Employee Deposits		14,145			70,507
Purchase option and warrants liability		68,980			64,090
Total liabilities		72,727,864			80,738,104
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Common stock; $0.001 par value; 250,000,000 shares authorized; 37,961,790 and 32,936,786 shares issued and outstanding as of June 30, 2020 and March 31, 2020		37,962			32,937
Preferred stock; $0.001 par value; 10,000,000 shares authorized; nil issued and outstanding as of June 30 and March 31, 2020		-			-
Additional paid-in capital		63,568,876			54,209,301
Statutory reserves		1,309,109			1,309,109
Accumulated deficit		(36,632,346	)		(36,400,837	)
Accumulated other comprehensive income		1,533,993			1,440,424
Total stockholders’ equity		29,817,594			20,590,934
Noncontrolling interests		(1,969,888	)		(1,812,805	)
Total equity		27,847,706			18,778,129
Total liabilities and stockholders’ equity	$	100,575,570		$	99,516,233

The accompanying notes are an integral part of these condensed consolidated financial statements.

1

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

	For the three months ended June 30,
	2020			2019
REVENUES, NET	$	31,054,312		$	25,280,784
COST OF GOODS SOLD		23,074,093			19,219,346
GROSS PROFIT		7,980,219			6,061,438
SELLING EXPENSES		6,272,407			5,968,551
GENERAL AND ADMINISTRATIVE EXPENSES		2,120,166			2,851,612
TOTAL OPERATING EXPENSES		8,392,573			8,820,163
LOSS FROM OPERATIONS		(412,354	)		(2,758,725	)
OTHER INCOME (EXPENSE):
INTEREST INCOME		163,588			47,873
INTEREST EXPENSE		(127,387	)		-
OTHER		50,021			(62,485	)
CHANGE IN FAIR VALUE OF PURCHASE OPTION AND WARRANTS LIABILITY		(4,890	)		403,555
LOSS BEFORE INCOME TAXES		(331,022	)		(2,369,782	)
PROVISION FOR INCOME TAXES		57,570			8,388
NET LOSS		(388,592	)		(2,378,170	)
LESS: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST		(157,083	)		(243,219	)
NET LOSS ATTRIBUTABLE TO CHINA JO-JO DRUGSTORES, INC.		(231,509	)		(2,134,951	)
OTHER COMPREHENSIVE LOSS
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS		93,569			(405,238	)
COMPREHENSIVE LOSS		(295,023	)		(2,783,408	)
WEIGHTED AVERAGE NUMBER OF SHARES:
Basic		34,428,271			32,453,269
Diluted		34,428,271			32,453,269
LOSS PER SHARES:
Basic	$	(0.01	)	$	(0.07	)
Diluted	$	(0.01	)	$	(0.07	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED)

												Accumulated
	Common Stock				Additional		Retained Earnings					other			Non-
	Number of				Paid-in		Statutory		Accumulated			comprehensive			controlling
	shares		Amount		capital		reserves		deficit			income/(loss)			interest			Total
BALANCE, March 31, 2019.		28,936,778		28,937		44,905,664		1,309,109		(30,587,468	)		2,508,964			(1,194,039	)		16,971,167
Stock based compensation		-		-		34,560		-		-			-			-			34,560
Sale of stock and warrants		4,000,008		4,000		9,269,077		-		-			-			-			9,273,077
Net loss		-		-		-		-		(2,134,951	)		-			(243,219	)		(2,378,170	)
Foreign currency translation loss		-		-		-		-		-			(403,620	)					(403,620	)
BALANCE, June 30, 2019.		32,936,786		32,937		54,209,301		1,309,109		(32,722,419	)		2,105,344			(1,437,258	)		23,497,014
BALANCE, March 31, 2020.		32,936,786		32,937		54,209,301		1,309,109		(36,400,837	)		1,440,424			(1,812,805	)		18,778,129
Exercise of warrants		25,000		25		77,475		-		-			-			-			77,500
Sale of stock and warrants		5,000,004		5,000		9,282,100		-		-			-			-			9,287,100
Net loss		-		-		-		-		(231,509	)		-			(157,083	)		(388,592	)
Foreign currency translation loss		-		-		-		-		-			93,569						93,569
BALANCE, June 30, 2020.		37,961,790		37,962		63,568,876		1,309,109		(36,632,346	)		1,533,993			(1,969,888	)		27,847,706

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the three months ended June 30,
	2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(388,592	)	$	(2,378,170	)
Adjustments to reconcile net income to net cash provided by operating activities:
Bad debt direct write-off and provision		18,320			758,231
Depreciation and amortization		760,540			499,175
Stock based compensation		-			34,560
Change in fair value of purchase option derivative liability		4,890			(403,555	)
Accounts receivable, trade		444,672			(959,680	)
Notes receivable		28,824			81,326
Inventories and biological assets		1,140,697			2,851,652
Other receivables		(293,466	)		371,054
Advances to suppliers		(952,166	)		242,652
Other current assets		(583,285	)		(450,042	)
Long term deposit		13,299			58,630
Other noncurrent assets		806			(8,631	)
Accounts payable, trade		(5,505,493	)		(8,968,168	)
Other payables and accrued liabilities		(435,365	)		(105,522	)
Customer deposits		85,379			116,398
Taxes payable		182,583			95,326
Net cash used in operating activities		(5,478,357	)		(8,164,764	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Disposal of financial assets available for sale		-			14,658
Acquisition of equipment		(10,536	)		(210,356	)
Increase in intangible assets		(19,474	)		(433,111	)
Investment in a joint venture		(1,408,155	)		-
Additions to leasehold improvements		(159,272	)		(542,734	)
Net cash used in investing activities		(1,597,437	)		(1,171,543	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term bank loan		705,585			-
Repayment of  third parties loan		(570,338	)		-
Proceeds from notes payable		14,392,242			15,372,260
Repayment of notes payable		(14,364,978	)		(16,167,012	)
Decrease in Employee Deposits		(56,447	)		-
Exercise of warrants		77,500			-
Proceeds from equity financing		9,287,100			9,273,077
Repayment of other payables-related parties		-			(460,000	)
Net cash provided by financing activities		9,470,664			8,018,325
EFFECT OF EXCHANGE RATE ON CASH		194,852			(277,067	)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		2,589,722			(1,595,049	)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period		30,982,606			24,745,202
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, end of period	$	33,572,328		$	23,150,153
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest		127,387			-
Cash paid for income taxes	$	-		$	29,176

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

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) are, 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”), Hangzhou Jiuyi Medical Technology Co. Ltd. (“Jiuyi Technology”), its wholly-owned subsidiaries.

The Company is an online and offline retailer and wholesale distributor of pharmaceutical and other healthcare products in the People’s Republic of China (“China” or the “PRC”). The Company’s offline retail business is comprised primarily of pharmacies, which are operated by Hangzhou Jiuzhou Grand Pharmacy Chain Co., Ltd. (“Jiuzhou Pharmacy”), a company that the Company controls through contractual arrangements. On March 31, 2017, Jiuxin Management established a subsidiary, Lin’An Jiuzhou Pharmacy Co., Ltd (“Lin’An Jiuzhou”) to operates drugstores in Lin’an City.

On January 9, 2020, in order to continue expanding and strengthening its local drugstore network, the Company acquired a local drugstores chain with ten stores at a price of $0.14 (RMB 1). The acquired chain agreed to cease their stores’ business and liquidate all of the stores ‘accounts after Jiuzhou Pharmacy acquired them. In March 2020, the chain was dissolved and its government insurance reimbursement certificates have been transferred to Jiuzhou Pharmacy.

The Company’s offline retail business also includes four 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. In May 2014, Shouantang Technology established Hangzhou Shouantang Bio-technology Co., Ltd. (“Shouantang Bio”). In May 2016, Shouantang Bio set up and held 49% of Hangzhou Kahamadi Bio-technology Co., Ltd.(“Kahamadi Bio”), a joint venture specializing in brand name development for nutritional supplements. In 2018, Jiuzhou Pharmacy invested a total of $741,540 (RMB5,100,000) in and held 51% of Zhejiang Jiuzhou Linjia Medical Investment and Management Co. Ltd (“Linjia Medical”), which operates two new clinics in Hangzhou as of March 31, 2020. On March 29, 2019, Jiuzhou Pharmacy formed and currently holds 51% of the equity of Zhejiang AyiGe Medical Health Management Co., Ltd.(“Ayi Health”), which is intended to provide technical support such as IT and customer support to our health management business in the future.

The Company currently conducts its online retail pharmacy business through Jiuzhou Pharmacy, which holds the Company’s online pharmacy license. On September 10, 2015, Renovation set up Jiuyi Technology to provide additional technical support such as webpage development to our online pharmacy business. In November 2015, the technical support function was transferred back to Jiuzhou Pharmacy, which hosts our online pharmacy.

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. On April 20, 2018, 10% of Jiuxin Medicine shares were sold to Hangzhou Kangzhou Biotech Co. Ltd. for a total proceeds of $79,625 (RMB 507,760).

The Company’s herb farming business is conducted by Hangzhou Qianhong Agriculture Development Co., Ltd. (“Qianhong Agriculture”), a wholly-owned subsidiary of Jiuxin Management. Due to the complexity of the cultivation business, Qianhong Agriculture has not grown herbs in the three months ended June 30, 2020. 

5

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

Entity Name	Background	Ownership
Renovation	●     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 $14.5 million 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 million fully paid   ●     Carries out herb farming business	100%
Jiuzhou Pharmacy (1)	●     Established in the PRC on September 9, 2003 ●     Registered capital of RMB 5 million fully paid   ●     Operates the “Jiuzhou Grand Pharmacy” stores in Hangzhou	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)
Jiuxin Medicine	●     Established in PRC on December 31, 2003 ●     Acquired by Jiuzhou Pharmacy in August 2011 ●     10% of shares sold On April 20, 2018  ●     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)
Jiutong Medical	●     Established in the PRC on December 20, 2011 by Renovation ●     Registered capital of $2.6 million fully paid   ●     Currently has no operation	100%

6

Entity Name	Background	Ownership
Shouantang Bio	●     Established in the PRC in October, 2014 by Shouantang Technology  ●     100% held by Shouantang Technology  ●     Registered capital of RMB 1,000,000 fully paid ●     Sells nutritional supplements under its own brand name	100%
Jiuyi Technology	●     Established in the PRC on September 10, 2015 ●     100% held by Renovation  ●     Technical support to online pharmacy	100%
Kahamadi Bio	●     Established in the PRC in May 2016 ●     49% held by Shouantang Bio ●     Registered capital of RMB 10 million ●     Develop brand name for nutritional supplements	49%
Lin’An Jiuzhou	●     Established in the PRC in March 31, 2017 ●     100% held by Jiuxin Management ●     Registered capital of RMB 5 million ●     Explore retail pharmacy market in Lin’An City	100%
Linjia Medical	●     Established in the PRC in September27, 2017 ●     51% held by Jiuzhou Pharmacy ●     Registered capital of RMB 20 million ●     Operates local clinics	VIE by contractual arrangements as a controlled subsidiary of Jiuzhou Pharmacy (2)
Ayi Health	●     Established in the PRC in March 29, 2019 ●     51% held by Jiuzhou Pharmacy ●     Registered capital of RMB 10 million ●     Provide technical Support for medial service	VIE by contractual arrangements as a controlled subsidiary of Jiuzhou Pharmacy (2)

(1)

Jiuzhou Pharmacy, Jiuzhou Clinic and Jiuzhou Service had been under the common control of Mr. Lei Liu   and Ms. Li Qi, the three shareholders (the “Owners”) since their respective establishment dates, pursuant to agreements among the Owners to vote their interests in concert as memorialized in a voting rights agreement. Based on such voting agreement, the Company has determined that common control exists among these three companies. The Owners have operated these three companies in conjunction with one another since each company’s respective establishment date. Jiuxin Medicine is also deemed under the common control of the Owners as 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: a consulting services agreement, operating agreement, equity pledge agreement, voting rights agreement and option agreement. Because such agreements 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 each of the three companies (as well as 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 under the control of Jiuzhou Pharmacy, Jiuxin Medicine and Shouantang Bio are consolidated into the financial statements of the Company.

7

Note 2 – LIQUIDITY

The Company’s accounts have been prepared in accordance with the accounting principles generally accepted in the United States of America (“US GAAP”) on a going concern basis. The going concern basis assumes that assets are realized and liabilities are extinguished in the ordinary course of business at amounts disclosed in the financial statements. The Company’s ability to continue as a going concern depends upon aligning its sources of funding (debt and equity) with its expenditure requirements and repayment of the short-term debts as and when they become due.

The drug retail business is a highly competitive industry in the PRC. Several large drugstore chains and a variety of single stores operate in Hangzhou City and Zhejiang Province. In order to increase the Company’s competitive advantages and gain more local retail pharmacy market share, from fiscal year 2018, we opened fifty-nine new stores in Hangzhou. As a result, the Company incurred significant incremental expense related to rental, labor hiring and training, and marketing activities. As the retail pharmaceutical market becomes more competitive in recent years, a new store usually cannot make profit in its operation until a year later. In fact, the Company incurred significant expenses with limited incremental revenue in the period it opened new stores. At their openings, except for four stores, almost all of the new stores were without government insurance reimbursement certificates. In fact, it usually takes more than one year for a new store to apply for and obtain the local government insurance reimbursement certificate. As of June 30, 2020, the Company had obtained forty-seven reimbursement certificates for stores opened in fiscal 2018 and thereafter. Historically in a mature store, more than half of the total revenue were collected from the individual customers’ government insurance program. The Company is in the process of actively applying certificates for all of its new stores. In the future, as more and more stores obtain certificates, the Company expect its new store revenue to increase and eventually contribute positive operating cash flow.

The Company’s principal sources of liquidity consist of existing cash, equity financing, bank facilities from local banks as well as personal loans from its principal shareholders if necessary. On April 15, 2019, the Company closed a registered direct offering of 4,000,008 shares of common stock at $2.50 per share with gross proceeds of $10,000,020 from its effective shelf registration statement on Form S-3 pursuant to a Securities Purchase Agreement dated April 11, 2019 (the “2019 Securities Purchase Agreement”), by and among the Company and the investors named therein. On June 3, 2020, the Company closed a registered direct offering of 5,000,004 shares of common stock at $2.00 per share with gross proceeds of $10,000,008 from its effective shelf registration statement on Form S-3 pursuant to a Securities Purchase Agreement dated June 1, 2020 (the “2020 Securities Purchase Agreement”), by and among the Company and the investors named therein.

The Company has a credit line agreement from a local bank as displayed in detail in Note 16. As of June 30, 2020, approximately $0.74 million of the aforementioned bank credit line was available for further borrowing. Additionally, Jiuzhou Pharmacy obtained a credit line of approximately $7,175,000 (RMB50,000,000) from Haihui Commercial Factoring (Tianjin) Co. Ltd. (“Haihui Commercial”) for three years beginning July 26, 2019. As of June 30, 2020, the full amount has been borrowed from Haihui Commercial. Any borrowing thereunder is guaranteed by a third-party guarantor company, and secured by the Company’s assets pursuant to a collateral agreement, as well as personal guarantees of some of its principal shareholders.

The Company has also obtained additional government insurance reimbursement certificates for its stores opened in the last two years. As the sales reimbursed from the government account for more than half of sales in a mature store, the certificates may significantly increase the sales of these stores in the next 12 months. Additionally, with the proceeds from the registered direct financing closed on April 15, 2019 and June 3, 2020, and increased credit line, the Company believes it can support its operations for at least the next 12 months.

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Note 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation and consolidation

The accompanying condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The consolidated financial statements include the financial statements of the Company, its wholly-owned 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.

Control and common control are 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 in the voting rights 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.  

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 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. 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 suppliers.

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 consolidated financial statements in conformity with US GAAP 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 consolidated financial statements relate to the assessment of the carrying values of accounts receivable, advances to suppliers and related allowance for doubtful accounts, useful lives of property and equipment, inventory reserve and fair value of its purchase option derivative liability. Because of the use of estimates inherent in the financial reporting process, actual results could materially differ from those estimates.

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Fair value measurements

The Company establishes a three-level valuation hierarchy of valuation techniques based on observable and unobservable inputs, which may be used to measure fair value and include the following:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement.

The Company’s financial assets and liabilities, which include financial instruments as defined by FASB ASC 820, include cash and cash equivalents, restricted cash, financial assets available for sales, accounts receivable, notes receivables, other receivable, accounts payable, notes payable, other payable, long-term debt and derivatives. The carrying amounts of cash and cash equivalents, restricted cash, accounts receivable, notes receivables, and accounts payable are a reasonable approximation of fair value due to the short maturities of these instruments (Level 1). The carrying amount of notes payable approximates fair value based on borrowing rates of similar bank loan currently available to the Company (Level 2) (See Note 16). The carrying amount of Long-term loan payable approximates fair value based on borrowing rates of similar bank loan currently available to the Company (Level 2) (See Note 17).The carrying amount of the Company’s derivative instruments is recorded at fair value and is determined based on observable inputs that are corroborated by market data (Level 2) (See Note 21). The carrying amount of the financial assets available for sale is recorded at fair value and is determined based on unobservable inputs (Level 3) (See Note 4). The carrying amount of the employee deposits is recorded at fair value and is determined based on unobservable inputs (Level 3) (See Note 22).

	Active Market for Identical Assets (Level 1)		Observable Inputs (Level 2)		Unobservable Inputs (Level 3)		Total Carrying Value
Cash, cash equivalents and restricted cash	$	33,572,328		-		-		33,572,328
Financial assets available for sale		-		-		157,644		157,644
Account receivable		8,984,595		-		-		8,984,595
Notes receivable		28,290		-		-		28,290
Other receivable		5,599,565		-		-		5,599,565
Accounts payable		16,107,594		-		-		16,107,594
Notes payable		-		26,715,374		-		26,715,374
Other payable		2,176,992		-		-		2,176,992
Long-term loan payable		-		5,851,778		-		5,851,778
Employee Deposits		-		-		14,145		14,145
Warrants liability		-		68,980		-		68,980
Total	$	66,469,364		32,636,132		171,789		99,277,285

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Revenue recognition

Effective March 31, 2018, the Company began recognizing revenue under Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), using the modified retrospective transition method. The impact of adopting the new revenue standard was not material to the Company’s consolidated financial statements. The core principle of this new revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

● Step 1: Identify the contract with the customer

● Step 2: Identify the performance obligations in the contract

● Step 3: Determine the transaction price

● Step 4: Allocate the transaction price to the performance obligations in the contract

● Step 5: Recognize revenue when the company satisfies a performance obligation

In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met:

● The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct).

● The entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).

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If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct.

The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, some sales taxes). The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate.

The Company’s revenue is net of value added tax (“VAT”) collected on behalf of the PRC tax authorities with 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.

Certain contract liabilities primarily represent the Company’s obligation to transfer additional goods or services to a customer for which the Company has received consideration, for example, membership points. The consideration received remains a contract liability until goods or services have been provided to the retail customer. The estimated amount based on accrued membership points was deducted from sales revenue.

The following is a discussion of the Company’s revenue recognition policies by segment under the new revenue recognition accounting standard:

Pharmacy retail sales

The physical pharmacies sell prescription drugs, over-the-counter (“OTC”) drugs, traditional Chinese medicine, nutritional supplements, medical devices and sundry products. Revenue from sales of prescription medicine at 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 drugstores is recognized at the point of sale, which is when a customer pays for and receives the merchandise. Usually the majority merchandise, such as prescription and OTC drugs, are not refundable after the customers leave the counter. Returns of other products, such as sundry products, are minimal. Sales of drugs reimbursed by the local government medical insurance agency and receivables from the agency are recognized when a customer pays for the drugs at a store. The Company based on historical experience, a reserve for potential losses from denial of reimbursement on certain unqualified drugs is made to the receivables from the government agency. Additionally, several onsite clinics adjacent to pharmacies provide limited medical services. Revenue from medical services is recognized after the service has been rendered to a customer. As revenue from medical services is minimal compared to pharmacy retail sales, it is included as part of the pharmacy retail sales.

The Company deduct the membership rewards directly from the retail revenue, and present such amounts in net sales as opposed to the current reduction of operation expense classification. Membership rewards, usually membership points, are accumulated by customers based on their historical spending levels. The Company has determined that there is an additional performance obligation to those customers at the time of the initial transaction. The customers can then redeem these points against the prices of merchandises they purchase in the future. At the end of each period, unredeemed membership rewards are reflected as a contract liability.

Online pharmacy sales

The online pharmacy segment sells various health products except for prescription drugs. Revenue from online pharmacy sales is recognized when merchandise is shipped to customers. While most deliveries take one day, certain deliveries may take longer depending on a customer’s location. Any loss caused in a shipment will be reimbursed by the Company’s courier company. The Company’s sales policy allows for the return of certain merchandises without reason within seven days after a customer’s receipt of the applicable merchandise. Historically, sales returns seven days after merchandise receipts have been minimal.

Wholesale

Jiuxin Medicine purchases medicine in quantity and distributes products primarily to local pharmacies and medical products dealers. Revenue from sales of merchandise to non-retail customers is recognized when the merchandise is transferred to customers. Historically, sales returns have been minimal.

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Disaggregation of Revenue

The following table disaggregates the Company’s revenue by major source in each segment for the three months ended June 30, 2020 and 2019:

For the three  months ended June 30	2020		2019
Retail drugstores
Prescription drugs	$	7,406,774	$	5,695,286
OTC drugs		6,818,484		7,240,228
Nutritional supplements		1,347,769		1,231,133
TCM		949,012		1,104,050
Sundry products		422,551		298,198
Medical devices		1,865,884		1,166,093
Total retail revenue	$	18,810,474	$	16,734,988
Online pharmacy
Prescription drugs	$	1,869,643	$	-
OTC drugs		1,322,811		1,024,602
Nutritional supplements		221,031		107,194
TCM		23,199		13,681
Sundry products		546,720		438,736
Medical devices		929,430		859,392
Total online revenue	$	4,912,834	$	2,443,605
Drug wholesale
Prescription drugs	$	5,966,148	$	4,880,491
OTC drugs		915,146		1,074,261
Nutritional supplements		59,841		21,691
TCM		28,967		98,828
Sundry products		2,597		5,682
Medical devices		358,305		21,238
Total wholesale revenue	$	7,331,004	$	6,102,191
Total revenue	$	31,054,312	$	25,280,784

Contract Balances

Contract liabilities primarily represent the Company’s obligation to transfer additional goods or services to a customer for which the Company has received consideration, for example membership points and membership rewards. The consideration received remains a contract liability until goods or services have been provided to the retail customer.

The following table provides information about receivables and contract liabilities from contracts with customers:

	June 30, 2020		March 31, 2020
Trade receivable(included in accounts receivable, net)	$	8,984,595	$	9,770,656
Contract liabilities (included in accrued expenses)		1,112,508		1,106,982

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Restricted cash

The Company’s restricted cash consists of cash and long-term deposits 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.

The following represents a reconciliation of cash and cash equivalents in the Consolidated Condensed Balance Sheets to total cash, cash equivalents and restricted cash in the Consolidated Condensed Statements of Cash Flows as of June 30, 2020 and March 31, 2020:

	June 30, 2020		March 31, 2020
Cash and cash equivalents	$	18,477,212	$	16,176,318
Restricted cash		15,095,116		14,806,288
Cash, cash equivalents and restricted cash	$	33,572,328	$	30,982,606

Accounts receivable

Accounts receivable represents the following: (1) amounts due from banks relating to retail sales that are paid or settled by the customers’ debit or credit cards, (2) amounts due from government social security bureaus and commercial health insurance programs relating to retail sales of drugs, prescription medicine, and medical services that are paid or settled by the customers’ medical insurance cards, (3) amounts due from non-bank third party payment instruments such as Alipay and certain e-commerce platforms and (4) 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 necessary. In the Company’s retail business, accounts receivable mainly consist of reimbursements due from the government insurance bureaus and commercial health insurance programs and are usually collected within two or three months. The Company directly writes off delinquent account balances, which it determines to be uncollectible after confirming with the appropriate bureau or program each month. Additionally, the Company also makes estimated reserves on related outstanding accounts receivable based on historical trends.

In the Company’s online pharmacy business, accounts receivable primarily consist of amounts due from non-bank third party payment instruments such as Alipay and certain e-commerce platforms. To purchase pharmaceutical products from an e-commerce platforms such as Tmall, customers are required to submit payment to certain non-bank third party payment instruments, such as Alipay, which, in turn, reimburse the Company within seven days to a month. Except for customer returns of sold products, the receivables from these payments instruments are rarely uncollectible.

In its wholesale business, the Company uses the aging method to estimate the allowance for anticipated uncollectible receivable balances. Under the aging method, bad debt percentages are determined by management, based on historical experience and the 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.

Advances to suppliers

Advances to suppliers consist of prepayments to its vendors, such as pharmaceutical manufacturers and other distributors. Since the acquisition of Jiuxin Medicine, the Company have transferred almost all logistics services of its retail drugstores to Jiuxin Medicine. Jiuzhou Pharmacy only directly purchases certain non-medical products, such as certain nutritional supplements. As a result, almost all advances to suppliers are made by Jiuxin Medicine.

Advances to suppliers for its drug wholesale business consist of prepayments to its vendors, such as pharmaceutical manufacturers and other distributors. The Company typically receive products from vendors within three to nine months after making prepayments. The Company continuously monitor delivery from, and payments to, its vendors while maintaining a provision for estimated credit losses based upon historical experience and any specific supplier issues, such as discontinuing of inventory supply, that have been identified.

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Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first in first out (FIFO) method. The Company carries out physical inventory counts on a monthly basis at each store and warehouse location. Herbs that the Company farms are recorded at their cost, which includes direct costs such as seed selection, fertilizer, labor costs that are spent in growing herbs on the leased farmland, and indirect costs such as amortization of farmland development cost. All costs are accumulated until the time of harvest and then allocated to harvested herbs costs when the herbs are sold. The Company periodically reviews its inventory and records write-downs to inventories for shrinkage losses and damaged merchandise that are identified. The Company provides a reserve for estimated inventory obsolescence or excess quantities on hand equal to the difference, if any, between the cost of the inventory and its estimated realizable value.

Farmland assets

Herbs that the Company farms are recorded at their cost, which includes direct costs such as seed selection, fertilizer, and labor costs that are spent in growing herbs on the leased farmland, and indirect costs such as amortization of farmland development costs. Since April 2014, amortization of farmland development costs has been expensed instead of allocated into inventory due to unpredictable future market value of planted gingko trees.

All related costs described in the above are accumulated until the time of harvest and then allocated to harvested herbs when they are sold.

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	3-5 years
Office equipment & furniture	3-5 years
Buildings	35 years

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

Intangible assets

Intangible assets are acquired individually or as part of a group of assets, and 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
Land use rights	50 years
Software	3 years
License	Infinite

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

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 fixed assets and farmland assets impaired for the three months ended June 30, 2020 and 2019.

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 payable. Such notes payable are generally short term in nature due to their short maturity period of six to nine months.

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Income taxes

The Company accounts for income taxes following the liability method pursuant to FASB ASC 740 “Income Taxes”. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rate is recognized in income in the period that includes the enactment date.

The Company also follows FASB ASC 740, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance on recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. As of June 30, 2020 and March 31, 2020, the Company did not have a liability for unrecognized tax benefits. It is the Company’s policy to include penalties and interest expense related to income taxes as a component of other expense and interest expense, respectively, as necessary. The Company’s historical tax years will remain open for examination by the local authorities until the statute of limitations has passed.

Under ASC 740-270, entities calculate the income tax provision for an interim period by distinguishing between elements recognized in the income tax provision through (1) applying an estimated annual effective tax rate (ETR) to a measure of year-to-date operating results referred to as “ordinary income (or loss),” and (2) discretely recognizing specific events (referred to as “discrete items”) as they occur. Entities should revise the ETR, as necessary, as of the end of each successive interim period during its fiscal year based on changes to any of these estimates and judgments.

The ETR expected to apply for the full fiscal year is applied to year-to-date ordinary income (or loss) at the end of each interim period to compute the year-to-date income tax (or benefit) applicable to ordinary income or loss. Income tax expense (or benefit) related to each discrete item is individually determined and recognized in the interim period when the discrete item occurs. As a result, the income tax provision (or benefit) for an interim period might include elements that apply to ordinary income or loss, as well as elements related to discrete items. Discrete items include significant items that are unusual or that occur infrequently. Determining which items are unusual or infrequent often requires a significant degree of judgment.

Under ASC 740-270-30-36, entities subject to income taxes in multiple jurisdictions should apply one overall ETR instead of separate ETRs for each jurisdiction when calculating the interim-period income tax or benefit related to consolidated ordinary income (or loss) for the year-to-date interim period, except in certain circumstances. The income tax provision or benefit for each interim period is the difference between the year-to-date amount for the current period and the year-to-date amount for the prior period.

Value added tax

Sales revenue represents the invoiced value of goods, net of VAT. All of the Company’s products are sold in the PRC and are subject to a VAT on the gross sales price. The VAT rates range up to 17%, depending on the type of products sold. The VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing or acquiring its finished products. The Company recorded a VAT payable net of payments in the accompanying financial statements.

Stock based compensation

The Company follows the provisions of FASB ASC 718, “Compensation — Stock Compensation,” which establishes accounting standards for non-employee and employee stock-based awards. Under the provisions of FASB ASC 718, the fair value of stock issued is used to measure the fair value of services received as the Company believes such approach is a more reliable method of measuring the fair value of the services. For non-employee stock-based awards, fair value is measured based on the value of the Company’s common stock on the date that the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete. The fair value of the equity instrument is calculated and then recognized as compensation expense over the requisite performance period. For employee stock-based awards, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense with graded vesting on a straight–line basis over the requisite service period for the entire award.

Advertising and promotion costs

Advertising and promotion costs are expensed as incurred and amounted to $77,068 and $80,049 for the three months ended June 30, 2020 and 2019, respectively. Such costs consist primarily of print and promotional materials such as flyers to local communities.

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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, 2020 and at March 31, 2020 were translated at 1 RMB to 0.1414 USD and at 1 RMB to 0.1410 USD, respectively. The average translation rates applied to income and cash flow statement amounts for the three months ended June 30, 2020 and 2019 were at 1 RMB to 0.1411 USD and at 1 RMB to 0.1466 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. Since March 31, 2015, balances at financial institutions and state-owned banks within the PRC are covered by insurance up to RMB 500,000 (USD 72,800) per bank. As of June 30, 2020 and March 31, 2020, the Company had deposits totaling $24,279,528 and $30,974,714 that were covered by such limited insurance, respectively. Any balance over RMB 500,000 (USD 72,800) per bank in PRC will not be covered. To date, the Company has not experienced any losses in such accounts.

For the three months ended June 30, 2020, two vendors accounted for 35.0% of the Company’s total purchases and two vendors accounted for more than 10% of total advances to suppliers. For the three months ended June 30, 2019, two vendors accounted for 49.2% of the Company’s total purchases and two vendors accounted for more than 10% of total advances to suppliers.

For the three months ended June 30, 2020, no customer accounted for more than 10% of the Company’s total sales and more than 10% of total accounts receivable. For the three months ended June 30, 2019, no customer accounted for more than 10% of the Company’s total sales or more than 10% of total accounts receivable.

Leases

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). Lessees are required to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). The liability is equal to the present value of lease payments. The asset is based on the liability, subject to certain adjustments, such as for initial direct costs. For income statement purposes, a dual model was retained, requiring leases to be classified as either operating or finance leases. Operating leases result in straight-line expense (similar to operating leases under the prior accounting standard) while finance leases result in a front-loaded expense pattern (similar to capital leases under the prior accounting standard). Lessor accounting is similar to the prior model, but updated to align with certain changes to the lessee model (e.g., certain definitions, such as initial direct costs, have been updated) and the new revenue standard, ASU 2014-9.

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The Company adopted this new accounting standard on April 1, 2019 on a modified retrospective basis and applied the new standard to all leases through a cumulative-effect adjustment to beginning retained earnings. As a result, comparative financial information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which includes, among other things, the ability to carry forward the existing lease classification. On April 1, 2019, the Company recorded an after-tax transition adjustment to increase retained earnings by approximately $422,354. The new standard had a material impact on the unaudited condensed consolidated balance sheet, but did not materially impact the Company’s consolidated operating results and had no impact on the Company’s cash flows. The following is a discussion of the Company’s lease policy under the new lease accounting standard:

The Company determines if an arrangement contains a lease at the inception of a contract. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of the remaining future minimum lease payments. As the interest rate implicit in the Company’s leases is not readily determinable, the Company utilizes its incremental borrowing rate, determined by class of underlying asset, to discount the lease payments. The operating lease right-of-use assets also include lease payments made before commencement and exclude lease incentives.

The Company leases premises for retail drugstores, and offices under non-cancellable operating leases. Operating lease payments are expensed over the term of lease using straight line method. A majority of the Company’s retail drugstore leases have a 3 to 10 year term. Usually within one to three months prior to the expiration date of a lease, the Company is required to notify the lessor and has a priority to continue renting the lease property if a lessor intends to lease property. The lease itself does not have restriction or covenants. If both parties agree to continue, a new lease contract with new lease terms has to been signed by both parties. Usually the rent may increase year by year based on the lease contract. Sublease is typically not allowed. Any damage, if made by the lessee, to the property and equipment within the property has to been fixed or reimbursed by the lessee. The Company does not have any leases entered into but which have not yet commenced. The Company has historically been able to renew a majority of its drugstores leases. The weighted average remaining lease term is 3.2 years and the weighted average discount rate is 4.19%. Under the terms of the lease agreements, the Company has no legal or contractual asset retirement obligations at the end of the leases. See Note 14 “Leases” for additional information.

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Recent Accounting Pronouncements

Accounting pronouncements adopted

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” providing financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. For public business entities that are U.S. Securities and Exchange Commission (SEC) filers, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The FASB has voted to defer the effective date for public companies that are smaller reporting companies to fiscal years beginning after December 15, 2022. All entities may adopt the amendments in this Update earlier as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the impact of the adoption of ASU 2016-13 on our consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13 Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement, which eliminates, adds, and modifies certain disclosure requirements for fair value measurements under ASC 820. This ASU is to be applied on a prospective basis for certain modified or new disclosure requirements, and all other amendments in the standard are to be applied on a retrospective basis. The new standard is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted. ASU 2018-13 has no impact on its consolidated financial statements.

 In January 2017, the FASB issued ASU No. 2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”), which removes Step 2 from the goodwill impairment test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. Public business entity that is a U.S. Securities and Exchange Commission filer should adopt the amendments in this ASU for its annual or any interim goodwill impairment test in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted ASU 2017-04 on January 1, 2020. The adoption of the ASU 2017-04 did not have a material impact on the Company’s consolidated financial statements.

Accounting pronouncements not yet effective to adopt

In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes” (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 will simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company does not expect that the requirements of ASU 2019-12 will have a material impact on its consolidated financial statements.

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Note 4 – FINANCIAL ASSETS AVAILABLE FOR SALE

As of June 30, 2020 and March 31, 2020, financial assets available for sale amounted to $157,644 (RMB 1,114,500) and $157,159 (RMB 1,114,500), respectively. As of June 30, 2020, the fair value of an investment in a limited partner (LP) in a private equity fund (PE fund), which is intended to invest in retail pharmaceutical business, is $72,551 (RMB514,500). Additionally, the Company has invested in Inner Mongolia Songlu Pharmaceutical Co.(“Songlu Pharmaceutical”). As of June 30, 2020, the fair value of the investment is $84,608 (RMB600,000), which accounts for 0.5% shares of Songlu Pharmaceutical.

Note 5 – TRADE ACCOUNTS RECEIVABLE

Trade accounts receivable consisted of the following:

	June 30, 2020			March 31, 2020
Accounts receivable	$	11,378,909		$	12,034,726
Less: allowance for doubtful accounts		(2,394,314	)		(2,264,070	)
Trade accounts receivable, net	$	8,984,595		$	9,770,656

For the three months ended June 30, 2020 and 2019, $26,834 and $36,068 in accounts receivable were directly written off, respectively. As of June 30, 2020, $515,771 were pledged as collateral for borrowings from financial institutions. As of March 31, 2020, $627,055 were pledged as collateral for borrowings from financial institutions.

Note 6 – OTHER CURRENT ASSETS

Other current assets consisted of the following:

	June 30, 2020		March 31, 2020
Rental deposits (1)	$	1,558,965	$	1,364,975
Prepaid and other current assets		276,962		163,565
Total	$	1,835,927	$	1,528,540

(1) The balance as of June 30, 2020 and March 31, 2020 includes short-term refundable rental security deposits.

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Note 7 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	June 30, 2020			March 31, 2020
Building	$	5,898,768		$	5,880,627
Leasehold improvements		9,397,190			9,209,136
Farmland development cost		1,691,632			1,686,430
Office equipment and furniture		5,587,888			5,632,955
Motor vehicles		505,883			504,327
Total		23,081,361			22,913,475
Less: Accumulated depreciation		(13,758,940	)		(13,059,852	)
Impairment*		(2,226,731	)		(2,219,883	)
Property and equipment, net	$	7,095,690		$	7,633,740

* The variance of impairment from March 31, 2020 to June 30, 2020 is solely caused by exchange rate variance.

Depreciation expenses for property and equipment totaled $695,151 and $441,559 for the three months ended June 30, 2020 and 2019, respectively. There were no fixed assets impaired in the three months ended June 30, 2020 and June 30, 2019.

Note 8 – LONG-TERM INVESTMENT

Long-term investment consists of the following:

	June 30, 2020			March 31, 2020
Kahamadi Bio (1)	$	3,214	*	$	6,217	*
Zhetong Medical (2)		3,960,544			2,538,234
Advance to suppliers, net	$	3,963,758		$	2,544,451

(1) It represents 49% investment in Kahamadi Bio. The investment is recorded using the equity method. Kahamadi Bio suffered loss of $3,015 the three months ended June 30, 2020.

(2) It represents 39% investment in Zhejiang Zhetong Medical Co., Ltd. Zhetong Medical was established in March 2020 to target potential acquisitions or cooperate with local pharmacies. By attracting more funds from local investors, the Company expects to continue growing its local network in the future.

Note 9 – ADVANCES TO SUPPLIERS

Advances to suppliers consist of deposits, with or advances to, outside vendors for future inventory purchases. Most of the Company’s suppliers 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, 2020 and March 31, 2020, advance to suppliers consist of the following:

	June 30, 2020			March 31, 2020
Advance to suppliers	$	3,160,046		$	2,198,863
Less: allowance for unrefundable advances		(922,326	)		(1,024,063	)
Advance to suppliers, net	$	2,237,720		$	1,174,800

For the three months ended June 30, 2020 and 2019, none of the advances to suppliers were written off against previous allowance for unrefundable advances, respectively.

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Note 10 – INVENTORY

Inventory consisted of finished goods, valued at $11,141,411 and $12,247,004 as of June 30, 2020 and March 31, 2020, respectively. The Company constantly monitors its potential obsolete products and is allowed to return products close to their expiration dates to its suppliers. Any loss on damaged items is immaterial and will be recognized immediately. As a result, no reserves were made for inventory as of June 30, 2020 and March 31, 2020.

Note 11 – FARMLAND ASSETS

Farmland assets consist of ginkgo trees planted in 2012 and expected to be harvested and sold in several years. As of June 30, 2020 and March 31, 2020, farmland assets are valued as follows:

	June 30,			March 31,
	2020			2020
Farmland assets	$	2,191,944		$	2,177,606
Less: Impairment*		(1,439,687	)		(1,435,259	)
Farmland assets, net	$	752,257		$	742,347

* As of March 31, 2018, the book value of the Ginkgo trees planted in Qianhong Agriculture’s farmland, including their cultivation cost and land lease amortization expense, was approximately $2,416,839. Based on an independent appraisal report, the value of the Ginkgo trees was approximately $796,286 as of March 31, 2018. As a result, the Company recorded an agricultural inventory impairment of $1,620,553 as of March 31, 2018. The difference between the recorded impairment loss and impairment balance in the above is primarily due to the exchange rate variance over years. There are no leasehold impairment expense in the three months ended June 30, 2020 and 2019.

Note 12 – LONG TERM REFUNDABLE DEPOSITS, LANDLORDS

As of June 30, 2020 and March 31, 2020, long term deposits amounted to $1,447,547 and $1,456,384, respectively. Long term deposits are money deposited with, or advanced to, landlords for the purpose of securing retail store leases that the Company does not anticipate being returned within the next twelve months. Most of the Company’s landlords require a minimum payment of nine months’ rent, paid up front, plus additional deposits.

Note 13 – OTHER NONCURRENT ASSETS

Other noncurrent assets consisted of the following:

	June 30, 2020		March 31, 2020
Forest land use rights*	$	985,156	$	994,558
Others		64,028		52,205
Total	$	1,049,184	$	1,046,763

* The prepayment for lease of forest land use rights is a payment made to a local government in connection with entering into an operating land lease agreement. The land is currently used to cultivate Ginkgo trees. The forest rights certificate from the local village extends the life of the lease to January 31, 2060.

The amortization of the prepayment for the lease of forest land use right was approximately $12,441 and $6,885 for the three months ended June 30, 2020 and 2019, respectively.

The Company’s amortizations of the prepayment for lease of land use right for the next five years and thereafter are as follows:

For the year ending June 30,	Amount
2021	$	26,515
2022		26,515
2023		26,515
2024		26,515
2025		26,515
Thereafter		852,581

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Note 14 – LEASES

The Company leases most of its retail stores and corporate offices under operating leases, typically with initial terms of 3 to 10 years. Usually within one to three months prior to the expiration date of a lease, the Company is required to notify the lessor and has a priority to continue renting the lease property if a lessor intends to lease property. The lease itself does not have restriction or covenants. If both parties agree to continue, a new lease contract with new lease terms has to been signed by both parties. Usually the rent may increase year by year based on the lease contract. Sublease is typically not allowed. Any damage, if made by the lessee, to the property and equipment within the property has to been fixed or reimbursed by the lessee. The Company does not have any leases entered into but which have not yet commenced. The net lease cost for the three months ended June 30, 2020 is $1,671,118. The Company does not have finance lease according to the definition of ASU 2016-02, Leases (Topic 842). Supplemental cash flow information related to leases for the three months ended June 30, 2020 is as follows:

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows paid for operating leases	$	1,671,118
Right-of-use assets obtained in exchange for lease obligations:
Operating leases		-

Supplemental balance sheet information related to leases as of June 30, 2020 is as follows:

Operating leases:
Operating lease right-of-use assets	$	19,351,247
Current portion of operating lease liabilities	$	466,213
Long-term operating lease liabilities		16,917,159
Total operating lease liabilities	$	17,383,372
Weighted average remaining lease term
Operating leases		3.2
Weighted average discount rate
Operating leases		4.19	%

The following table summarizes the maturity of lease liabilities under operating leases as of June 30, 2020:

	Operating
For the year ending June 30,	Leases
2021	$	485,355
2022		6,345,189
2023		4,510,762
2024		3,277,971
2025		1,995,568
Thereafter		2,575,035
Total lease payments		19,189,880
Less: imputed interest		(1,806,508	)
Total lease liabilities	$	17,383,372

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Note 15 – INTANGIBLE ASSETS

Net intangible assets consisted of the following at:

	June 30, 2020			March 31, 2020
License (1)	$	2,246,880		$	2,220,512
Software(2)		1,086,366			1,083,024
Land use rights (3)		1,379,337			1,375,095
Total intangible assets		4,712,583			4,678,631
Less: accumulated amortization		(735,234	)		(667,633	)
Less: impairment(4)		(618,942	)		(617,038	)
Intangible assets, net	$	3,358,407		$	3,393,960

Amortization expense of intangibles amounted to $65,389 and $58,466 for the three months ended June 30, 2020 and 2019, respectively.

(1)	This represents the fair value of the licenses of insurance applicable drugstores acquired from a variety of drugstores such as Sanhao Pharmacy and several local stores. The licenses allow patients to pay by using insurance cards at stores. The stores are reimbursed from the Human Resource and Social Security Department of Hangzhou City. In 2014, the Company acquired Sanhao Pharmacy, a drugstore chain. In September 2017, the Company acquired several new stores for the purpose of the Municipal Social Medical Reimbursement Qualification Certificates. On January 9, 2020, the Company acquired a local drugstore chain. The acquired drugstores ceased their stores’ business and liquidate all of the stores’ accounts after Jiuzhou Pharmacy acquired them. In March 2020, the drugstore chain has dissolved and its certificates were transferred to new stores opened at the same time.
(2)	These balances primarily include the SAP ERP system, the Internet Clinic Diagnosis Terminal system and the Chronic Disease Management system. In 2017, we have installed a leading ERP system, SAP from Germany. SAP is a well-known management system used by many fortune 500 companies. It is being amortized over three years since its installation. In 2020, we have installed an internet Clinic Diagnosis System used to strengthen our ability to perform online diagnosis which may increase more customer spending and a Chronic Disease Management System used to better manage and monitor our members’ health. As of June 30, 2020, the SAP system has a net value of $135,698 (RMB 959,352), the internet Clinic Diagnosis System has a net value of approximately $380,313 (RMB 2,688,709), the Chronic Disease Management System has a net value of approximately $16,462 (RMB 116,379) .
(3)	In July 2013, the Company purchased the land use rights of a plot of land in Lin’an, Hangzhou, intended for the establishment of an herb processing plant in the future. However, as the Company’s farming business in Lin’an has not grown, the Company does not expect completion of the plant in the near future.
(4)	In the year ended March 31, 2020, the company evaluated the licenses of insurance applicable drugstores acquired in the past based on the discounted positive cash value. Due to the stricter government insurance policy in fiscal year 2021, the value of these licenses has declined. As a result, the company recorded an impairment. There are no impairment expense in the three months ended June 30, 2020 and 2019.

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Note 16 – NOTES PAYABLE

The Company has credit facilities with Hangzhou United Bank (“HUB”) that provided working capital in the form of the following bank acceptance notes at June 30, 2020 and March 31, 2020:

		Origination	Maturity	June 30,		March 31,
Beneficiary	Endorser	date	date	2020		2020
Jiuzhou Pharmacy(1)	HUB	10/09/19	04/09/20		-		3,478,259
Jiuzhou Pharmacy(1)	HUB	11/06/19	05/06/20		-		164,582
Jiuzhou Pharmacy(1)	HUB	12/05/19	06/05/20		-		3,106,474
Jiuzhou Pharmacy(1)	HUB	12/31/19	06/30/20		-		2,289,308
Jiuzhou Pharmacy(1)	HUB	01/06/20	07/06/20		129,856		129,457
Jiuzhou Pharmacy(1)	HUB	02/19/20	08/19/20		5,120,844		5,105,096
Jiuzhou Pharmacy(1)	HUB	03/10/20	09/10/20		5,341,297		5,324,871
Jiuxin Medicine(1)	HUB	12/26/19	06/26/20		-		1,371,992
Jiuxin Medicine(1)	HUB	12/31/19	06/30/20				3,943,776
Jiuxin Medicine(1)	HUB	03/31/20	09/30/20		1,697,376		1,692,156
Jiuzhou Pharmacy(1)	HUB	04/10/20	10/10/20		2,969,129
Jiuzhou Pharmacy(1)	HUB	04/29/20	10/29/20		546,874
Jiuzhou Pharmacy(1)	HUB	05/09/20	11/09/20		3,803,552		-
Jiuzhou Pharmacy(1)	HUB	06/24/20	12/24/20		1,405,995		-
Jiuzhou Pharmacy(1)	HUB	06/30/20	12/30/20		891,122		-
Jiuxin Medicine(1)	HUB	06/30/20	12/30/20		4,809,329		-
Total				$	26,715,374	$	26,605,971

(1) As of June 30, 2020, the Company had $26,715,374 (RMB 188,870,639) of notes payable from HUB. The Company is required to hold restricted cash in the amount of $14,913,825 (RMB 105,684,113) with HUB as collateral against these bank notes. Included in the restricted cash is a total of $8,770,422 three-year deposit (RMB 62,150,000) deposited into HUB as a collateral for current and future notes payable from HUB.  As of March 31, 2020, the Company had $26,605,971 (RMB 188,677,437) of notes payable from HUB. The Company is required to hold restricted cash in the amount of $14,596,179 (RMB 103,509,456) with HUB as collateral against these bank notes. Included in the restricted cash is a total of $8,763,958 three-year deposit (RMB 62,150,000) deposited into HUB as a collateral for current and future notes payable from HUB.

As of June 30, 2020, the Company had a credit line of approximately $12.55 million in the aggregate from HUB. By putting up a three-year deposit of $8.77 million and the additional short-term deposits of $6.14 million deposited in the banks, the total credit line was $27.46 million. As of June 30, 2020, the Company had approximately $26.72 million of bank notes payable and approximately $0.74 million bank credit line was still available for further borrowing. The bank notes are secured by three shops of Jiuzhou Pharmacy and guaranteed by the Company’s major shareholders.

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Note 17 – LOAN PAYABLE

On August 2, 2019 and December 11, 2019, the Company borrowed $717,810 and $6,460,290 from Haihui Commercial, respectively. After deducting processing fee and deposits which are refundable at the end of loan period, the Company received $617,317 and $5,878,864 respectively. The Company is required to pledge accounts receivable of three drugstores to Haihui Commercial. As of June 30, 2020, the remaining loan balance is $5,851,778. The Company is scheduled to make monthly repayments, among which $2,300,271 is due within a year. The Company has an option to pay off the debts earlier than the repayment schedule upon approval from Haihui Commercial.

Note 18 – TAXES

Income tax

Income tax expense includes a provision for federal, state and foreign taxes based on the annual estimated effective tax rate applicable to the Company and its subsidiaries, adjusted for items which are considered discrete to the period.

The effective tax rates on income before income taxes for the three months ended June 30, 2020 was (17.4)%. The (17.4) % rate adjustments for the three months ended June 30, 2020 represent expenses that primarily include stock option expenses and legal, accounting and other expenses incurred by the Company that are not deductible for PRC income tax. The effective tax rate is based on forecasted annual results and these amounts may fluctuate significantly through the rest of the year as a result of the unpredictable impact of COVID-19 on its operating activities.

The effective tax rate on income before income taxes for the three months ended June 30, 2019 was (0.4)%. The (0.4)% rate adjustments for the three months ended June 30, 2019 represent expenses that primarily include stock option expenses and legal, accounting and other expenses incurred by the Company that are not deductible for PRC income tax.

The Company has recorded $0 unrecognized benefit as of June 30, 2020. On the information currently available, the Company does not anticipate a significant increase or decrease to its unrecognized benefit within the next 12 months. 

Note 19 – 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 $204,538 and $341,024 in employment benefits and pension for the three months ended June 30, 2020 and 2019, respectively.

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Note 20 – RELATED PARTY TRANSACTIONS AND ARRANGEMENTS

Amounts payable to related parties are summarized as follows:

	June 30, 2020		March 31, 2020
Due to a director and CEO (1) :		491,300		490,218

(1) Due to foreign exchange restrictions, the Company’s director and CEO, Mr. Lei Liu personally lent U.S. dollars to the Company to facilitate its payments of expenses in the United States.

The Company leases from Mr. Lei Liu a retail space; the lease expires in September 2020. Rent expenses totaled $6,532 and $6,785 for the three months ended June 30, 2020 and 2019, respectively. The amounts owed under the lease for the three months ended June 30, 2020 and 2019 were not paid to Mr. Liu as of June 30, 2020.

On April 28, 2018, 10% of Jiuxin Medicine was sold to Hangzhou Kangzhou Biotech Co. Ltd. for a total proceeds of approximately $75,643 (RMB507,760). Mr. Lei Liu owns 51% of Hangzhou Kangzhou Biotech Co. Ltd.

Note 21 – WARRANTS

In connection with the registered direct offering closed on July 19, 2015, the Company issued to an investor a warrant to purchase up to 600,000 shares of common stock at an exercise price of $3.10 per share. The warrant became exercisable on January 19, 2016 and will expire on January 18, 2021. In connection with the offering, the Company also issued a warrant to its placement agent of this offering, pursuant to which the agent may purchase up to 6% of the aggregate number of shares of common stock sold in the offering, i.e. 72,000 shares. Such warrant has the same terms as the warrant issued to investor in the offering.

On June 1, 2020, the investor exercised 25,000 warrants at the price of $3.10 per share in cash. As of June 30, 2020, 647,000 warrants had not been exercised. The fair value of the warrants issued to purchase 647,000 and 672,000 shares as of June 30, 2020 and March 31, 2020, as described above was estimated by using the binominal pricing model with the following assumptions:

	Common Stock Warrants			Common Stock Warrants
	June 30, 2020			March 31, 2020
Stock price	$	1.44		$	1.77
Exercise price	$	3.10		$	3.10
Annual dividend yield		-	%		-	%
Expected term (years)		0.56			0.81
Risk-free interest rate		0.18	%		0.71	%
Expected volatility		98.86	%		62.08	%

Upon evaluation, the warrants meet the definition of a derivative under FASB ASC 815, as the Company cannot avoid a net cash settlement under certain circumstances. Accordingly, the fair value of the warrants was classified as a liability of $64,090 as of March 31, 2020. For the three months ended June 30, 2020 and June 30, 2019, the Company recognized a loss of $4,890 and a gain of $403,555 for the investor warrant and placement agent warrant, from the change in fair value of the warrant liability. As a result, the warrant liability is carried on the consolidated balance sheets at the fair value of $68,980 for the investor warrant and placement agent warrant, collectively, as of June 30, 2020.

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Note 22 – EMPLOYEE DEPOSITS

To encourage operating team, which consists of doctors and nurses, to devote their efforts to run clinics, Linjia Medical allows them to put deposits in the clinic where doctors and nurses work, and take shares in any profit of the clinic. The principal amounts of these deposits are refundable in the event the doctors and nurses leave the clinic. In order to properly reflect Linjia Medical’s liabilities, the Company reclassified the deposit of $14,145 (RMB100,000) and $70,507 (RMB500,000) as financial liability as of June 30, 2020 and March 31, 2020.

Note 23 – STOCKHOLDER’S EQUITY

Common stock

On April 15, 2019, the Company closed a registered direct offering of 4,000,008 shares of common stock at $2.50 per share with gross proceeds of $10,000,020 from our effective shelf registration statement.

On June 1, 2020, an investor exercised 25,000 warrants at the price of $3.10 per share in cash. The Company issued 25,000 shares of common stocks.

On June 3, 2020, the Company closed a registered direct offering of 5,000,004 shares of common stock at $2.00 per share with gross proceeds of $10,000,008 from its effective shelf registration statement.

Stock warrants

Concurrent with the registered direct offering of common stock that closed on April 15, 2019, the Company issued to several investors in a private placement warrants to purchase up to 3,000,006 shares of common stock. In connection with the offering, the Company also issued a warrant to its placement agent of this offering, pursuant to which the agent may purchase up to 6% of the aggregate number of shares of common stock sold in the offering, i.e. 240,000 shares at an exercise price of $3.125 per share. The warrant became exercisable on October 11, 2019 and will expire on April 11, 2024.

Concurrent with the registered direct offering of common stock that closed on June 3, 2020, the Company issued to several investors in a private placement warrants to purchase up to 3,750,003 shares of common stock. In connection with the offering, the Company also issued a warrant to its placement agent of this offering, pursuant to which the agent may purchase up to 6.5% of the aggregate number of shares of common stock sold in the offering, i.e. 300,000 shares at an exercise price of $2.57 per share. The warrant becomes exercisable on December 2, 2020 and will expire on June 2, 2025.

Upon evaluation, both the warrants issued in April 2019 and June 2020 meet the definition of an equity transaction under FASBASC 815. Accordingly, the fair value of the warrants is recorded as a part of additional paid-in capital.

Stock-based compensation

The Company accounts for share-based payment awards granted to employees and directors by recording compensation expense based on estimated fair values. The Company estimates the fair value of share-based payment awards on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company’s consolidated statements of operations. Share-based awards are attributed to expenses using the straight-line method over the vesting period. The Company determines the value of each option award that contains a market condition using a Monte Carlo Simulation valuation model, while all other option awards are valued using the Black-Scholes valuation model as permitted under FASB ASC 718 “Compensation - Stock Compensation.” The assumptions used in calculating the fair value of share-based payment awards represent the Company’s best estimates. The Company’s estimates of the fair values of stock options granted and the resulting amounts of share-based compensation recognized may be impacted by certain variables including stock price volatility, employee stock option exercise behaviors, additional stock option modifications, estimates of forfeitures, and the related income tax impact.

Stock option

On November 18, 2014, the Company granted a total of 967,000 shares of stock options under the Plan to a group of a total of 46 grantees including directors, officers and employees. The exercise price of the stock option is $2.50. The option vests on November 18, 2017, provided that the grantees are still employed by the Company on such a date. The options will be exercisable for five years from the vesting date, or November 18, 2017 until November 17, 2022. For the three months ended June 30, 2020 and 2019, none was recorded as compensation expense. As of June 30, 2020, all compensation costs related to stock option compensation arrangements granted have been recognized.

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Statutory reserves

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 dividends 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, 2020 and 2019, the Company did not make appropriations to statutory reserves.

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.

Note 24 – LOSS 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 (loss) earnings per share computation:

	The three months ended June 30,
	2020			2019
Net loss attributable to controlling interest	$	(231,509	)	$	(2,134,951	)
Weighted average shares used in basic computation		34,428,271			32,453,269
Diluted effect of stock options and warrants		-			-
Weighted average shares used in diluted computation		34,428,271			32,453,269
Loss per share – Basic:		-			-
Net loss attributable to controlling interest	$	(0.01	)	$	(0.07	)
Loss per share – Diluted:
Net loss attributable to controlling interest	$	(0.01	)	$	(0.07	)

For the three months ended June 30, 2020, 967,000 shares underlying employee stock options and 575,000 shares underlying outstanding purchase options to an investor, and 72,000 shares underlying outstanding purchase option to an investment placement agent were excluded from the calculation of diluted loss per share as the options were anti-dilutive.

Note 25 – SEGMENTS

The Company operates within four main reportable segments: retail drugstores, online pharmacy, drug wholesale and herb farming. The retail drugstores segment sells prescription and over-the-counter (“OTC”) medicines, TCM, dietary supplements, medical devices, and sundry items to retail customers. The online pharmacy sells OTC drugs, dietary supplements, medical devices and sundry items to customers through several third-party platforms such as Alibaba’s Tmall, JD.com and Amazon.com, and the Company’s own platform all over China. The drug wholesale segment includes supplying the Company’s own retail drugstores with prescription and OTC medicines, TCM, dietary supplement, medical devices and sundry items (which sales have been eliminated as intercompany transactions), and also selling them to other drug vendors and hospitals. The Company’s herb farming segment cultivates selected herbs for sales to other drug vendors. The Company is also involved in online sales and clinic services that do not meet the quantitative thresholds for reportable segments and are included in the retail drugstores 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 operations and markets to distinct classes of customers.

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The following table presents summarized information by segment of the continuing operations for the three months ended June 30, 2020.

	Retail drugstores		Online Pharmacy			Drug wholesale			Herb farming		Total
Revenue	$	18,810,474	$	4,912,834			7,331,004			-		31,054,312
Cost of goods		12,402,182		4,228,411			6,443,500			-		23,074,093
Gross profit	$	6,408,292	$	684,423			887,504			-		7,980,219
Selling expenses		4,977,047		704,876			590,484			-		6,272,407
General and administrative expenses		1,128,083		59,011			933,072			-		2,120,166
Loss from operations	$	303,162	$	(79,464	)		(636,052	)		-		(412,354	)
Depreciation and amortization	$	750,498	$	-			10,042			-		760,540
Total capital expenditures	$	169,807	$	-						-		169,807

The following table presents summarized information by segment of the continuing operations for the three months ended June 30, 2019.

	Retail drugstores			Online Pharmacy			Drug wholesale			Herb farming		Total
Revenue	$	16,734,988		$	2,443,605			6,102,191			-		25,280,784
Cost of goods		11,682,721			2,096,850			5,439,775			-		19,219,346
Gross profit	$	5,052,267		$	346,755			662,416			-		6,061,438
Selling expenses		4,835,666			473,380			659,505			-		5,968,551
General and administrative expenses		1,733,704			55,123			1,062,785			-		2,851,612
Loss from operations	$	(1,517,103	)	$	(181,748	)		(1,059,874	)		-		(2,758,725	)
Depreciation and amortization	$	504,463		$	-			8,486			-		512,949
Total capital expenditures	$	753,173		$	-						-		753,173

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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 drugstores by main product category for the three months ended June 30, 2020 and 2019 were as follows:

	For the three months ended
	June 30,
	2020		2019
Prescription drugs	$	7,406,774	$	5,695,286
OTC drugs		6,818,484		7,240,228
Nutritional supplements		1,347,769		1,231,133
TCM		949,012		1,104,050
Sundry products		422,551		298,198
Medical devices		1,865,884		1,166,093
Total	$	18,810,474	$	16,734,988

The Company’s net revenue from external customers through online pharmacy by main product category is as follows:

	For the three months ended
	June 30,
	2020		2019
Prescription drugs	$	1,869,643	$	-
OTC drugs		1,322,811		1,024,602
Nutritional supplements		221,031		107,194
TCM		23,199		13,681
Sundry products		546,720		438,736
Medical devices		929,430		859,392
Total	$	4,912,834	$	2,443,605

The Company’s net revenue from external customers through wholesale by main product category is as follows:

	For the three months ended
	June 30,
	2020		2019
Prescription drugs	$	5,966,148	$	4,880,491
OTC drugs		915,146		1,074,261
Nutritional supplements		59,841		21,691
TCM		28,967		98,828
Sundry products		2,597		5,682
Medical devices		358,305		21,238
Total	$	7,331,004	$	6,102,191

Note 26 – Subsequent Events

Management of the Company has evaluated subsequent events through the date of the report, and there was no material subsequent event requiring adjustments to the financial statements or disclosure.  

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following management’s discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and the notes thereto and the other financial information appearing elsewhere in this item. In addition to historical information, the following discussion contains certain forward-looking statements within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements relate to our future plans, objectives, expectations and intentions. These statements may be identified by the use of words such as “may,” “will,” “could,” “expect,” “anticipate,” “intend,” “believe,” “estimate,” “plan,” “predict,” and similar terms or terminology, or the negative of such terms or other comparable terminology. Although we believe the expectations expressed in these forward-looking statements are based on reasonable assumptions within the bound of our knowledge of our business, our actual results could differ materially from those discussed in these statements. Factors that could contribute to such differences include, but are not limited to, those discussed in the “Risk Factors” section of our annual report on Form 10-K for the year ended March 31, 2020 and filed with the SEC on July 10, 2020. We undertake no obligation to update publicly any forward-looking statements for any reason even if new information becomes available or other events occur in the future.

Our financial statements are prepared in U.S. Dollars and in accordance with accounting principles generally accepted in the United States. See “Exchange Rates” below for information concerning the exchanges rates at which Renminbi (“RMB”) were translated into U.S. Dollars (“USD” or “$”) at various pertinent dates and for pertinent periods.

Overview

We currently operate in four business segments in China: (1) retail drugstores, (2) online pharmacy, (3) wholesale of products similar to those that we carry in our pharmacies, and (4) farming and selling herbs used for traditional Chinese medicine (“TCM”).

Our drugstores offer customers a wide variety of pharmaceutical products, including prescription and over-the-counter (“OTC”) drugs, nutritional supplements, TCM, personal and family care products, medical devices, and convenience products, including consumable, seasonal, and promotional items. Additionally, we have licensed doctors of both western medicine and TCM on site for consultation, examination and treatment of common ailments at scheduled hours. As of June 30, 2020, we had 117 pharmacies in Hangzhou city and its adjacent town Lin’an under the store brand of “Jiuzhou Grand Pharmacy” and 4 independent pharmacies controlled by Jiuzhou Pharmacy. During the three months ended June 30, 2020, we dissolved one pharmacy.

Since May 2010, we have also been selling certain OTC drugs, medical devices, nutritional supplements and other sundry products online. Our online pharmacy sells through several third-party platforms such as Alibaba’s Tmall, JD.com, Amazon.com and the Company’s own platform all over China. Our sales through our own platform are primarily generated by customers who use their private commercial medical insurances packages.

We operate a wholesale business through Jiuxin Medicine distributing third-party pharmaceutical products (similar to those carried by our pharmacies) primarily to trading companies throughout China. We also planted gingkgo trees but have not incurred sales in the three months ended June 30, 2020.

Amidst the COVID-19 outbreak in February 2020, we experienced a decline in the number of customer visits. However, the spread of the disease has been effectively controlled in the three months ended June 30, 2020. The number of the new infected daily has become limited. People tend to work and live as usual. As a result, we believe these negative impacts are temporary.

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Critical Accounting Policies and Estimates

In preparing our audited consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, we are required to make judgments, estimates and assumptions that affect: (i) the reported amounts of our assets and liabilities; (ii) the disclosure of our contingent assets and liabilities at the end of each reporting period; and (iii) the reported amounts of revenue and expenses during each reporting period. We continually evaluate these estimates based on our own historical experience, knowledge and assessment of current business and other conditions, our expectations regarding the future based on available information and reasonable assumptions, which together form our basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ materially from those estimates.

We believe that any reasonable deviation from those judgments and estimates would not have a material impact on our financial condition or results of operations. To the extent that the estimates used differ from actual results, however, adjustments to the statement of operations and corresponding balance sheet accounts would be necessary. These adjustments would be made in future financial statements.

When reading our financial statements, you should consider: (i) our critical accounting policies; (ii) the judgment and other uncertainties affecting the application of such policies; and (iii) the sensitivity of reported results to changes in conditions and assumptions. The critical accounting policies and related judgments and estimates used to prepare our financial statements are identified in Note 2 to our audited consolidated financial statements accompanying in this report.

Revenue recognition

In May 2014, the FASB issued ASU No. 2014-09, which creates Topic 606, Revenue from Contracts with Customers. The new guidance outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. Additionally, the guidance requires improved disclosure to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. The new guidance supersedes most current revenue recognition guidance, including industry-specific guidance. The standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, and permits early adoption on a limited basis. The update permits the use of either the retrospective or cumulative effect transition method. On April 1, 2018, we adopted the guidance in ASC 606 and all the related amendments and applied the new revenue standard to all contracts using the modified retrospective method. Based on the new standard our revenue recognition policies related to membership rewards programs has changed. Membership rewards, usually membership points, are accumulated by customers based on their historical spending levels. The Company has determined that there is an additional performance obligation to those customers at the time of the initial transaction. The customers can then redeem these points against the prices of merchandises they purchase in the future. At the end of each period, unredeemed membership rewards are reflected as a contract liability. The adoption of the new revenue standard was not material and is not expected to be material to our net income on an ongoing basis.

Impairment of definite-lived intangible assets

The Company evaluates the recoverability of definite-lived intangible assets whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. These long-lived assets are grouped and evaluated for impairment at the lowest level at which individual cash flows can be identified. When evaluating these long-lived assets for potential impairment, the Company first compares the carrying amount of the asset group to the asset group’s estimated future cash flows (undiscounted and without interest charges). If the estimated future cash flows are less than that carrying amount of the asset group, an impairment loss calculation is prepared. The impairment loss calculation compares the carrying amount of the asset group to the asset group’s estimated future cash flows (discounted and with interest charges). If required, an impairment loss is recorded for the portion of the asset group’s carrying value that exceeds the asset group’s estimated future cash flows (discounted and with interest charges).

The long-lived asset impairment loss calculation contains uncertainty since management must use judgment to estimate each asset group’s future sales, profitability and cash flows. When preparing these estimates, the Company considers historical results and current operating trends and consolidated sales, profitability and cash flow results and forecasts. These estimates can be affected by a number of factors including, but not limited to, general economic and regulatory conditions, efforts of third party organizations to reduce their prescription drug costs and/or increased member co-payments, the continued efforts of competitors to gain market share and consumer spending patterns.

The long-lived asset impairment loss calculation contains uncertainty since management must use judgment to estimate each asset group’s future sales, profitability and cash flows. When preparing these estimates, the Company considers historical results and current operating trends and consolidated sales, profitability and cash flow results and forecasts. These estimates can be affected by a number of factors including, but not limited to, general economic and regulatory conditions, efforts of third party organizations to reduce their prescription drug costs and/or increased member co-payments, the continued efforts of competitors to gain market share and consumer spending patterns. There were no material impairment losses for definite-lived intangible assets recognized in the three months ended June 30, 2020 and 2019.

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Results of Operations

Comparison of the three months ended June 30, 2020 and 2019

The following table summarizes our results of operations for the three months ended June 30, 2020 and 2019:

	Three months ended June 30,
	2020						2019
	Amount			Percentage of total revenue			Amount			Percentage of total revenue
Revenue	$	31,054,312			100.0	%	$	25,280,784			100.0	%
Gross profit	$	7,980,219			25.7	%	$	6,061,438			24.0	%
Selling expenses	$	6,272,407			20.2	%	$	5,968,551			23.6	%
General and administrative expenses	$	2,120,166			6.8	%	$	2,851,612			11.3	%
Loss from operations	$	(412,354	)		(1.3	)%	$	(2,758,725	)		(10.9	)%
Other Income(expense), net	$	86,222			0.3	%	$	(14,612	)		(0.1	)%
Change in fair value of derivative liability	$	(4,890	)		0.0	%	$	403,555			1.6	%
Income tax expense	$	57,570			0.2	%	$	8,388			0.0	%
Net loss	$	(388,592	)		(1.3	)%	$	(2,378,170	)		(9.4	)%

Revenue

Due to the growth in our retail drugstores business, online pharmacy and wholesale business, revenue increased by $5,773,528 or 22.8% for the three months ended June 30, 2020, as compared to the three months ended June 30, 2019.

Revenue by Segment

The following table breaks down the revenue of our four business segments for the three months ended June 30, 2020 and 2019:

	For the three months ended June 30,
	2020					2019
	Amount		% of total   revenue			Amount		% of total revenue			Variance by amount		% of change
Revenue from retail drugstores	$	18,810,474		60.6	%	$	16,734,988		66.2	%	$	2,075,486		12.4	%
Revenue from online sales		4,912,834		15.8	%		2,443,605		9.7	%		2,469,229		101.1	%
Revenue from wholesale business		7,331,004		23.6	%		6,102,191		24.1	%		1,228,813		20.1	%
Revenue from farming business		-		-	%		-		-	%		-		-	%
Total revenue	$	31,054,312		100.0	%	$	25,280,784		100.0	%	$	5,773,528		22.8	%

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Retail drugstores sales, which accounted for approximately 60.6% of total revenue for the three months ended June 30, 2020, increased by $2,075,486, or 12.4% compared to the three months ended June 30, 2019, to $16,734,988. Same-store sales increased by approximately $1,610,851, or 9.9%, while new stores contributed approximately $459,074 in revenue in the three months ended June 30, 2020.

The increase in our retail drugstore sales is primarily due to consumer-facing benefits such as emphasis on on-site medical care, chronic disease management services, incremental DTP (Direct-to-Patient) business caused by continuous hospital medical reform, and maturing of stores opened a year ago. Convenient on-site medical support at our pharmacies has been our hallmark from the beginning of our business. Suitable medical support from our doctors has proven to be critical to our superior store sales. Linking doctor care with drug sales has become our business guidance for the future. By adding more doctor-provided services at stores, we have been able to promote our store sales.

Chronic diseases such as high blood pressure, diabetes and hyperlipidemia become more and more prevalent nationwide. These types of patients usually visit doctors who prescribe chronic disease drugs every couple weeks. In order to attract these patients to continuously purchase products at our stores, we created chronic disease management program. Once a patient visits our store, we will record their information, type in our electronic system and then closely monitor these patients. After they become members in our chronic disease management program, we send regular reminders and health tips to them. Usually these patient are old people, which have more spare time than the young people. We provide in-store spaces for them to take free tests such as blood pressure test, talk to our doctors and listen to specialists. As a result, more chronic diseases patients became our loyal members and spent more in purchasing our products.

DTP drugs are usually new medicines not sold at hospitals with low profit margin. As part of the PRC’s recent medical reform package, local governments require the revenue percentage from drug sales at public hospitals to decline. In order to achieve lower drug sales percentage out of their total revenue, the public hospitals chose to abandon sales of low-profit-margin DTP products first. As the biggest drugstore network in Hangzhou City, Jiuzhou Pharmacy had quite a few of our stores located adjacent to local hospitals. Additionally, we have actively contacted local vendors of certain DTP products that we were previously not selling and were able to sell these DTP products in our stores. By setting special counters selling DTP products at our stores, sales in our drugstores have increased.

Furthermore, in fiscal years 2018 and 2019, we have accelerated our expansion of new stores, which have generated more retail drugstore revenues. Among the new stores, thirty stores have become qualified for municipal government insurance reimbursement after operation of a year or more. Sales reimbursed from municipal government insurance program usually account for more than 50% of our total sales at maturing stores. As these stores gained such qualifications, their sales increased quickly as compared to the previous year. Our store count is 117 at June 30, 2020 and 119 at June 30, 2019.

Our online pharmacy sales increased by approximately $2,469,229, or 101.1% for the three months ended June 30, 2020, as compared to the three months ended June 30, 2019. The increase was primarily caused by an increase in sales of prescription drugs via e-commerce platforms such as Tmall. Prescription drugs used to be prohibited from sales online due to safety concern. However, because the nation has lifted the ban order, online prescription drug sales become popular. As a result, the sale of prescription drugs was $1,869,643 in the three months ended June 30, 2020 as compared to none in the three month ended June 30, 2019. Additionally, we maintained a membership care program targeted at chronic disease customers. We have closely interacted with our members via WeChat by providing healthcare knowledge and reminding our customers to refill medicine. By implementing a personalized customer care program, we were able to promote our sales.

Wholesale revenue increased by $1,228,813 or 20.1% primarily as a result of our ability to resell certain products, which our retail stores made large order on, to other vendors. As our retail drugstores achieved large quantity sales of certain brand name products, we were able to bargain for lower purchase prices than the market level on these merchandises. As a result, vendors who were unable to obtain a better price than ours, turned to us for these products, causing the increase in the wholesale volume. However, hospitals are still the dominant drug retailers in China. Local hospitals usually have strong ties with their existing suppliers and we have not been able to make significant progress in becoming a major supplier to local hospitals. 

In the three months ended June 30, 2020 and 2019, we have not generated revenue from our farming business. We planted ginkgo and maidenhair trees during the year ended March 31, 2013, more than seven years ago. A ginkgo tree may have a growth period of up to twenty-three months before it is mature enough for harvest. Usually, the longer a ginkgo tree grows the more valuable it becomes. Therefore, we have not yet harvested our ginkgo trees. We plan to continue cultivating the trees in order to maximize their market value in the future. We will continue to grow ginkgo trees in the future.

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Gross Profit

Gross profit increased by $1,918,781 or 31.7% period over period primarily as a result of an increase in gross profit provided by retail pharmacy business, which increased significantly in the three months ended June 30, 2020. At the same time, gross margin increased slightly from 24.0% to 25.7% due to higher retail pharmacy profit margins. The average gross margins for each of our four business segments are as follows:

	For the three months ended June 30,
	2020			2019
Average gross margin for retail drugstores		34.1	%		30.2	%
Average gross margin for online sales		13.9	%		14.2	%
Average gross margin for wholesale business		12.1	%		10.9	%
Average gross margin for farming business		N/A			N/A

Retail gross margins increased primarily because of introducing certain popular products with high profit margin, and renegotiating prices with our suppliers continuously. In order to promote our sales and profits, we specifically selected a series of popular products such as radix bupleuri, which we believe are suitable to local community. As a result, we were able to keep up with our sales profit margin. Additionally, we continuously renegotiate with our vendors and press price down to acceptable levels. For example, we explore more suppliers to search for lower prices. We also try to directly purchase from manufacturers instead of local vendors to cut off middle-man expenses. We expect to keep our profit margin at a reasonable level in the future.

Gross margin of online pharmacy sales decreased primarily due to intense market competition. We conduct our business either through certain e-commerce platforms such as Tmall and JD.com or via our own official online pharmacy website, www.dada360.com. The online prices of healthcare products are transparent as customers can easily compare prices from websites. In order to promote our sales through e-commerce platforms, we have to lower our prices leading to lower profit margin. As a way to retain new customers from insurance companies, we also kept low prices on our official online pharmacy websites. As a result, our profit margin for online sales decreased.

Wholesale gross margin increased primarily due to various products with different profit margin we carried and sold to certain pharmaceutical vendors. Although we have attempted to market our products to major local hospitals and other pharmacies, we have not been able to make significant progress. Until we are able to obtain status as a provincial or national exclusive sale agent for certain popular drugs or have sales access to large local hospitals, we may have to maintain low profit margins in order to drive sales on our wholesale business.

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Selling and Marketing Expenses

Selling and marketing expenses increased by $303,856, or 5.1%, as compared to the same period of last fiscal year, primarily due to increase in fee charged by various platforms as a result of sale increase in our online pharmacy. As our online pharmacy sales more than doubled in the three months ended June 30, 2020 as compared to the same period last year. We incurred service fee from third-party platforms such as Tmall and JD.com, which usually charge their fee based on a proportion of our sales via their platforms. The service fee increased by $210,771 period over period Overall, such expenses as a percentage of our revenue were 20.2% and 23.6% respectively, in the three months ended June 30, 2020 and 2019.

General and Administrative Expenses

General and administrative expenses decreased by $731,446, or 25.7%, as compared to the same period of last year. Such expenses as a percentage of revenue decreased to 6.8% from 11.3% for the same period of last year. In the three months ended June 30, 2020, we recorded bad debt allowance expense of $18,320 as compared to $758,231 in the same period of last year. Excluding such an effect, the general and administrative expenses increased by $8,465 period over period.

Loss from Operations

As a result of the above, we had loss from operations of $412,354 in the quarter ended June 30, 2020, as compared to loss from operations of $2,758,725 a year ago. Our operating margin for the three months ended June 30, 2020 and 2019 was (1.3)% and (10.9)%, respectively.

Income Taxes

Our income tax expense increased by $49,182 period over period due to an increase in overall profit.

Net Loss

As a result of the foregoing, net loss is $388,592 in the three months ended June 30, 2020 as compared to a net loss of $2,378,170 in the three months ended June 30, 2019.

Accounts receivable

Accounts receivable, which are unsecured, are stated at the amount we expect to collect. We continuously monitor collections and payments from our customers (our distributors) and maintain a provision for estimated credit losses. To prepare for potential loss in such accounts, we made corresponding reserves.

Our accounts receivable aging was as follows for the periods described below:

From date of invoice to customer	Retail drugstores			Online Pharmacy			Drug wholesale			Herb farming		Total amount
1- 3 months	$	6,510,697		$	763,651		$	854,273		$	-	$	8,128,621
4- 6 months		178,253			106,441			170,485			-		455,179
7- 12 months		29,847			-			395,889			-		425,736
Over one year		1,997,237			-			372,137					2,369,374
Allowance for doubtful accounts		(1,833,796	)		(12,959	)		(547,560	)				(2,394,315	)
Total accounts receivable	$	6,882,238		$	857,133		$	1,245,224		$	-	$	8,984,595

Accounts receivable from our retail business mainly consist of reimbursements from government health insurance bureaus and commercial health insurance programs. In the three months ended June 30, 2020, we wrote off an approximately $26,834 collectible from provincial and Hangzhou City government insurance, as such amount has been determined by the health insurance bureaus to be unqualified for reimbursement. 

37

Accounts receivables from our online pharmacy business mainly consist of receivables from insurance company and a service company handling with insurance companies. As we continue to expand our business with commercial insurance company, our receivables from them increased. Additionally, certain receivables are from third-party platforms such as JD.com where we sell products. Usually the third-party platforms will collect from customers ordering on their platforms and then reimburse us at a later date. Such reimbursement periods range from several days to a month after orders are placed.

Accounts receivable from our drug wholesale business consist of receivables from our customers such as pharmaceutical distributors and local drugstores primarily in Zhejiang Province. In fiscal 2019, we accelerated collection of certain aged accounts from customers which we no longer or rarely sold products to. By doing so, we are able to take better use of our cash. As a result, the overall reserve on wholesale accounts receivables decreased.

Subsequent to June 30, 2020 and through July 31, 2020, we collected approximately $2.8 million in receivables relating to our drugstore business, approximately $0.6 million in receivables relating to our online pharmacy business, approximately $1.0 million relating to our wholesale business, and $0 relating to our herb farming business.

Advances to suppliers

Advances to suppliers are mainly prepayments to secure certain products or services at favorable pricing. The aging of our advances to suppliers is as follows for the periods described below:

From date of cash prepayment to suppliers	Retail drugstores			Online Pharmacy		Drug wholesale			Herb farming		Total amount
1- 3 months	$	219,481		$	-	$	1,428,813		$	-	$	1,648,294
4- 6 months		35,556			-		276,464			-		312,020
7- 12 months		180,565			-		206,598			-		387,163
Over one year		171,611			-		640,958			-		812,569
Allowance for doubtful accounts		(211,937	)		-		(710,389	)		-		(922,326	)
Total advances to suppliers	$	395,276		$	-	$	1,842,444		$	-	$	2,237,720

Since the acquisition of Jiuxin Medicine, we have gradually transferred almost all logistics services of our retail drugstores to Jiuxin Medicine. Jiuzhou Pharmacy only makes purchases of certain non-medical products. As a result, our retail chain had little advances to suppliers as of June 30, 2020. In the three months ended June 30, 2020, we had outstanding advances to suppliers with which we have ceased doing business. These advances have been fully reserved.

Advances to suppliers for our drug wholesale business consist of prepayments to our vendors such as pharmaceutical manufacturers and other distributors. We typically receive products from vendors within three to nine months after making prepayments. We continuously monitor delivery from and payments to our vendors while maintaining a provision for estimated credit losses based upon past experience and any supplier-specific issues such as the discontinuation of inventory supply that have been identified. If we are having difficulty receiving products from a vendor, we take the following steps: ceasing purchasing products from the vendor, asking for return of our prepayment promptly, and if necessary, taking legal actions. If all of these steps are unsuccessful, management then determines whether or not the prepayments should be reserved or written off. 

Liquidity and Capital Resources

Our cash flows for the periods indicated are as follows:

	For the three months ended June 30,
	2020			2019
Net cash used in operating activities	$	(5,478,357	)	$	(8,164,764	)
Net cash used in investing activities	$	(1,597,437	)	$	(1,171,543	)
Net cash provided by financing activities	$	9,470,664		$	8,018,325

38

For the three months ended June 30, 2020, cash used in operating activities amounted to $(5,478,357), as compared to $(8,164,764) for the same period a year ago. The change is primarily attributable to a decrease in cash provided by inventories and biological assets of $1,710,955, a decrease in cash provided by advances to suppliers of $1,194,818, a decrease in cash provided by bad debt direct write-off and provision of $739,911 offset by an increase of $3,462,675 in accounts payable, and an increase in cash provided by accounts receivable of $1,404,352.

For the three months ended June 30, 2020, net cash used in investing activities amounted to $(1,597,437), as compared to $(1,171,543) provided by investing activities for the same period a year ago. The change is primarily attributable to a decrease in cash provided by investment in a joint venture of $1,408,155, offset by an increase in additions to leasehold improvements and increase intangible assets.

For the three months ended June 30, 2020, net cash provided by financing activities amounted to $9,470,664, as compared to $8,018,325 net cash used in financing activities for the same period a year ago. The increase is primarily due to proceeds of notes payable and proceeds from equity financing. Additionally, we borrowed an one-year loan of $705,585 from Beijing Bank.

As of June 30, 2020, we had cash of approximately $18,477,212. Our total current assets as of June 30, 2020, were $63,557,480 and total current liabilities were $52,176,073, which resulted in a working capital of $11,381,407.

Contractual Obligations and Off-Balance Sheet Arrangements

Contractual Obligations

The following table summarizes our contractual obligations:

Contractual obligations	Payments due by period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Short-term loan payable	$	2,121,720		2,121,720		-		-		-
Notes payable		26,715,374		26,715,374		-		-		-
Long-term loan payable		3,551,507		-		3,551,507		-		-
Long-Term Debt Obligations		-		-		-		-		-
Capital Lease Obligations		-		-		-		-		-
Operating Lease Obligations		17,383,372		466,213		9,818,579		4,769,610		2,328,970
Purchase Obligations		-		-		-		-		-
Other Long-Term Liabilities Reflected on the Registrant’s Balance Sheet under GAAP*		68,980		-		68,980		-		-
Total	$	49,840,953		29,303,307		13,439,066		4,769,610		2,328,970

* This refers to warrants to purchase shares of common stock issued to an institutional investor and a placement agent (See Note 19).

39

Off-balance Sheet Arrangements

We do not have any outstanding financial guarantees or commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as stockholder’s equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

Exchange Rates

Our subsidiaries and affiliated companies in the PRC maintain their books and records in RMB, the lawful currency of the PRC. In general, for consolidation purposes, we translate their assets and liabilities into USD using the applicable exchange rates prevailing at the balance sheet date, and the statement of income is translated at average exchange rates during the reporting period. Adjustments resulting from the translation of their financial statements are recorded as accumulated other comprehensive income.

The exchange rates used to translate amounts in RMB into USD for the purposes of preparing the audited consolidated financial statements or otherwise disclosed in this report were as follows:

	June 30, 2020	March 31, 2020
Balance sheet items, except for the registered and paid-up capital, as of end of period	USD1: RMB0.1414	USD1: RMB0.1410
Amounts included in the statement of Operations and statement of cash flows for the period ended	USD1: RMB0.1411	USD1: RMB0.1436

Inflation

We believe that inflation has not had a material effect on our operations to date.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

40

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of June 30, 2020, we carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended. Based upon such evaluation, our chief executive officer and chief financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were ineffective. Such conclusion is based on the presence of the following material weakness in internal control over financial reporting as described in our annual report on Form 10-K for the year ended March 31, 2020:

Accounting and Finance Personnel Weaknesses - As noted in Item 9A of our annual reports on Form 10-K for the preceding fiscal years, management concluded that in light of the inexperience of our accounting staff with respect to the requirements of U.S. GAAP-based reporting and SEC rules and regulations, we did not maintain effective controls and did not implement adequate and proper supervisory review to ensure that significant internal control deficiencies can be detected or prevented.

Management’s assessment of the control deficiency over accounting and finance personnel as of June 30, 2020 considered the same factors, including:

● the number of adjustments proposed by our independent auditors during our quarterly review and annual audit processes;

● how adequately we complied with U.S. GAAP on transactions; and

● how accurately we prepared supporting information to provide to our independent auditors on a quarterly and annual basis.

Based on the above factors, management concluded that the lack of timely reconciliation of booking and recording from China GAAP to US GAAP and lack of accounting staff with sufficient U.S. GAAP experiences are material weaknesses.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934) during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, other than the following:

Remediation of Material Weakness for the quarter ended June 30, 2020

Subsequent to the identification of the material weakness, we have enhanced existing controls and design and implemented new controls. We have devoted significant time and attention to remediate the above material weakness. For example, we redesigned our system to retrieve data faster, so we are able to identify and reconcile the GAAP difference more efficiently. In addition, we trained our accounting staff with U.S. GAAP knowledge, so they can meet the requirement from our auditors more efficiently. These improvements to our internal control infrastructure were implemented, and were in place in connection with the preparation of our financial statements for the three months ended June 30, 2020. As such, we believe that the remediation initiative outlined above will be sufficient to remediate as the changes become operational for future years the material weakness in internal control over financial reporting as discussed.

41

PART II – OTHER INFORMATION

ITEM 6. EXHIBITS.

EXHIBIT INDEX

Exhibit Number	Description
4.1	Form of Warrant to the investors in June 2020 (Incorporated by reference from the registrant’s Current Report on Form 8-K filed on June 2, 2020)
4.2	Form of Warrant to the placement agent in June 2020 (Incorporated by reference from the registrant’s Current Report on Form 8-K filed on June 2, 2020)
10.1	Form of Securities Purchase Agreement dated June 1, 2020 (Incorporated by reference from the registrant’s Current Report on Form 8-K filed on June 2, 2020)
10.2	Engagement Agreement with H.C. Wainwright & Co. dated May 31, 2020 (Incorporated by reference from the registrant’s Current Report on Form 8-K filed on June 2, 2020)
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 and Chief Financial Officer
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

42

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 14, 2020	By:	/s/ Lei Liu
		Lei Liu Chief Executive Officer
Date: August 14, 2020	By:	/s/ Ming Zhao
		Ming Zhao
		Chief Financial Officer

43

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Lei Liu, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of China Jo-Jo Drugstores, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2020	By:	/s/ Lei Liu
		Lei Liu
		Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Ming Zhao, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of China Jo-Jo Drugstores, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2020	By:	/s/ Ming Zhao
		Ming Zhao
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION

In connection with the periodic report of China Jo-Jo Drugstores, Inc. (the “Company”) on Form 10-Q for the quarter ending June 30, 2020, as filed with the Securities and Exchange Commission (the “Report”), we, Lei Liu, Chief Executive Officer (Principal Executive Officer), and Ming Zhao, Chief Financial Officer (Principal Financial and Accounting Officer) of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of our knowledge:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

Date: August 14, 2020	By:	/s/ Lei Liu
		Lei Liu
		Chief Executive Officer
		(Principal Executive Officer)

Date: August 14, 2020	By:	/s/ Ming Zhao
		Ming Zhao
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

XML

Document and Entity Information - shares	3 Months Ended
	Jun. 30, 2020	Aug. 13, 2020
Document and Entity Information [Abstract]
Entity Registrant Name	CHINA JO-JO DRUGSTORES, INC.
Entity Central Index Key	0001413263
Amendment Flag	false
Current Fiscal Year End Date	--03-31
Document Type	10-Q
Document Period End Date	Jun. 30, 2020
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2020
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		37,961,790
Entity File Number	001-34711
Entity incorporate state country code	NV

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2020	Mar. 31, 2020
CURRENT ASSETS
Cash and cash equivalents	$ 18,477,212	$ 16,176,318
Restricted cash	15,095,116	14,806,288
Financial assets available for sale	157,644	157,159
Notes receivable	28,290	57,005
Trade accounts receivable	8,984,595	9,770,656
Inventories	11,141,411	12,247,004
Other receivables, net	5,599,565	5,069,442
Advances to suppliers	2,237,720	1,174,800
Other current assets	1,835,927	1,528,540
Total current assets	63,557,480	60,987,212
PROPERTY AND EQUIPMENT, net	7,095,690	7,633,740
OTHER ASSETS
Long-term investment	3,963,758	2,544,451
Farmland assets	752,257	742,347
Long term deposits	1,447,547	1,456,384
Other noncurrent assets	1,049,184	1,046,763
Operating lease right-of-use assets	19,351,247	21,711,376
Intangible assets, net	3,358,407	3,393,960
Total other assets	29,922,400	30,895,281
Total assets	100,575,570	99,516,233
CURRENT LIABILITIES
Short-term bank loan	2,121,720	1,410,130
Accounts payable, trade	16,107,594	21,559,494
Notes payable	26,715,374	26,605,971
Other payables	2,176,992	2,522,330
Other payables - related parties	491,300	490,218
Customer deposits	795,903	708,140
Taxes payable	328,237	119,247
Accrued liabilities	672,469	753,612
Long-term loan payable-current portion	2,300,271	2,287,742
Current portion of operating lease liabilities	466,213	981,090
Total current liabilities	52,176,073	57,437,974
Long-term loan payable	3,551,507	4,115,958
Long-term operating lease liabilities	16,917,159	19,049,575
Employee Deposits	14,145	70,507
Purchase option and warrants liability	68,980	64,090
Total liabilities	72,727,864	80,738,104
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock; $0.001 par value; 250,000,000 shares authorized; 37,961,790 and 32,936,786 shares issued and outstanding as of June 30, 2020 and March 31, 2020	37,962	32,937
Preferred stock; $0.001 par value; 10,000,000 shares authorized; nil issued and outstanding as of June 30 and March 31, 2020
Additional paid-in capital	63,568,876	54,209,301
Statutory reserves	1,309,109	1,309,109
Accumulated deficit	(36,632,346)	(36,400,837)
Accumulated other comprehensive income	1,533,993	1,440,424
Total stockholders' equity	29,817,594	20,590,934
Noncontrolling interests	(1,969,888)	(1,812,805)
Total equity	27,847,706	18,778,129
Total liabilities and stockholders' equity	$ 100,575,570	$ 99,516,233

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2020	Mar. 31, 2020
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	37,961,790	32,936,786
Common stock, shares outstanding	37,961,790	32,936,786
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding

XML

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Income Statement [Abstract]
REVENUES, NET	$ 31,054,312	$ 25,280,784
COST OF GOODS SOLD	23,074,093	19,219,346
GROSS PROFIT	7,980,219	6,061,438
SELLING EXPENSES	6,272,407	5,968,551
GENERAL AND ADMINISTRATIVE EXPENSES	2,120,166	2,851,612
TOTAL OPERATING EXPENSES	8,392,573	8,820,163
LOSS FROM OPERATIONS	(412,354)	(2,758,725)
OTHER INCOME (EXPENSE):
INTEREST INCOME	163,588	47,873
INTEREST EXPENSE	(127,387)
OTHER	50,021	(62,485)
CHANGE IN FAIR VALUE OF PURCHASE OPTION AND WARRANTS LIABILITY	(4,890)	403,555
LOSS BEFORE INCOME TAXES	(331,022)	(2,369,782)
PROVISION FOR INCOME TAXES	57,570	8,388
NET LOSS	(388,592)	(2,378,170)
LESS: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST	(157,083)	(243,219)
NET LOSS ATTRIBUTABLE TO CHINA JO-JO DRUGSTORES, INC.	(231,509)	(2,134,951)
OTHER COMPREHENSIVE LOSS
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS	93,569	(405,238)
COMPREHENSIVE LOSS	$ (295,023)	$ (2,783,408)
WEIGHTED AVERAGE NUMBER OF SHARES:
Basic	34,428,271	32,453,269
Diluted	34,428,271	32,453,269
LOSS PER SHARES:
Basic	$ (0.01)	$ (0.07)
Diluted	$ (0.01)	$ (0.07)

XML

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Common Stock	Additional paid-in capital	Retained Earnings Statutory reserves	Retained Earnings Accumulated deficit	Accumulated other comprehensive income/(loss)	Non-controlling interest	Total
Balance at Mar. 31, 2019	$ 28,937	$ 44,905,664	$ 1,309,109	$ (30,587,468)	$ 2,508,964	$ (1,194,039)	$ 16,971,167
Balance, Share at Mar. 31, 2019	28,936,778
Stock based compensation		34,560					34,560
Stock based compensation, Shares
Sale of stock and warrants	$ 4,000	9,269,077					9,273,077
Sale of stock and warrants, shares	4,000,008
Net loss				(2,134,951)		(243,219)	(2,378,170)
Foreign currency translation loss					(403,620)		(403,620)
Balance at Jun. 30, 2019	$ 32,937	54,209,301	1,309,109	(32,722,419)	2,105,344	(1,437,258)	23,497,014
Balance, Shares at Jun. 30, 2019	32,936,786
Balance at Mar. 31, 2020	$ 32,937	54,209,301	1,309,109	(36,400,837)	1,440,424	(1,812,805)	18,778,129
Balance, Share at Mar. 31, 2020	32,936,786
Exercise of warrants	$ 25	77,475					77,500
Exercise of warrants, shares	25,000
Sale of stock and warrants	$ 5,000	9,282,100					9,282,100
Sale of stock and warrants, shares	5,000,004
Net loss				(231,509)		(157,083)	(388,592)
Foreign currency translation loss					93,569		93,569
Balance at Jun. 30, 2020	$ 37,962	$ 63,568,876	$ 1,309,109	$ (36,632,346)	$ 1,533,993	$ (1,969,888)	$ 27,847,706
Balance, Shares at Jun. 30, 2020	37,961,790

XML

Condensed Consolidated Statements of Cash Flows (Unaudited0 - USD ($)	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ (388,592)	$ (2,378,170)
Adjustments to reconcile net income to net cash used in operating activities:
Bad debt direct write-off and provision	18,320	758,231
Depreciation and amortization	760,540	499,175
Stock based compensation		34,560
Change in fair value of purchase option derivative liability	4,890	(403,555)
Accounts receivable, trade	444,672	(959,680)
Notes receivable	28,824	81,326
Inventories and biological assets	1,140,697	2,851,652
Other receivables	(293,466)	371,054
Advances to suppliers	(952,166)	242,652
Other current assets	(583,285)	(450,042)
Long term deposit	13,299	58,630
Other noncurrent assets	806	(8,631)
Accounts payable, trade	(5,505,493)	(8,968,168)
Other payables and accrued liabilities	(435,365)	(105,522)
Customer deposits	85,379	116,398
Taxes payable	182,583	95,326
Net cash used in operating activities	(5,478,357)	(8,164,764)
CASH FLOWS FROM INVESTING ACTIVITIES:
Disposal of financial assets available for sale		14,658
Acquisition of equipment	(10,536)	(210,356)
Increase intangible assets	(19,474)	(433,111)
Investment in a joint venture	(1,408,155)
Additions to leasehold improvements	(159,272)	(542,734)
Net cash used in investing activities	(1,597,437)	(1,171,543)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term bank loan	705,585
Repayment of third parties loan	(570,338)
Proceeds from notes payable	14,392,242	15,372,260
Repayment of notes payable	(14,364,978)	(16,167,012)
Decrease in Employee Deposits	(56,447)
Exercise of warrants	77,500
Proceeds from equity financing	9,287,100	9,273,077
Repayment of other payables-related parties		(460,000)
Net cash provided by financing activities	9,470,664	8,018,325
EFFECT OF EXCHANGE RATE ON CASH	194,852	(277,067)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	2,589,722	(1,595,049)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period	30,982,606	24,745,202
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, end of period	33,572,328	23,150,153
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	127,387
Cash paid for income taxes		$ 29,176

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Description of Business and Organization

3 Months Ended

Jun. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [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) are, 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"), Hangzhou Jiuyi Medical Technology Co. Ltd. ("Jiuyi Technology"), its wholly-owned subsidiaries.

The Company is an online and offline retailer and wholesale distributor of pharmaceutical and other healthcare products in the People's Republic of China ("China" or the "PRC"). The Company's offline retail business is comprised primarily of pharmacies, which are operated by Hangzhou Jiuzhou Grand Pharmacy Chain Co., Ltd. ("Jiuzhou Pharmacy"), a company that the Company controls through contractual arrangements. On March 31, 2017, Jiuxin Management established a subsidiary, Lin'An Jiuzhou Pharmacy Co., Ltd ("Lin'An Jiuzhou") to operates drugstores in Lin'an City.

On January 9, 2020, in order to continue expanding and strengthening its local drugstore network, the Company acquired a local drugstores chain with ten stores at a price of $0.14 (RMB 1). The acquired chain agreed to cease their stores' business and liquidate all of the stores 'accounts after Jiuzhou Pharmacy acquired them. In March 2020, the chain was dissolved and its government insurance reimbursement certificates have been transferred to Jiuzhou Pharmacy.

The Company's offline retail business also includes four 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. In May 2014, Shouantang Technology established Hangzhou Shouantang Bio-technology Co., Ltd. ("Shouantang Bio"). In May 2016, Shouantang Bio set up and held 49% of Hangzhou Kahamadi Bio-technology Co., Ltd.("Kahamadi Bio"), a joint venture specializing in brand name development for nutritional supplements. In 2018, Jiuzhou Pharmacy invested a total of $741,540 (RMB5,100,000) in and held 51% of Zhejiang Jiuzhou Linjia Medical Investment and Management Co. Ltd ("Linjia Medical"), which operates two new clinics in Hangzhou as of March 31, 2020. On March 29, 2019, Jiuzhou Pharmacy formed and currently holds 51% of the equity of Zhejiang AyiGe Medical Health Management Co., Ltd.("Ayi Health"), which is intended to provide technical support such as IT and customer support to our health management business in the future.

The Company currently conducts its online retail pharmacy business through Jiuzhou Pharmacy, which holds the Company's online pharmacy license. On September 10, 2015, Renovation set up Jiuyi Technology to provide additional technical support such as webpage development to our online pharmacy business. In November 2015, the technical support function was transferred back to Jiuzhou Pharmacy, which hosts our online pharmacy.

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. On April 20, 2018, 10% of Jiuxin Medicine shares were sold to Hangzhou Kangzhou Biotech Co. Ltd. for a total proceeds of $79,625 (RMB 507,760).

The Company's herb farming business is conducted by Hangzhou Qianhong Agriculture Development Co., Ltd. ("Qianhong Agriculture"), a wholly-owned subsidiary of Jiuxin Management. Due to the complexity of the cultivation business, Qianhong Agriculture has not grown herbs in the three months ended June 30, 2020. 

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

Entity Name	Background	Ownership
Renovation	●     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 $14.5 million 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 million fully paid   ●     Carries out herb farming business	100%
Jiuzhou Pharmacy (1)	●     Established in the PRC on September 9, 2003 ●     Registered capital of RMB 5 million fully paid   ●     Operates the "Jiuzhou Grand Pharmacy" stores in Hangzhou	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)
Jiuxin Medicine	●     Established in PRC on December 31, 2003 ●     Acquired by Jiuzhou Pharmacy in August 2011 ●     10% of shares sold On April 20, 2018  ●     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)
Jiutong Medical	●     Established in the PRC on December 20, 2011 by Renovation ●     Registered capital of $2.6 million fully paid   ●     Currently has no operation	100%

Entity Name	Background	Ownership
Shouantang Bio	●     Established in the PRC in October, 2014 by Shouantang Technology  ●     100% held by Shouantang Technology  ●     Registered capital of RMB 1,000,000 fully paid ●     Sells nutritional supplements under its own brand name	100%
Jiuyi Technology	●     Established in the PRC on September 10, 2015 ●     100% held by Renovation  ●     Technical support to online pharmacy	100%
Kahamadi Bio	●     Established in the PRC in May 2016 ●     49% held by Shouantang Bio ●     Registered capital of RMB 10 million ●     Develop brand name for nutritional supplements	49%
Lin'An Jiuzhou	●     Established in the PRC in March 31, 2017 ●     100% held by Jiuxin Management ●     Registered capital of RMB 5 million ●     Explore retail pharmacy market in Lin'An City	100%
Linjia Medical	●     Established in the PRC in September27, 2017 ●     51% held by Jiuzhou Pharmacy ●     Registered capital of RMB 20 million ●     Operates local clinics	VIE by contractual arrangements as a controlled subsidiary of Jiuzhou Pharmacy (2)
Ayi Health	●     Established in the PRC in March 29, 2019 ●     51% held by Jiuzhou Pharmacy ●     Registered capital of RMB 10 million ●     Provide technical Support for medial service	VIE by contractual arrangements as a controlled subsidiary of Jiuzhou Pharmacy (2)

(1)

Jiuzhou Pharmacy, Jiuzhou Clinic and Jiuzhou Service had been under the common control of Mr. Lei Liu   and Ms. Li Qi, the three shareholders (the "Owners") since their respective establishment dates, pursuant to agreements among the Owners to vote their interests in concert as memorialized in a voting rights agreement. Based on such voting agreement, the Company has determined that common control exists among these three companies. The Owners have operated these three companies in conjunction with one another since each company's respective establishment date. Jiuxin Medicine is also deemed under the common control of the Owners as 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: a consulting services agreement, operating agreement, equity pledge agreement, voting rights agreement and option agreement. Because such agreements 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 each of the three companies (as well as 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 under the control of Jiuzhou Pharmacy, Jiuxin Medicine and Shouantang Bio are consolidated into the financial statements of the Company.

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Liquidity

3 Months Ended

Jun. 30, 2020

Liquidity [Abstract]

LIQUIDITY

Note 2 – LIQUIDITY

The Company's accounts have been prepared in accordance with the accounting principles generally accepted in the United States of America ("US GAAP") on a going concern basis. The going concern basis assumes that assets are realized and liabilities are extinguished in the ordinary course of business at amounts disclosed in the financial statements. The Company's ability to continue as a going concern depends upon aligning its sources of funding (debt and equity) with its expenditure requirements and repayment of the short-term debts as and when they become due.

The drug retail business is a highly competitive industry in the PRC. Several large drugstore chains and a variety of single stores operate in Hangzhou City and Zhejiang Province. In order to increase the Company's competitive advantages and gain more local retail pharmacy market share, from fiscal year 2018, we opened fifty-nine new stores in Hangzhou. As a result, the Company incurred significant incremental expense related to rental, labor hiring and training, and marketing activities. As the retail pharmaceutical market becomes more competitive in recent years, a new store usually cannot make profit in its operation until a year later. In fact, the Company incurred significant expenses with limited incremental revenue in the period it opened new stores. At their openings, except for four stores, almost all of the new stores were without government insurance reimbursement certificates. In fact, it usually takes more than one year for a new store to apply for and obtain the local government insurance reimbursement certificate. As of June 30, 2020, the Company had obtained forty-seven reimbursement certificates for stores opened in fiscal 2018 and thereafter. Historically in a mature store, more than half of the total revenue were collected from the individual customers' government insurance program. The Company is in the process of actively applying certificates for all of its new stores. In the future, as more and more stores obtain certificates, the Company expect its new store revenue to increase and eventually contribute positive operating cash flow.

The Company's principal sources of liquidity consist of existing cash, equity financing, bank facilities from local banks as well as personal loans from its principal shareholders if necessary. On April 15, 2019, the Company closed a registered direct offering of 4,000,008 shares of common stock at $2.50 per share with gross proceeds of $10,000,020 from its effective shelf registration statement on Form S-3 pursuant to a Securities Purchase Agreement dated April 11, 2019 (the "2019 Securities Purchase Agreement"), by and among the Company and the investors named therein. On June 3, 2020, the Company closed a registered direct offering of 5,000,004 shares of common stock at $2.00 per share with gross proceeds of $10,000,008 from its effective shelf registration statement on Form S-3 pursuant to a Securities Purchase Agreement dated June 1, 2020 (the "2020 Securities Purchase Agreement"), by and among the Company and the investors named therein.

The Company has a credit line agreement from a local bank as displayed in detail in Note 16. As of June 30, 2020, approximately $0.74 million of the aforementioned bank credit line was available for further borrowing. Additionally, Jiuzhou Pharmacy obtained a credit line of approximately $7,175,000 (RMB50,000,000) from Haihui Commercial Factoring (Tianjin) Co. Ltd. ("Haihui Commercial") for three years beginning July 26, 2019. As of June 30, 2020, the full amount has been borrowed from Haihui Commercial. Any borrowing thereunder is guaranteed by a third-party guarantor company, and secured by the Company's assets pursuant to a collateral agreement, as well as personal guarantees of some of its principal shareholders.

The Company has also obtained additional government insurance reimbursement certificates for its stores opened in the last two years. As the sales reimbursed from the government account for more than half of sales in a mature store, the certificates may significantly increase the sales of these stores in the next 12 months. Additionally, with the proceeds from the registered direct financing closed on April 15, 2019 and June 3, 2020, and increased credit line, the Company believes it can support its operations for at least the next 12 months.

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Summary of Significant Accounting Policies

3 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Note 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation and consolidation

The accompanying condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). The consolidated financial statements include the financial statements of the Company, its wholly-owned 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.

Control and common control are 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 in the voting rights 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.  

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 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. 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 suppliers.

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 consolidated financial statements in conformity with US GAAP 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 consolidated financial statements relate to the assessment of the carrying values of accounts receivable, advances to suppliers and related allowance for doubtful accounts, useful lives of property and equipment, inventory reserve and fair value of its purchase option derivative liability. Because of the use of estimates inherent in the financial reporting process, actual results could materially differ from those estimates.

Fair value measurements

The Company establishes a three-level valuation hierarchy of valuation techniques based on observable and unobservable inputs, which may be used to measure fair value and include the following:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement.

The Company's financial assets and liabilities, which include financial instruments as defined by FASB ASC 820, include cash and cash equivalents, restricted cash, financial assets available for sales, accounts receivable, notes receivables, other receivable, accounts payable, notes payable, other payable, long-term debt and derivatives. The carrying amounts of cash and cash equivalents, restricted cash, accounts receivable, notes receivables, and accounts payable are a reasonable approximation of fair value due to the short maturities of these instruments (Level 1). The carrying amount of notes payable approximates fair value based on borrowing rates of similar bank loan currently available to the Company (Level 2) (See Note 16). The carrying amount of Long-term loan payable approximates fair value based on borrowing rates of similar bank loan currently available to the Company (Level 2) (See Note 17).The carrying amount of the Company's derivative instruments is recorded at fair value and is determined based on observable inputs that are corroborated by market data (Level 2) (See Note 21). The carrying amount of the financial assets available for sale is recorded at fair value and is determined based on unobservable inputs (Level 3) (See Note 4). The carrying amount of the employee deposits is recorded at fair value and is determined based on unobservable inputs (Level 3) (See Note 22).

	Active Market for Identical Assets (Level 1)		Observable Inputs (Level 2)		Unobservable Inputs (Level 3)		Total Carrying Value
Cash, cash equivalents and restricted cash	$	33,572,328		-		-		33,572,328
Financial assets available for sale		-		-		157,644		157,644
Account receivable		8,984,595		-		-		8,984,595
Notes receivable		28,290		-		-		28,290
Other receivable		5,599,565		-		-		5,599,565
Accounts payable		16,107,594		-		-		16,107,594
Notes payable		-		26,715,374		-		26,715,374
Other payable		2,176,992		-		-		2,176,992
Long-term loan payable		-		5,851,778		-		5,851,778
Employee Deposits		-		-		14,145		14,145
Warrants liability		-		68,980		-		68,980
Total	$	66,469,364		32,636,132		171,789		99,277,285

Revenue recognition

Effective March 31, 2018, the Company began recognizing revenue under Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC 606"), using the modified retrospective transition method. The impact of adopting the new revenue standard was not material to the Company's consolidated financial statements. The core principle of this new revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

● Step 1: Identify the contract with the customer

● Step 2: Identify the performance obligations in the contract

● Step 3: Determine the transaction price

● Step 4: Allocate the transaction price to the performance obligations in the contract

● Step 5: Recognize revenue when the company satisfies a performance obligation

In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606's definition of a "distinct" good or service (or bundle of goods or services) if both of the following criteria are met:

● The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct).

● The entity's promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).

If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct.

The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, some sales taxes). The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate.

The Company's revenue is net of value added tax ("VAT") collected on behalf of the PRC tax authorities with 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.

Certain contract liabilities primarily represent the Company's obligation to transfer additional goods or services to a customer for which the Company has received consideration, for example, membership points. The consideration received remains a contract liability until goods or services have been provided to the retail customer. The estimated amount based on accrued membership points was deducted from sales revenue.

The following is a discussion of the Company's revenue recognition policies by segment under the new revenue recognition accounting standard:

Pharmacy retail sales

The physical pharmacies sell prescription drugs, over-the-counter ("OTC") drugs, traditional Chinese medicine, nutritional supplements, medical devices and sundry products. Revenue from sales of prescription medicine at 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 drugstores is recognized at the point of sale, which is when a customer pays for and receives the merchandise. Usually the majority merchandise, such as prescription and OTC drugs, are not refundable after the customers leave the counter. Returns of other products, such as sundry products, are minimal. Sales of drugs reimbursed by the local government medical insurance agency and receivables from the agency are recognized when a customer pays for the drugs at a store. The Company based on historical experience, a reserve for potential losses from denial of reimbursement on certain unqualified drugs is made to the receivables from the government agency. Additionally, several onsite clinics adjacent to pharmacies provide limited medical services. Revenue from medical services is recognized after the service has been rendered to a customer. As revenue from medical services is minimal compared to pharmacy retail sales, it is included as part of the pharmacy retail sales.

The Company deduct the membership rewards directly from the retail revenue, and present such amounts in net sales as opposed to the current reduction of operation expense classification. Membership rewards, usually membership points, are accumulated by customers based on their historical spending levels. The Company has determined that there is an additional performance obligation to those customers at the time of the initial transaction. The customers can then redeem these points against the prices of merchandises they purchase in the future. At the end of each period, unredeemed membership rewards are reflected as a contract liability.

Online pharmacy sales

The online pharmacy segment sells various health products except for prescription drugs. Revenue from online pharmacy sales is recognized when merchandise is shipped to customers. While most deliveries take one day, certain deliveries may take longer depending on a customer's location. Any loss caused in a shipment will be reimbursed by the Company's courier company. The Company's sales policy allows for the return of certain merchandises without reason within seven days after a customer's receipt of the applicable merchandise. Historically, sales returns seven days after merchandise receipts have been minimal.

Wholesale

Jiuxin Medicine purchases medicine in quantity and distributes products primarily to local pharmacies and medical products dealers. Revenue from sales of merchandise to non-retail customers is recognized when the merchandise is transferred to customers. Historically, sales returns have been minimal.

Disaggregation of Revenue

The following table disaggregates the Company's revenue by major source in each segment for the three months ended June 30, 2020 and 2019:

For the three  months ended June 30	2020		2019
Retail drugstores
Prescription drugs	$	7,406,774	$	5,695,286
OTC drugs		6,818,484		7,240,228
Nutritional supplements		1,347,769		1,231,133
TCM		949,012		1,104,050
Sundry products		422,551		298,198
Medical devices		1,865,884		1,166,093
Total retail revenue	$	18,810,474	$	16,734,988
Online pharmacy
Prescription drugs	$	1,869,643	$	-
OTC drugs		1,322,811		1,024,602
Nutritional supplements		221,031		107,194
TCM		23,199		13,681
Sundry products		546,720		438,736
Medical devices		929,430		859,392
Total online revenue	$	4,912,834	$	2,443,605
Drug wholesale
Prescription drugs	$	5,966,148	$	4,880,491
OTC drugs		915,146		1,074,261
Nutritional supplements		59,841		21,691
TCM		28,967		98,828
Sundry products		2,597		5,682
Medical devices		358,305		21,238
Total wholesale revenue	$	7,331,004	$	6,102,191
Total revenue	$	31,054,312	$	25,280,784

Contract Balances

Contract liabilities primarily represent the Company's obligation to transfer additional goods or services to a customer for which the Company has received consideration, for example membership points and membership rewards. The consideration received remains a contract liability until goods or services have been provided to the retail customer.

The following table provides information about receivables and contract liabilities from contracts with customers:

	June 30, 2020		March 31, 2020
Trade receivable(included in accounts receivable, net)	$	8,984,595	$	9,770,656
Contract liabilities (included in accrued expenses)		1,112,508		1,106,982

Restricted cash

The Company's restricted cash consists of cash and long-term deposits 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.

The following represents a reconciliation of cash and cash equivalents in the Consolidated Condensed Balance Sheets to total cash, cash equivalents and restricted cash in the Consolidated Condensed Statements of Cash Flows as of June 30, 2020 and March 31, 2020:

	June 30, 2020		March 31, 2020
Cash and cash equivalents	$	18,477,212	$	16,176,318
Restricted cash		15,095,116		14,806,288
Cash, cash equivalents and restricted cash	$	33,572,328	$	30,982,606

Accounts receivable

Accounts receivable represents the following: (1) amounts due from banks relating to retail sales that are paid or settled by the customers' debit or credit cards, (2) amounts due from government social security bureaus and commercial health insurance programs relating to retail sales of drugs, prescription medicine, and medical services that are paid or settled by the customers' medical insurance cards, (3) amounts due from non-bank third party payment instruments such as Alipay and certain e-commerce platforms and (4) 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 necessary. In the Company's retail business, accounts receivable mainly consist of reimbursements due from the government insurance bureaus and commercial health insurance programs and are usually collected within two or three months. The Company directly writes off delinquent account balances, which it determines to be uncollectible after confirming with the appropriate bureau or program each month. Additionally, the Company also makes estimated reserves on related outstanding accounts receivable based on historical trends.

In the Company's online pharmacy business, accounts receivable primarily consist of amounts due from non-bank third party payment instruments such as Alipay and certain e-commerce platforms. To purchase pharmaceutical products from an e-commerce platforms such as Tmall, customers are required to submit payment to certain non-bank third party payment instruments, such as Alipay, which, in turn, reimburse the Company within seven days to a month. Except for customer returns of sold products, the receivables from these payments instruments are rarely uncollectible.

In its wholesale business, the Company uses the aging method to estimate the allowance for anticipated uncollectible receivable balances. Under the aging method, bad debt percentages are determined by management, based on historical experience and the 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.

Advances to suppliers

Advances to suppliers consist of prepayments to its vendors, such as pharmaceutical manufacturers and other distributors. Since the acquisition of Jiuxin Medicine, the Company have transferred almost all logistics services of its retail drugstores to Jiuxin Medicine. Jiuzhou Pharmacy only directly purchases certain non-medical products, such as certain nutritional supplements. As a result, almost all advances to suppliers are made by Jiuxin Medicine.

Advances to suppliers for its drug wholesale business consist of prepayments to its vendors, such as pharmaceutical manufacturers and other distributors. The Company typically receive products from vendors within three to nine months after making prepayments. The Company continuously monitor delivery from, and payments to, its vendors while maintaining a provision for estimated credit losses based upon historical experience and any specific supplier issues, such as discontinuing of inventory supply, that have been identified.

Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first in first out (FIFO) method. The Company carries out physical inventory counts on a monthly basis at each store and warehouse location. Herbs that the Company farms are recorded at their cost, which includes direct costs such as seed selection, fertilizer, labor costs that are spent in growing herbs on the leased farmland, and indirect costs such as amortization of farmland development cost. All costs are accumulated until the time of harvest and then allocated to harvested herbs costs when the herbs are sold. The Company periodically reviews its inventory and records write-downs to inventories for shrinkage losses and damaged merchandise that are identified. The Company provides a reserve for estimated inventory obsolescence or excess quantities on hand equal to the difference, if any, between the cost of the inventory and its estimated realizable value.

Farmland assets

Herbs that the Company farms are recorded at their cost, which includes direct costs such as seed selection, fertilizer, and labor costs that are spent in growing herbs on the leased farmland, and indirect costs such as amortization of farmland development costs. Since April 2014, amortization of farmland development costs has been expensed instead of allocated into inventory due to unpredictable future market value of planted gingko trees.

All related costs described in the above are accumulated until the time of harvest and then allocated to harvested herbs when they are sold.

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	3-5 years
Office equipment & furniture	3-5 years
Buildings	35 years

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

Intangible assets

Intangible assets are acquired individually or as part of a group of assets, and 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
Land use rights	50 years
Software	3 years
License	Infinite

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

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 fixed assets and farmland assets impaired for the three months ended June 30, 2020 and 2019.

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 payable. Such notes payable are generally short term in nature due to their short maturity period of six to nine months.

Income taxes

The Company accounts for income taxes following the liability method pursuant to FASB ASC 740 "Income Taxes". Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rate is recognized in income in the period that includes the enactment date.

The Company also follows FASB ASC 740, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance on recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. As of June 30, 2020 and March 31, 2020, the Company did not have a liability for unrecognized tax benefits. It is the Company's policy to include penalties and interest expense related to income taxes as a component of other expense and interest expense, respectively, as necessary. The Company's historical tax years will remain open for examination by the local authorities until the statute of limitations has passed.

Under ASC 740-270, entities calculate the income tax provision for an interim period by distinguishing between elements recognized in the income tax provision through (1) applying an estimated annual effective tax rate (ETR) to a measure of year-to-date operating results referred to as "ordinary income (or loss)," and (2) discretely recognizing specific events (referred to as "discrete items") as they occur. Entities should revise the ETR, as necessary, as of the end of each successive interim period during its fiscal year based on changes to any of these estimates and judgments.

The ETR expected to apply for the full fiscal year is applied to year-to-date ordinary income (or loss) at the end of each interim period to compute the year-to-date income tax (or benefit) applicable to ordinary income or loss. Income tax expense (or benefit) related to each discrete item is individually determined and recognized in the interim period when the discrete item occurs. As a result, the income tax provision (or benefit) for an interim period might include elements that apply to ordinary income or loss, as well as elements related to discrete items. Discrete items include significant items that are unusual or that occur infrequently. Determining which items are unusual or infrequent often requires a significant degree of judgment.

Under ASC 740-270-30-36, entities subject to income taxes in multiple jurisdictions should apply one overall ETR instead of separate ETRs for each jurisdiction when calculating the interim-period income tax or benefit related to consolidated ordinary income (or loss) for the year-to-date interim period, except in certain circumstances. The income tax provision or benefit for each interim period is the difference between the year-to-date amount for the current period and the year-to-date amount for the prior period.

Value added tax

Sales revenue represents the invoiced value of goods, net of VAT. All of the Company's products are sold in the PRC and are subject to a VAT on the gross sales price. The VAT rates range up to 17%, depending on the type of products sold. The VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing or acquiring its finished products. The Company recorded a VAT payable net of payments in the accompanying financial statements.

Stock based compensation

The Company follows the provisions of FASB ASC 718, "Compensation — Stock Compensation," which establishes accounting standards for non-employee and employee stock-based awards. Under the provisions of FASB ASC 718, the fair value of stock issued is used to measure the fair value of services received as the Company believes such approach is a more reliable method of measuring the fair value of the services. For non-employee stock-based awards, fair value is measured based on the value of the Company's common stock on the date that the commitment for performance by the counterparty has been reached or the counterparty's performance is complete. The fair value of the equity instrument is calculated and then recognized as compensation expense over the requisite performance period. For employee stock-based awards, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense with graded vesting on a straight–line basis over the requisite service period for the entire award.

Advertising and promotion costs

Advertising and promotion costs are expensed as incurred and amounted to $77,068 and $80,049 for the three months ended June 30, 2020 and 2019, respectively. Such costs consist primarily of print and promotional materials such as flyers to local communities.

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, 2020 and at March 31, 2020 were translated at 1 RMB to 0.1414 USD and at 1 RMB to 0.1410 USD, respectively. The average translation rates applied to income and cash flow statement amounts for the three months ended June 30, 2020 and 2019 were at 1 RMB to 0.1411 USD and at 1 RMB to 0.1466 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. Since March 31, 2015, balances at financial institutions and state-owned banks within the PRC are covered by insurance up to RMB 500,000 (USD 72,800) per bank. As of June 30, 2020 and March 31, 2020, the Company had deposits totaling $24,279,528 and $30,974,714 that were covered by such limited insurance, respectively. Any balance over RMB 500,000 (USD 72,800) per bank in PRC will not be covered. To date, the Company has not experienced any losses in such accounts.

For the three months ended June 30, 2020, two vendors accounted for 35.0% of the Company's total purchases and two vendors accounted for more than 10% of total advances to suppliers. For the three months ended June 30, 2019, two vendors accounted for 49.2% of the Company's total purchases and two vendors accounted for more than 10% of total advances to suppliers.

For the three months ended June 30, 2020, no customer accounted for more than 10% of the Company's total sales and more than 10% of total accounts receivable. For the three months ended June 30, 2019, no customer accounted for more than 10% of the Company's total sales or more than 10% of total accounts receivable.

Leases

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). Lessees are required to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). The liability is equal to the present value of lease payments. The asset is based on the liability, subject to certain adjustments, such as for initial direct costs. For income statement purposes, a dual model was retained, requiring leases to be classified as either operating or finance leases. Operating leases result in straight-line expense (similar to operating leases under the prior accounting standard) while finance leases result in a front-loaded expense pattern (similar to capital leases under the prior accounting standard). Lessor accounting is similar to the prior model, but updated to align with certain changes to the lessee model (e.g., certain definitions, such as initial direct costs, have been updated) and the new revenue standard, ASU 2014-9.

The Company adopted this new accounting standard on April 1, 2019 on a modified retrospective basis and applied the new standard to all leases through a cumulative-effect adjustment to beginning retained earnings. As a result, comparative financial information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which includes, among other things, the ability to carry forward the existing lease classification. On April 1, 2019, the Company recorded an after-tax transition adjustment to increase retained earnings by approximately $422,354. The new standard had a material impact on the unaudited condensed consolidated balance sheet, but did not materially impact the Company's consolidated operating results and had no impact on the Company's cash flows. The following is a discussion of the Company's lease policy under the new lease accounting standard:

The Company determines if an arrangement contains a lease at the inception of a contract. Right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of the remaining future minimum lease payments. As the interest rate implicit in the Company's leases is not readily determinable, the Company utilizes its incremental borrowing rate, determined by class of underlying asset, to discount the lease payments. The operating lease right-of-use assets also include lease payments made before commencement and exclude lease incentives.

The Company leases premises for retail drugstores, and offices under non-cancellable operating leases. Operating lease payments are expensed over the term of lease using straight line method. A majority of the Company's retail drugstore leases have a 3 to 10 year term. Usually within one to three months prior to the expiration date of a lease, the Company is required to notify the lessor and has a priority to continue renting the lease property if a lessor intends to lease property. The lease itself does not have restriction or covenants. If both parties agree to continue, a new lease contract with new lease terms has to been signed by both parties. Usually the rent may increase year by year based on the lease contract. Sublease is typically not allowed. Any damage, if made by the lessee, to the property and equipment within the property has to been fixed or reimbursed by the lessee. The Company does not have any leases entered into but which have not yet commenced. The Company has historically been able to renew a majority of its drugstores leases. The weighted average remaining lease term is 3.2 years and the weighted average discount rate is 4.19%. Under the terms of the lease agreements, the Company has no legal or contractual asset retirement obligations at the end of the leases. See Note 14 "Leases" for additional information.

Recent Accounting Pronouncements

Accounting pronouncements adopted

In June 2016, the FASB issued ASU 2016-13, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," providing financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. For public business entities that are U.S. Securities and Exchange Commission (SEC) filers, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The FASB has voted to defer the effective date for public companies that are smaller reporting companies to fiscal years beginning after December 15, 2022. All entities may adopt the amendments in this Update earlier as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the impact of the adoption of ASU 2016-13 on our consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13 Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement, which eliminates, adds, and modifies certain disclosure requirements for fair value measurements under ASC 820. This ASU is to be applied on a prospective basis for certain modified or new disclosure requirements, and all other amendments in the standard are to be applied on a retrospective basis. The new standard is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted. ASU 2018-13 has no impact on its consolidated financial statements.

 In January 2017, the FASB issued ASU No. 2017-04, "Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" ("ASU 2017-04"), which removes Step 2 from the goodwill impairment test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. Public business entity that is a U.S. Securities and Exchange Commission filer should adopt the amendments in this ASU for its annual or any interim goodwill impairment test in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted ASU 2017-04 on January 1, 2020. The adoption of the ASU 2017-04 did not have a material impact on the Company's consolidated financial statements.

Accounting pronouncements not yet effective to adopt

In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes" (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). ASU 2019-12 will simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company does not expect that the requirements of ASU 2019-12 will have a material impact on its consolidated financial statements.

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Financial Assets Available for Sale

3 Months Ended

Jun. 30, 2020

Financial Assets Available for Sale [Abstract]

FINANCIAL ASSETS AVAILABLE FOR SALE

Note 4 – FINANCIAL ASSETS AVAILABLE FOR SALE

As of June 30, 2020 and March 31, 2020, financial assets available for sale amounted to $157,644 (RMB 1,114,500) and $157,159 (RMB 1,114,500), respectively. As of June 30, 2020, the fair value of an investment in a limited partner (LP) in a private equity fund (PE fund), which is intended to invest in retail pharmaceutical business, is $72,551 (RMB514,500). Additionally, the Company has invested in Inner Mongolia Songlu Pharmaceutical Co.("Songlu Pharmaceutical"). As of June 30, 2020, the fair value of the investment is $84,608 (RMB600,000), which accounts for 0.5% shares of Songlu Pharmaceutical.

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Trade Accounts Receivable

3 Months Ended

Jun. 30, 2020

Receivables [Abstract]

TRADE ACCOUNTS RECEIVABLE

Note 5 – TRADE ACCOUNTS RECEIVABLE

Trade accounts receivable consisted of the following:

	June 30, 2020			March 31, 2020
Accounts receivable	$	11,378,909		$	12,034,726
Less: allowance for doubtful accounts		(2,394,314	)		(2,264,070	)
Trade accounts receivable, net	$	8,984,595		$	9,770,656

For the three months ended June 30, 2020 and 2019, $26,834 and $36,068 in accounts receivable were directly written off, respectively. As of June 30, 2020, $515,771 were pledged as collateral for borrowings from financial institutions. As of March 31, 2020, $627,055 were pledged as collateral for borrowings from financial institutions.

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Other Current Assets

3 Months Ended

Jun. 30, 2020

Prepaid Expense and Other Assets, Current [Abstract]

OTHER CURRENT ASSETS

Note 6 – OTHER CURRENT ASSETS

Other current assets consisted of the following:

	June 30, 2020		March 31, 2020
Rental deposits (1)	$	1,558,965	$	1,364,975
Prepaid and other current assets		276,962		163,565
Total	$	1,835,927	$	1,528,540

(1) The balance as of June 30, 2020 and March 31, 2020 includes short-term refundable rental security deposits.

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Property and Equipment

3 Months Ended

Jun. 30, 2020

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

Note 7 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	June 30, 2020			March 31, 2020
Building	$	5,898,768		$	5,880,627
Leasehold improvements		9,397,190			9,209,136
Farmland development cost		1,691,632			1,686,430
Office equipment and furniture		5,587,888			5,632,955
Motor vehicles		505,883			504,327
Total		23,081,361			22,913,475
Less: Accumulated depreciation		(13,758,940	)		(13,059,852	)
Impairment*		(2,226,731	)		(2,219,883	)
Property and equipment, net	$	7,095,690		$	7,633,740

* The variance of impairment from March 31, 2020 to June 30, 2020 is solely caused by exchange rate variance.

Depreciation expenses for property and equipment totaled $695,151 and $441,559 for the three months ended June 30, 2020 and 2019, respectively. There were no fixed assets impaired in the three months ended June 30, 2020 and June 30, 2019.

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Long-Term Investment

3 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

LONG-TERM INVESTMENT

Note 8 – LONG-TERM INVESTMENT

Long-term investment consists of the following:

	June 30, 2020			March 31, 2020
Kahamadi Bio (1)	$	3,214	*	$	6,217	*
Zhetong Medical (2)		3,960,544			2,538,234
Advance to suppliers, net	$	3,963,758		$	2,544,451

(1) It represents 49% investment in Kahamadi Bio. The investment is recorded using the equity method. Kahamadi Bio suffered loss of $3,015 the three months ended June 30, 2020.

(2) It represents 39% investment in Zhejiang Zhetong Medical Co., Ltd. Zhetong Medical was established in March 2020 to target potential acquisitions or cooperate with local pharmacies. By attracting more funds from local investors, the Company expects to continue growing its local network in the future.

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Advances to Suppliers

3 Months Ended

Jun. 30, 2020

Advances to Suppliers [Abstract]

ADVANCES TO SUPPLIERS

Note 9 – ADVANCES TO SUPPLIERS

Advances to suppliers consist of deposits, with or advances to, outside vendors for future inventory purchases. Most of the Company's suppliers 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, 2020 and March 31, 2020, advance to suppliers consist of the following:

	June 30, 2020			March 31, 2020
Advance to suppliers	$	3,160,046		$	2,198,863
Less: allowance for unrefundable advances		(922,326	)		(1,024,063	)
Advance to suppliers, net	$	2,237,720		$	1,174,800

For the three months ended June 30, 2020 and 2019, none of the advances to suppliers were written off against previous allowance for unrefundable advances, respectively.

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Inventory

3 Months Ended

Jun. 30, 2020

Inventory Disclosure [Abstract]

INVENTORY

Note 10 – INVENTORY

Inventory consisted of finished goods, valued at $11,141,411 and $12,247,004 as of June 30, 2020 and March 31, 2020, respectively. The Company constantly monitors its potential obsolete products and is allowed to return products close to their expiration dates to its suppliers. Any loss on damaged items is immaterial and will be recognized immediately. As a result, no reserves were made for inventory as of June 30, 2020 and March 31, 2020.

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Farmland Assets

3 Months Ended

Jun. 30, 2020

Farmland Assets [Abstract]

FARMLAND ASSETS

Note 11 – FARMLAND ASSETS

Farmland assets consist of ginkgo trees planted in 2012 and expected to be harvested and sold in several years. As of June 30, 2020 and March 31, 2020, farmland assets are valued as follows:

	June 30,			March 31,
	2020			2020
Farmland assets	$	2,191,944		$	2,177,606
Less: Impairment*		(1,439,687	)		(1,435,259	)
Farmland assets, net	$	752,257		$	742,347

* As of March 31, 2018, the book value of the Ginkgo trees planted in Qianhong Agriculture's farmland, including their cultivation cost and land lease amortization expense, was approximately $2,416,839. Based on an independent appraisal report, the value of the Ginkgo trees was approximately $796,286 as of March 31, 2018. As a result, the Company recorded an agricultural inventory impairment of $1,620,553 as of March 31, 2018. The difference between the recorded impairment loss and impairment balance in the above is primarily due to the exchange rate variance over years. There are no leasehold impairment expense in the three months ended June 30, 2020 and 2019.

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Long Term Refundable Deposits, Landlords

3 Months Ended

Jun. 30, 2020

Long Term Deposits, Landlords [Abstract]

LONG TERM REFUNDABLE DEPOSITS, LANDLORDS

Note 12 – LONG TERM REFUNDABLE DEPOSITS, LANDLORDS

As of June 30, 2020 and March 31, 2020, long term deposits amounted to $1,447,547 and $1,456,384, respectively. Long term deposits are money deposited with, or advanced to, landlords for the purpose of securing retail store leases that the Company does not anticipate being returned within the next twelve months. Most of the Company's landlords require a minimum payment of nine months' rent, paid up front, plus additional deposits.

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Other Noncurrent Assets

3 Months Ended

Jun. 30, 2020

Other Assets, Noncurrent Disclosure [Abstract]

OTHER NONCURRENT ASSETS

Note 13 – OTHER NONCURRENT ASSETS

Other noncurrent assets consisted of the following:

	June 30, 2020		March 31, 2020
Forest land use rights*	$	985,156	$	994,558
Others		64,028		52,205
Total	$	1,049,184	$	1,046,763

* The prepayment for lease of forest land use rights is a payment made to a local government in connection with entering into an operating land lease agreement. The land is currently used to cultivate Ginkgo trees. The forest rights certificate from the local village extends the life of the lease to January 31, 2060.

The amortization of the prepayment for the lease of forest land use right was approximately $12,441 and $6,885 for the three months ended June 30, 2020 and 2019, respectively.

The Company's amortizations of the prepayment for lease of land use right for the next five years and thereafter are as follows:

For the year ending June 30,	Amount
2021	$	26,515
2022		26,515
2023		26,515
2024		26,515
2025		26,515
Thereafter		852,581

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Leases

3 Months Ended

Jun. 30, 2020

Leases [Abstract]

LEASES

Note 14 – LEASES

The Company leases most of its retail stores and corporate offices under operating leases, typically with initial terms of 3 to 10 years. Usually within one to three months prior to the expiration date of a lease, the Company is required to notify the lessor and has a priority to continue renting the lease property if a lessor intends to lease property. The lease itself does not have restriction or covenants. If both parties agree to continue, a new lease contract with new lease terms has to been signed by both parties. Usually the rent may increase year by year based on the lease contract. Sublease is typically not allowed. Any damage, if made by the lessee, to the property and equipment within the property has to been fixed or reimbursed by the lessee. The Company does not have any leases entered into but which have not yet commenced. The net lease cost for the three months ended June 30, 2020 is $1,671,118. The Company does not have finance lease according to the definition of ASU 2016-02, Leases (Topic 842). Supplemental cash flow information related to leases for the three months ended June 30, 2020 is as follows:

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows paid for operating leases	$	1,671,118
Right-of-use assets obtained in exchange for lease obligations:
Operating leases		-

Supplemental balance sheet information related to leases as of June 30, 2020 is as follows:

Operating leases:
Operating lease right-of-use assets	$	19,351,247
Current portion of operating lease liabilities	$	466,213
Long-term operating lease liabilities		16,917,159
Total operating lease liabilities	$	17,383,372
Weighted average remaining lease term
Operating leases		3.2
Weighted average discount rate
Operating leases		4.19	%

The following table summarizes the maturity of lease liabilities under operating leases as of June 30, 2020:

	Operating
For the year ending June 30,	Leases
2021	$	485,355
2022		6,345,189
2023		4,510,762
2024		3,277,971
2025		1,995,568
Thereafter		2,575,035
Total lease payments		19,189,880
Less: imputed interest		(1,806,508	)
Total lease liabilities	$	17,383,372

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Intangible Assets

3 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

Note 15 – INTANGIBLE ASSETS

Net intangible assets consisted of the following at:

	June 30, 2020			March 31, 2020
License (1)	$	2,246,880		$	2,220,512
Software(2)		1,086,366			1,083,024
Land use rights (3)		1,379,337			1,375,095
Total intangible assets		4,712,583			4,678,631
Less: accumulated amortization		(735,234	)		(667,633	)
Less: impairment(4)		(618,942	)		(617,038	)
Intangible assets, net	$	3,358,407		$	3,393,960

Amortization expense of intangibles amounted to $65,389 and $58,466 for the three months ended June 30, 2020 and 2019, respectively.

(1)	This represents the fair value of the licenses of insurance applicable drugstores acquired from a variety of drugstores such as Sanhao Pharmacy and several local stores. The licenses allow patients to pay by using insurance cards at stores. The stores are reimbursed from the Human Resource and Social Security Department of Hangzhou City. In 2014, the Company acquired Sanhao Pharmacy, a drugstore chain. In September 2017, the Company acquired several new stores for the purpose of the Municipal Social Medical Reimbursement Qualification Certificates. On January 9, 2020, the Company acquired a local drugstore chain. The acquired drugstores ceased their stores' business and liquidate all of the stores' accounts after Jiuzhou Pharmacy acquired them. In March 2020, the drugstore chain has dissolved and its certificates were transferred to new stores opened at the same time.
(2)	These balances primarily include the SAP ERP system, the Internet Clinic Diagnosis Terminal system and the Chronic Disease Management system. In 2017, we have installed a leading ERP system, SAP from Germany. SAP is a well-known management system used by many fortune 500 companies. It is being amortized over three years since its installation. In 2020, we have installed an internet Clinic Diagnosis System used to strengthen our ability to perform online diagnosis which may increase more customer spending and a Chronic Disease Management System used to better manage and monitor our members' health. As of June 30, 2020, the SAP system has a net value of $135,698 (RMB 959,352), the internet Clinic Diagnosis System has a net value of approximately $380,313 (RMB 2,688,709), the Chronic Disease Management System has a net value of approximately $16,462 (RMB 116,379) .
(3)	In July 2013, the Company purchased the land use rights of a plot of land in Lin'an, Hangzhou, intended for the establishment of an herb processing plant in the future. However, as the Company's farming business in Lin'an has not grown, the Company does not expect completion of the plant in the near future.
(4)	In the year ended March 31, 2020, the company evaluated the licenses of insurance applicable drugstores acquired in the past based on the discounted positive cash value. Due to the stricter government insurance policy in fiscal year 2021, the value of these licenses has declined. As a result, the company recorded an impairment. There are no impairment expense in the three months ended June 30, 2020 and 2019.

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Notes Payable

3 Months Ended

Jun. 30, 2020

Notes Payable [Abstract]

NOTES PAYABLE

Note 16 – NOTES PAYABLE

The Company has credit facilities with Hangzhou United Bank ("HUB") that provided working capital in the form of the following bank acceptance notes at June 30, 2020 and March 31, 2020:

		Origination	Maturity	June 30,		March 31,
Beneficiary	Endorser	date	date	2020		2020
Jiuzhou Pharmacy(1)	HUB	10/09/19	04/09/20		-		3,478,259
Jiuzhou Pharmacy(1)	HUB	11/06/19	05/06/20		-		164,582
Jiuzhou Pharmacy(1)	HUB	12/05/19	06/05/20		-		3,106,474
Jiuzhou Pharmacy(1)	HUB	12/31/19	06/30/20		-		2,289,308
Jiuzhou Pharmacy(1)	HUB	01/06/20	07/06/20		129,856		129,457
Jiuzhou Pharmacy(1)	HUB	02/19/20	08/19/20		5,120,844		5,105,096
Jiuzhou Pharmacy(1)	HUB	03/10/20	09/10/20		5,341,297		5,324,871
Jiuxin Medicine(1)	HUB	12/26/19	06/26/20		-		1,371,992
Jiuxin Medicine(1)	HUB	12/31/19	06/30/20				3,943,776
Jiuxin Medicine(1)	HUB	03/31/20	09/30/20		1,697,376		1,692,156
Jiuzhou Pharmacy(1)	HUB	04/10/20	10/10/20		2,969,129
Jiuzhou Pharmacy(1)	HUB	04/29/20	10/29/20		546,874
Jiuzhou Pharmacy(1)	HUB	05/09/20	11/09/20		3,803,552		-
Jiuzhou Pharmacy(1)	HUB	06/24/20	12/24/20		1,405,995		-
Jiuzhou Pharmacy(1)	HUB	06/30/20	12/30/20		891,122		-
Jiuxin Medicine(1)	HUB	06/30/20	12/30/20		4,809,329		-
Total				$	26,715,374	$	26,605,971

(1) As of June 30, 2020, the Company had $26,715,374 (RMB 188,870,639) of notes payable from HUB. The Company is required to hold restricted cash in the amount of $14,913,825 (RMB 105,684,113) with HUB as collateral against these bank notes. Included in the restricted cash is a total of $8,770,422 three-year deposit (RMB 62,150,000) deposited into HUB as a collateral for current and future notes payable from HUB.  As of March 31, 2020, the Company had $26,605,971 (RMB 188,677,437) of notes payable from HUB. The Company is required to hold restricted cash in the amount of $14,596,179 (RMB 103,509,456) with HUB as collateral against these bank notes. Included in the restricted cash is a total of $8,763,958 three-year deposit (RMB 62,150,000) deposited into HUB as a collateral for current and future notes payable from HUB.

As of June 30, 2020, the Company had a credit line of approximately $12.55 million in the aggregate from HUB. By putting up a three-year deposit of $8.77 million and the additional short-term deposits of $6.14 million deposited in the banks, the total credit line was $27.46 million. As of June 30, 2020, the Company had approximately $26.72 million of bank notes payable and approximately $0.74 million bank credit line was still available for further borrowing. The bank notes are secured by three shops of Jiuzhou Pharmacy and guaranteed by the Company's major shareholders.

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Loan Payable

3 Months Ended

Jun. 30, 2020

Loan Payable [Abstract]

LOAN PAYABLE

Note 17 – LOAN PAYABLE

On August 2, 2019 and December 11, 2019, the Company borrowed $717,810 and $6,460,290 from Haihui Commercial, respectively. After deducting processing fee and deposits which are refundable at the end of loan period, the Company received $617,317 and $5,878,864 respectively. The Company is required to pledge accounts receivable of three drugstores to Haihui Commercial. As of June 30, 2020, the remaining loan balance is $5,851,778. The Company is scheduled to make monthly repayments, among which $2,300,271 is due within a year. The Company has an option to pay off the debts earlier than the repayment schedule upon approval from Haihui Commercial.

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Taxes

3 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

TAXES

Note 18 – TAXES

Income tax

Income tax expense includes a provision for federal, state and foreign taxes based on the annual estimated effective tax rate applicable to the Company and its subsidiaries, adjusted for items which are considered discrete to the period.

The effective tax rates on income before income taxes for the three months ended June 30, 2020 was (17.4)%. The (17.4) % rate adjustments for the three months ended June 30, 2020 represent expenses that primarily include stock option expenses and legal, accounting and other expenses incurred by the Company that are not deductible for PRC income tax. The effective tax rate is based on forecasted annual results and these amounts may fluctuate significantly through the rest of the year as a result of the unpredictable impact of COVID-19 on its operating activities.

The effective tax rate on income before income taxes for the three months ended June 30, 2019 was (0.4)%. The (0.4)% rate adjustments for the three months ended June 30, 2019 represent expenses that primarily include stock option expenses and legal, accounting and other expenses incurred by the Company that are not deductible for PRC income tax.

The Company has recorded $0 unrecognized benefit as of June 30, 2020. On the information currently available, the Company does not anticipate a significant increase or decrease to its unrecognized benefit within the next 12 months.

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Postretirement Benefits

3 Months Ended

Jun. 30, 2020

Retirement Benefits [Abstract]

POSTRETIREMENT BENEFITS

Note 19 – 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 $204,538 and $341,024 in employment benefits and pension for the three months ended June 30, 2020 and 2019, respectively.

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Related Party Transactions and Arrangements

3 Months Ended

Jun. 30, 2020

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS AND ARRANGEMENTS

Note 20 – RELATED PARTY TRANSACTIONS AND ARRANGEMENTS

Amounts payable to related parties are summarized as follows:

	June 30, 2020		March 31, 2020
Due to a director and CEO (1) :		491,300		490,218

(1) Due to foreign exchange restrictions, the Company's director and CEO, Mr. Lei Liu personally lent U.S. dollars to the Company to facilitate its payments of expenses in the United States.

The Company leases from Mr. Lei Liu a retail space; the lease expires in September 2020. Rent expenses totaled $6,532 and $6,785 for the three months ended June 30, 2020 and 2019, respectively. The amounts owed under the lease for the three months ended June 30, 2020 and 2019 were not paid to Mr. Liu as of June 30, 2020.

On April 28, 2018, 10% of Jiuxin Medicine was sold to Hangzhou Kangzhou Biotech Co. Ltd. for a total proceeds of approximately $75,643 (RMB507,760). Mr. Lei Liu owns 51% of Hangzhou Kangzhou Biotech Co. Ltd.

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Warrants

3 Months Ended

Jun. 30, 2020

Warrants [Abstract]

WARRANTS

Note 21 – WARRANTS

In connection with the registered direct offering closed on July 19, 2015, the Company issued to an investor a warrant to purchase up to 600,000 shares of common stock at an exercise price of $3.10 per share. The warrant became exercisable on January 19, 2016 and will expire on January 18, 2021. In connection with the offering, the Company also issued a warrant to its placement agent of this offering, pursuant to which the agent may purchase up to 6% of the aggregate number of shares of common stock sold in the offering, i.e. 72,000 shares. Such warrant has the same terms as the warrant issued to investor in the offering.

On June 1, 2020, the investor exercised 25,000 warrants at the price of $3.10 per share in cash. As of June 30, 2020, 647,000 warrants had not been exercised. The fair value of the warrants issued to purchase 647,000 and 672,000 shares as of June 30, 2020 and March 31, 2020, as described above was estimated by using the binominal pricing model with the following assumptions:

	Common Stock Warrants			Common Stock Warrants
	June 30, 2020			March 31, 2020
Stock price	$	1.44		$	1.77
Exercise price	$	3.10		$	3.10
Annual dividend yield		-	%		-	%
Expected term (years)		0.56			0.81
Risk-free interest rate		0.18	%		0.71	%
Expected volatility		98.86	%		62.08	%

Upon evaluation, the warrants meet the definition of a derivative under FASB ASC 815, as the Company cannot avoid a net cash settlement under certain circumstances. Accordingly, the fair value of the warrants was classified as a liability of $64,090 as of March 31, 2020. For the three months ended June 30, 2020 and June 30, 2019, the Company recognized a loss of $4,890 and a gain of $403,555 for the investor warrant and placement agent warrant, from the change in fair value of the warrant liability. As a result, the warrant liability is carried on the consolidated balance sheets at the fair value of $68,980 for the investor warrant and placement agent warrant, collectively, as of June 30, 2020.

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Employee Deposits

3 Months Ended

Jun. 30, 2020

Financial Liability [Abstract]

Employee Deposits

Note 22 – EMPLOYEE DEPOSITS

To encourage operating team, which consists of doctors and nurses, to devote their efforts to run clinics, Linjia Medical allows them to put deposits in the clinic where doctors and nurses work, and take shares in any profit of the clinic. The principal amounts of these deposits are refundable in the event the doctors and nurses leave the clinic. In order to properly reflect Linjia Medical's liabilities, the Company reclassified the deposit of $14,145 (RMB100,000) and $70,507 (RMB500,000) as financial liability as of June 30, 2020 and March 31, 2020.

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Stockholder's Equity

3 Months Ended

Jun. 30, 2020

Stockholders' Equity Note [Abstract]

STOCKHOLDER'S EQUITY

Note 23 – STOCKHOLDER'S EQUITY

Common stock

On April 15, 2019, the Company closed a registered direct offering of 4,000,008 shares of common stock at $2.50 per share with gross proceeds of $10,000,020 from our effective shelf registration statement.

On June 1, 2020, an investor exercised 25,000 warrants at the price of $3.10 per share in cash. The Company issued 25,000 shares of common stocks.

On June 3, 2020, the Company closed a registered direct offering of 5,000,004 shares of common stock at $2.00 per share with gross proceeds of $10,000,008 from its effective shelf registration statement.

Stock warrants

Concurrent with the registered direct offering of common stock that closed on April 15, 2019, the Company issued to several investors in a private placement warrants to purchase up to 3,000,006 shares of common stock. In connection with the offering, the Company also issued a warrant to its placement agent of this offering, pursuant to which the agent may purchase up to 6% of the aggregate number of shares of common stock sold in the offering, i.e. 240,000 shares at an exercise price of $3.125 per share. The warrant became exercisable on October 11, 2019 and will expire on April 11, 2024.

Concurrent with the registered direct offering of common stock that closed on June 3, 2020, the Company issued to several investors in a private placement warrants to purchase up to 3,750,003 shares of common stock. In connection with the offering, the Company also issued a warrant to its placement agent of this offering, pursuant to which the agent may purchase up to 6.5% of the aggregate number of shares of common stock sold in the offering, i.e. 300,000 shares at an exercise price of $2.57 per share. The warrant becomes exercisable on December 2, 2020 and will expire on June 2, 2025.

Upon evaluation, both the warrants issued in April 2019 and June 2020 meet the definition of an equity transaction under FASBASC 815. Accordingly, the fair value of the warrants is recorded as a part of additional paid-in capital.

Stock-based compensation

The Company accounts for share-based payment awards granted to employees and directors by recording compensation expense based on estimated fair values. The Company estimates the fair value of share-based payment awards on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company's consolidated statements of operations. Share-based awards are attributed to expenses using the straight-line method over the vesting period. The Company determines the value of each option award that contains a market condition using a Monte Carlo Simulation valuation model, while all other option awards are valued using the Black-Scholes valuation model as permitted under FASB ASC 718 "Compensation - Stock Compensation." The assumptions used in calculating the fair value of share-based payment awards represent the Company's best estimates. The Company's estimates of the fair values of stock options granted and the resulting amounts of share-based compensation recognized may be impacted by certain variables including stock price volatility, employee stock option exercise behaviors, additional stock option modifications, estimates of forfeitures, and the related income tax impact.

Stock option

On November 18, 2014, the Company granted a total of 967,000 shares of stock options under the Plan to a group of a total of 46 grantees including directors, officers and employees. The exercise price of the stock option is $2.50. The option vests on November 18, 2017, provided that the grantees are still employed by the Company on such a date. The options will be exercisable for five years from the vesting date, or November 18, 2017 until November 17, 2022. For the three months ended June 30, 2020 and 2019, none was recorded as compensation expense. As of June 30, 2020, all compensation costs related to stock option compensation arrangements granted have been recognized.

Statutory reserves

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 dividends 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, 2020 and 2019, the Company did not make appropriations to statutory reserves.

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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Loss Per Share

3 Months Ended

Jun. 30, 2020

Loss Per Share [Abstract]

LOSS PER SHARE

Note 24 – LOSS 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 (loss) earnings per share computation:

	The three months ended June 30,
	2020			2019
Net loss attributable to controlling interest	$	(231,509	)	$	(2,134,951	)
Weighted average shares used in basic computation		34,428,271			32,453,269
Diluted effect of stock options and warrants		-			-
Weighted average shares used in diluted computation		34,428,271			32,453,269
Loss per share – Basic:		-			-
Net loss attributable to controlling interest	$	(0.01	)	$	(0.07	)
Loss per share – Diluted:
Net loss attributable to controlling interest	$	(0.01	)	$	(0.07	)

For the three months ended June 30, 2020, 967,000 shares underlying employee stock options and 575,000 shares underlying outstanding purchase options to an investor, and 72,000 shares underlying outstanding purchase option to an investment placement agent were excluded from the calculation of diluted loss per share as the options were anti-dilutive.

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Segments

3 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

SEGMENTS

Note 25 – SEGMENTS

The Company operates within four main reportable segments: retail drugstores, online pharmacy, drug wholesale and herb farming. The retail drugstores segment sells prescription and over-the-counter ("OTC") medicines, TCM, dietary supplements, medical devices, and sundry items to retail customers. The online pharmacy sells OTC drugs, dietary supplements, medical devices and sundry items to customers through several third-party platforms such as Alibaba's Tmall, JD.com and Amazon.com, and the Company's own platform all over China. The drug wholesale segment includes supplying the Company's own retail drugstores with prescription and OTC medicines, TCM, dietary supplement, medical devices and sundry items (which sales have been eliminated as intercompany transactions), and also selling them to other drug vendors and hospitals. The Company's herb farming segment cultivates selected herbs for sales to other drug vendors. The Company is also involved in online sales and clinic services that do not meet the quantitative thresholds for reportable segments and are included in the retail drugstores 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 operations and markets to distinct classes of customers.

The following table presents summarized information by segment of the continuing operations for the three months ended June 30, 2020.

	Retail drugstores		Online Pharmacy			Drug wholesale			Herb farming		Total
Revenue	$	18,810,474	$	4,912,834			7,331,004			-		31,054,312
Cost of goods		12,402,182		4,228,411			6,443,500			-		23,074,093
Gross profit	$	6,408,292	$	684,423			887,504			-		7,980,219
Selling expenses		4,977,047		704,876			590,484			-		6,272,407
General and administrative expenses		1,128,083		59,011			933,072			-		2,120,166
Loss from operations	$	303,162	$	(79,464	)		(636,052	)		-		(412,354	)
Depreciation and amortization	$	750,498	$	-			10,042			-		760,540
Total capital expenditures	$	169,807	$	-						-		169,807

The following table presents summarized information by segment of the continuing operations for the three months ended June 30, 2019.

	Retail drugstores			Online Pharmacy			Drug wholesale			Herb farming		Total
Revenue	$	16,734,988		$	2,443,605			6,102,191			-		25,280,784
Cost of goods		11,682,721			2,096,850			5,439,775			-		19,219,346
Gross profit	$	5,052,267		$	346,755			662,416			-		6,061,438
Selling expenses		4,835,666			473,380			659,505			-		5,968,551
General and administrative expenses		1,733,704			55,123			1,062,785			-		2,851,612
Loss from operations	$	(1,517,103	)	$	(181,748	)		(1,059,874	)		-		(2,758,725	)
Depreciation and amortization	$	504,463		$	-			8,486			-		512,949
Total capital expenditures	$	753,173		$	-						-		753,173

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 drugstores by main product category for the three months ended June 30, 2020 and 2019 were as follows:

	For the three months ended
	June 30,
	2020		2019
Prescription drugs	$	7,406,774	$	5,695,286
OTC drugs		6,818,484		7,240,228
Nutritional supplements		1,347,769		1,231,133
TCM		949,012		1,104,050
Sundry products		422,551		298,198
Medical devices		1,865,884		1,166,093
Total	$	18,810,474	$	16,734,988

The Company's net revenue from external customers through online pharmacy by main product category is as follows:

	For the three months ended
	June 30,
	2020		2019
Prescription drugs	$	1,869,643	$	-
OTC drugs		1,322,811		1,024,602
Nutritional supplements		221,031		107,194
TCM		23,199		13,681
Sundry products		546,720		438,736
Medical devices		929,430		859,392
Total	$	4,912,834	$	2,443,605

The Company's net revenue from external customers through wholesale by main product category is as follows:

	For the three months ended
	June 30,
	2020		2019
Prescription drugs	$	5,966,148	$	4,880,491
OTC drugs		915,146		1,074,261
Nutritional supplements		59,841		21,691
TCM		28,967		98,828
Sundry products		2,597		5,682
Medical devices		358,305		21,238
Total	$	7,331,004	$	6,102,191

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Subsequent Events

3 Months Ended

Jun. 30, 2020

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

Note 26 – Subsequent Events

Management of the Company has evaluated subsequent events through the date of the report, and there was no material subsequent event requiring adjustments to the financial statements or disclosure.  

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Basis of presentation and consolidation

Basis of presentation and consolidation

The accompanying condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The consolidated financial statements include the financial statements of the Company, its wholly-owned 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.

Control and common control are 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 in the voting rights 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.

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 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. 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 suppliers.

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 consolidated financial statements in conformity with US GAAP 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 consolidated financial statements relate to the assessment of the carrying values of accounts receivable, advances to suppliers and related allowance for doubtful accounts, useful lives of property and equipment, inventory reserve and fair value of its purchase option derivative liability. Because of the use of estimates inherent in the financial reporting process, actual results could materially differ from those estimates.

Fair value measurements

Fair value measurements

The Company establishes a three-level valuation hierarchy of valuation techniques based on observable and unobservable inputs, which may be used to measure fair value and include the following:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement.

The Company’s financial assets and liabilities, which include financial instruments as defined by FASB ASC 820, include cash and cash equivalents, restricted cash, financial assets available for sales, accounts receivable, notes receivables, other receivable, accounts payable, notes payable, other payable, long-term debt and derivatives. The carrying amounts of cash and cash equivalents, restricted cash, accounts receivable, notes receivables, and accounts payable are a reasonable approximation of fair value due to the short maturities of these instruments (Level 1). The carrying amount of notes payable approximates fair value based on borrowing rates of similar bank loan currently available to the Company (Level 2) (See Note 16). The carrying amount of Long-term loan payable approximates fair value based on borrowing rates of similar bank loan currently available to the Company (Level 2) (See Note 17).The carrying amount of the Company’s derivative instruments is recorded at fair value and is determined based on observable inputs that are corroborated by market data (Level 2) (See Note 21). The carrying amount of the financial assets available for sale is recorded at fair value and is determined based on unobservable inputs (Level 3) (See Note 4). The carrying amount of the employee deposits is recorded at fair value and is determined based on unobservable inputs (Level 3) (See Note 22).

	Active Market for Identical Assets (Level 1)		Observable Inputs (Level 2)		Unobservable Inputs (Level 3)		Total Carrying Value
Cash, cash equivalents and restricted cash	$	33,572,328		-		-		33,572,328
Financial assets available for sale		-		-		157,644		157,644
Account receivable		8,984,595		-		-		8,984,595
Notes receivable		28,290		-		-		28,290
Other receivable		5,599,565		-		-		5,599,565
Accounts payable		16,107,594		-		-		16,107,594
Notes payable		-		26,715,374		-		26,715,374
Other payable		2,176,992		-		-		2,176,992
Long-term loan payable		-		5,851,778		-		5,851,778
Employee Deposits		-		-		14,145		14,145
Warrants liability		-		68,980		-		68,980
Total	$	66,469,364		32,636,132		171,789		99,277,285

Revenue recognition

Revenue recognition

Effective March 31, 2018, the Company began recognizing revenue under Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC 606"), using the modified retrospective transition method. The impact of adopting the new revenue standard was not material to the Company's consolidated financial statements. The core principle of this new revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

● Step 1: Identify the contract with the customer

● Step 2: Identify the performance obligations in the contract

● Step 3: Determine the transaction price

● Step 4: Allocate the transaction price to the performance obligations in the contract

● Step 5: Recognize revenue when the company satisfies a performance obligation

In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606's definition of a "distinct" good or service (or bundle of goods or services) if both of the following criteria are met:

● The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct).

● The entity's promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).

If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct.

The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, some sales taxes). The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate.

The Company's revenue is net of value added tax ("VAT") collected on behalf of the PRC tax authorities with 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.

Certain contract liabilities primarily represent the Company's obligation to transfer additional goods or services to a customer for which the Company has received consideration, for example, membership points. The consideration received remains a contract liability until goods or services have been provided to the retail customer. The estimated amount based on accrued membership points was deducted from sales revenue.

The following is a discussion of the Company's revenue recognition policies by segment under the new revenue recognition accounting standard:

Pharmacy retail sales

The physical pharmacies sell prescription drugs, over-the-counter ("OTC") drugs, traditional Chinese medicine, nutritional supplements, medical devices and sundry products. Revenue from sales of prescription medicine at 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 drugstores is recognized at the point of sale, which is when a customer pays for and receives the merchandise. Usually the majority merchandise, such as prescription and OTC drugs, are not refundable after the customers leave the counter. Returns of other products, such as sundry products, are minimal. Sales of drugs reimbursed by the local government medical insurance agency and receivables from the agency are recognized when a customer pays for the drugs at a store. The Company based on historical experience, a reserve for potential losses from denial of reimbursement on certain unqualified drugs is made to the receivables from the government agency. Additionally, several onsite clinics adjacent to pharmacies provide limited medical services. Revenue from medical services is recognized after the service has been rendered to a customer. As revenue from medical services is minimal compared to pharmacy retail sales, it is included as part of the pharmacy retail sales.

The Company deduct the membership rewards directly from the retail revenue, and present such amounts in net sales as opposed to the current reduction of operation expense classification. Membership rewards, usually membership points, are accumulated by customers based on their historical spending levels. The Company has determined that there is an additional performance obligation to those customers at the time of the initial transaction. The customers can then redeem these points against the prices of merchandises they purchase in the future. At the end of each period, unredeemed membership rewards are reflected as a contract liability.

Online pharmacy sales

The online pharmacy segment sells various health products except for prescription drugs. Revenue from online pharmacy sales is recognized when merchandise is shipped to customers. While most deliveries take one day, certain deliveries may take longer depending on a customer's location. Any loss caused in a shipment will be reimbursed by the Company's courier company. The Company's sales policy allows for the return of certain merchandises without reason within seven days after a customer's receipt of the applicable merchandise. Historically, sales returns seven days after merchandise receipts have been minimal.

Wholesale

Jiuxin Medicine purchases medicine in quantity and distributes products primarily to local pharmacies and medical products dealers. Revenue from sales of merchandise to non-retail customers is recognized when the merchandise is transferred to customers. Historically, sales returns have been minimal.

Disaggregation of Revenue

The following table disaggregates the Company's revenue by major source in each segment for the three months ended June 30, 2020 and 2019:

For the three  months ended June 30	2020		2019
Retail drugstores
Prescription drugs	$	7,406,774	$	5,695,286
OTC drugs		6,818,484		7,240,228
Nutritional supplements		1,347,769		1,231,133
TCM		949,012		1,104,050
Sundry products		422,551		298,198
Medical devices		1,865,884		1,166,093
Total retail revenue	$	18,810,474	$	16,734,988
Online pharmacy
Prescription drugs	$	1,869,643	$	-
OTC drugs		1,322,811		1,024,602
Nutritional supplements		221,031		107,194
TCM		23,199		13,681
Sundry products		546,720		438,736
Medical devices		929,430		859,392
Total online revenue	$	4,912,834	$	2,443,605
Drug wholesale
Prescription drugs	$	5,966,148	$	4,880,491
OTC drugs		915,146		1,074,261
Nutritional supplements		59,841		21,691
TCM		28,967		98,828
Sundry products		2,597		5,682
Medical devices		358,305		21,238
Total wholesale revenue	$	7,331,004	$	6,102,191
Total revenue	$	31,054,312	$	25,280,784

Contract Balances

Contract liabilities primarily represent the Company's obligation to transfer additional goods or services to a customer for which the Company has received consideration, for example membership points and membership rewards. The consideration received remains a contract liability until goods or services have been provided to the retail customer.

The following table provides information about receivables and contract liabilities from contracts with customers:

	June 30, 2020		March 31, 2020
Trade receivable(included in accounts receivable, net)	$	8,984,595	$	9,770,656
Contract liabilities (included in accrued expenses)		1,112,508		1,106,982

Restricted cash

Restricted cash

The Company's restricted cash consists of cash and long-term deposits 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.

The following represents a reconciliation of cash and cash equivalents in the Consolidated Condensed Balance Sheets to total cash, cash equivalents and restricted cash in the Consolidated Condensed Statements of Cash Flows as of June 30, 2020 and March 31, 2020:

	June 30, 2020		March 31, 2020
Cash and cash equivalents	$	18,477,212	$	16,176,318
Restricted cash		15,095,116		14,806,288
Cash, cash equivalents and restricted cash	$	33,572,328	$	30,982,606

Accounts receivable

Accounts receivable

Accounts receivable represents the following: (1) amounts due from banks relating to retail sales that are paid or settled by the customers' debit or credit cards, (2) amounts due from government social security bureaus and commercial health insurance programs relating to retail sales of drugs, prescription medicine, and medical services that are paid or settled by the customers' medical insurance cards, (3) amounts due from non-bank third party payment instruments such as Alipay and certain e-commerce platforms and (4) 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 necessary. In the Company's retail business, accounts receivable mainly consist of reimbursements due from the government insurance bureaus and commercial health insurance programs and are usually collected within two or three months. The Company directly writes off delinquent account balances, which it determines to be uncollectible after confirming with the appropriate bureau or program each month. Additionally, the Company also makes estimated reserves on related outstanding accounts receivable based on historical trends.

In the Company's online pharmacy business, accounts receivable primarily consist of amounts due from non-bank third party payment instruments such as Alipay and certain e-commerce platforms. To purchase pharmaceutical products from an e-commerce platforms such as Tmall, customers are required to submit payment to certain non-bank third party payment instruments, such as Alipay, which, in turn, reimburse the Company within seven days to a month. Except for customer returns of sold products, the receivables from these payments instruments are rarely uncollectible.

In its wholesale business, the Company uses the aging method to estimate the allowance for anticipated uncollectible receivable balances. Under the aging method, bad debt percentages are determined by management, based on historical experience and the 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.

Advances to suppliers

Advances to suppliers

Advances to suppliers consist of prepayments to its vendors, such as pharmaceutical manufacturers and other distributors. Since the acquisition of Jiuxin Medicine, the Company have transferred almost all logistics services of its retail drugstores to Jiuxin Medicine. Jiuzhou Pharmacy only directly purchases certain non-medical products, such as certain nutritional supplements. As a result, almost all advances to suppliers are made by Jiuxin Medicine.

Advances to suppliers for its drug wholesale business consist of prepayments to its vendors, such as pharmaceutical manufacturers and other distributors. The Company typically receive products from vendors within three to nine months after making prepayments. The Company continuously monitor delivery from, and payments to, its vendors while maintaining a provision for estimated credit losses based upon historical experience and any specific supplier issues, such as discontinuing of inventory supply, that have been identified.

Inventories

Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first in first out (FIFO) method. The Company carries out physical inventory counts on a monthly basis at each store and warehouse location. Herbs that the Company farms are recorded at their cost, which includes direct costs such as seed selection, fertilizer, labor costs that are spent in growing herbs on the leased farmland, and indirect costs such as amortization of farmland development cost. All costs are accumulated until the time of harvest and then allocated to harvested herbs costs when the herbs are sold. The Company periodically reviews its inventory and records write-downs to inventories for shrinkage losses and damaged merchandise that are identified. The Company provides a reserve for estimated inventory obsolescence or excess quantities on hand equal to the difference, if any, between the cost of the inventory and its estimated realizable value.

Farmland assets

Farmland assets

Herbs that the Company farms are recorded at their cost, which includes direct costs such as seed selection, fertilizer, and labor costs that are spent in growing herbs on the leased farmland, and indirect costs such as amortization of farmland development costs. Since April 2014, amortization of farmland development costs has been expensed instead of allocated into inventory due to unpredictable future market value of planted gingko trees.

All related costs described in the above are accumulated until the time of harvest and then allocated to harvested herbs when they are sold.

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	3-5 years
Office equipment & furniture	3-5 years
Buildings	35 years

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

Intangible assets

Intangible assets

Intangible assets are acquired individually or as part of a group of assets, and 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
Land use rights	50 years
Software	3 years
License	Infinite

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

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 fixed assets and farmland assets impaired for the three months ended June 30, 2020 and 2019.

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 payable. 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 accounts for income taxes following the liability method pursuant to FASB ASC 740 "Income Taxes". Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rate is recognized in income in the period that includes the enactment date.

The Company also follows FASB ASC 740, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance on recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. As of June 30, 2020 and March 31, 2020, the Company did not have a liability for unrecognized tax benefits. It is the Company's policy to include penalties and interest expense related to income taxes as a component of other expense and interest expense, respectively, as necessary. The Company's historical tax years will remain open for examination by the local authorities until the statute of limitations has passed.

Under ASC 740-270, entities calculate the income tax provision for an interim period by distinguishing between elements recognized in the income tax provision through (1) applying an estimated annual effective tax rate (ETR) to a measure of year-to-date operating results referred to as "ordinary income (or loss)," and (2) discretely recognizing specific events (referred to as "discrete items") as they occur. Entities should revise the ETR, as necessary, as of the end of each successive interim period during its fiscal year based on changes to any of these estimates and judgments.

The ETR expected to apply for the full fiscal year is applied to year-to-date ordinary income (or loss) at the end of each interim period to compute the year-to-date income tax (or benefit) applicable to ordinary income or loss. Income tax expense (or benefit) related to each discrete item is individually determined and recognized in the interim period when the discrete item occurs. As a result, the income tax provision (or benefit) for an interim period might include elements that apply to ordinary income or loss, as well as elements related to discrete items. Discrete items include significant items that are unusual or that occur infrequently. Determining which items are unusual or infrequent often requires a significant degree of judgment.

Under ASC 740-270-30-36, entities subject to income taxes in multiple jurisdictions should apply one overall ETR instead of separate ETRs for each jurisdiction when calculating the interim-period income tax or benefit related to consolidated ordinary income (or loss) for the year-to-date interim period, except in certain circumstances. The income tax provision or benefit for each interim period is the difference between the year-to-date amount for the current period and the year-to-date amount for the prior period.

Value added tax

Value added tax

Sales revenue represents the invoiced value of goods, net of VAT. All of the Company's products are sold in the PRC and are subject to a VAT on the gross sales price. The VAT rates range up to 17%, depending on the type of products sold. The VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing or acquiring its finished products. The Company recorded a VAT payable net of payments in the accompanying financial statements.

Stock based compensation

Stock based compensation

The Company follows the provisions of FASB ASC 718, "Compensation — Stock Compensation," which establishes accounting standards for non-employee and employee stock-based awards. Under the provisions of FASB ASC 718, the fair value of stock issued is used to measure the fair value of services received as the Company believes such approach is a more reliable method of measuring the fair value of the services. For non-employee stock-based awards, fair value is measured based on the value of the Company's common stock on the date that the commitment for performance by the counterparty has been reached or the counterparty's performance is complete. The fair value of the equity instrument is calculated and then recognized as compensation expense over the requisite performance period. For employee stock-based awards, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense with graded vesting on a straight–line basis over the requisite service period for the entire award.

Advertising and promotion costs

Advertising and promotion costs

Advertising and promotion costs are expensed as incurred and amounted to $77,068 and $80,049 for the three months ended June 30, 2020 and 2019, respectively. Such costs consist primarily of print and promotional materials such as flyers to local communities.

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, 2020 and at March 31, 2020 were translated at 1 RMB to 0.1414 USD and at 1 RMB to 0.1410 USD, respectively. The average translation rates applied to income and cash flow statement amounts for the three months ended June 30, 2020 and 2019 were at 1 RMB to 0.1411 USD and at 1 RMB to 0.1466 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. Since March 31, 2015, balances at financial institutions and state-owned banks within the PRC are covered by insurance up to RMB 500,000 (USD 72,800) per bank. As of June 30, 2020 and March 31, 2020, the Company had deposits totaling $24,279,528 and $30,974,714 that were covered by such limited insurance, respectively. Any balance over RMB 500,000 (USD 72,800) per bank in PRC will not be covered. To date, the Company has not experienced any losses in such accounts.

For the three months ended June 30, 2020, two vendors accounted for 35.0% of the Company's total purchases and two vendors accounted for more than 10% of total advances to suppliers. For the three months ended June 30, 2019, two vendors accounted for 49.2% of the Company's total purchases and two vendors accounted for more than 10% of total advances to suppliers.

For the three months ended June 30, 2020, no customer accounted for more than 10% of the Company's total sales and more than 10% of total accounts receivable. For the three months ended June 30, 2019, no customer accounted for more than 10% of the Company's total sales or more than 10% of total accounts receivable.

Leases

Leases

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). Lessees are required to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). The liability is equal to the present value of lease payments. The asset is based on the liability, subject to certain adjustments, such as for initial direct costs. For income statement purposes, a dual model was retained, requiring leases to be classified as either operating or finance leases. Operating leases result in straight-line expense (similar to operating leases under the prior accounting standard) while finance leases result in a front-loaded expense pattern (similar to capital leases under the prior accounting standard). Lessor accounting is similar to the prior model, but updated to align with certain changes to the lessee model (e.g., certain definitions, such as initial direct costs, have been updated) and the new revenue standard, ASU 2014-9.

The Company adopted this new accounting standard on April 1, 2019 on a modified retrospective basis and applied the new standard to all leases through a cumulative-effect adjustment to beginning retained earnings. As a result, comparative financial information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which includes, among other things, the ability to carry forward the existing lease classification. On April 1, 2019, the Company recorded an after-tax transition adjustment to increase retained earnings by approximately $422,354. The new standard had a material impact on the unaudited condensed consolidated balance sheet, but did not materially impact the Company's consolidated operating results and had no impact on the Company's cash flows. The following is a discussion of the Company's lease policy under the new lease accounting standard:

The Company determines if an arrangement contains a lease at the inception of a contract. Right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of the remaining future minimum lease payments. As the interest rate implicit in the Company's leases is not readily determinable, the Company utilizes its incremental borrowing rate, determined by class of underlying asset, to discount the lease payments. The operating lease right-of-use assets also include lease payments made before commencement and exclude lease incentives.

The Company leases premises for retail drugstores, and offices under non-cancellable operating leases. Operating lease payments are expensed over the term of lease using straight line method. A majority of the Company's retail drugstore leases have a 3 to 10 year term. Usually within one to three months prior to the expiration date of a lease, the Company is required to notify the lessor and has a priority to continue renting the lease property if a lessor intends to lease property. The lease itself does not have restriction or covenants. If both parties agree to continue, a new lease contract with new lease terms has to been signed by both parties. Usually the rent may increase year by year based on the lease contract. Sublease is typically not allowed. Any damage, if made by the lessee, to the property and equipment within the property has to been fixed or reimbursed by the lessee. The Company does not have any leases entered into but which have not yet commenced. The Company has historically been able to renew a majority of its drugstores leases. The weighted average remaining lease term is 3.2 years and the weighted average discount rate is 4.19%. Under the terms of the lease agreements, the Company has no legal or contractual asset retirement obligations at the end of the leases. See Note 14 "Leases" for additional information.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Accounting pronouncements adopted

In June 2016, the FASB issued ASU 2016-13, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," providing financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. For public business entities that are U.S. Securities and Exchange Commission (SEC) filers, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The FASB has voted to defer the effective date for public companies that are smaller reporting companies to fiscal years beginning after December 15, 2022. All entities may adopt the amendments in this Update earlier as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the impact of the adoption of ASU 2016-13 on our consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13 Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement, which eliminates, adds, and modifies certain disclosure requirements for fair value measurements under ASC 820. This ASU is to be applied on a prospective basis for certain modified or new disclosure requirements, and all other amendments in the standard are to be applied on a retrospective basis. The new standard is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted. ASU 2018-13 has no impact on its consolidated financial statements.

 In January 2017, the FASB issued ASU No. 2017-04, "Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" ("ASU 2017-04"), which removes Step 2 from the goodwill impairment test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. Public business entity that is a U.S. Securities and Exchange Commission filer should adopt the amendments in this ASU for its annual or any interim goodwill impairment test in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted ASU 2017-04 on January 1, 2020. The adoption of the ASU 2017-04 did not have a material impact on the Company's consolidated financial statements.

Accounting pronouncements not yet effective to adopt

In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes" (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). ASU 2019-12 will simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company does not expect that the requirements of ASU 2019-12 will have a material impact on its consolidated financial statements.

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Description of Business and Organization (Tables)

3 Months Ended

Jun. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of consolidated financial statements activities

Entity Name	Background	Ownership
Renovation	●     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 $14.5 million 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 million fully paid   ●     Carries out herb farming business	100%
Jiuzhou Pharmacy (1)	●     Established in the PRC on September 9, 2003 ●     Registered capital of RMB 5 million fully paid   ●     Operates the "Jiuzhou Grand Pharmacy" stores in Hangzhou	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)
Jiuxin Medicine	●     Established in PRC on December 31, 2003 ●     Acquired by Jiuzhou Pharmacy in August 2011 ●     10% of shares sold On April 20, 2018  ●     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)
Jiutong Medical	●     Established in the PRC on December 20, 2011 by Renovation ●     Registered capital of $2.6 million fully paid   ●     Currently has no operation	100%

Entity Name	Background	Ownership
Shouantang Bio	●     Established in the PRC in October, 2014 by Shouantang Technology  ●     100% held by Shouantang Technology  ●     Registered capital of RMB 1,000,000 fully paid ●     Sells nutritional supplements under its own brand name	100%
Jiuyi Technology	●     Established in the PRC on September 10, 2015 ●     100% held by Renovation  ●     Technical support to online pharmacy	100%
Kahamadi Bio	●     Established in the PRC in May 2016 ●     49% held by Shouantang Bio ●     Registered capital of RMB 10 million ●     Develop brand name for nutritional supplements	49%
Lin'An Jiuzhou	●     Established in the PRC in March 31, 2017 ●     100% held by Jiuxin Management ●     Registered capital of RMB 5 million ●     Explore retail pharmacy market in Lin'An City	100%
Linjia Medical	●     Established in the PRC in September27, 2017 ●     51% held by Jiuzhou Pharmacy ●     Registered capital of RMB 20 million ●     Operates local clinics	VIE by contractual arrangements as a controlled subsidiary of Jiuzhou Pharmacy (2)
Ayi Health	●     Established in the PRC in March 29, 2019 ●     51% held by Jiuzhou Pharmacy ●     Registered capital of RMB 10 million ●     Provide technical Support for medial service	VIE by contractual arrangements as a controlled subsidiary of Jiuzhou Pharmacy (2)

(1)

Jiuzhou Pharmacy, Jiuzhou Clinic and Jiuzhou Service had been under the common control of Mr. Lei Liu   and Ms. Li Qi, the three shareholders (the "Owners") since their respective establishment dates, pursuant to agreements among the Owners to vote their interests in concert as memorialized in a voting rights agreement. Based on such voting agreement, the Company has determined that common control exists among these three companies. The Owners have operated these three companies in conjunction with one another since each company's respective establishment date. Jiuxin Medicine is also deemed under the common control of the Owners as 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: a consulting services agreement, operating agreement, equity pledge agreement, voting rights agreement and option agreement. Because such agreements 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 each of the three companies (as well as 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 under the control of Jiuzhou Pharmacy, Jiuxin Medicine and Shouantang Bio are consolidated into the financial statements of the Company.

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Schedule of fair values of derivative instruments

	Active Market for Identical Assets (Level 1)		Observable Inputs (Level 2)		Unobservable Inputs (Level 3)		Total Carrying Value
Cash, cash equivalents and restricted cash	$	33,572,328		-		-		33,572,328
Financial assets available for sale		-		-		157,644		157,644
Account receivable		8,984,595		-		-		8,984,595
Notes receivable		28,290		-		-		28,290
Other receivable		5,599,565		-		-		5,599,565
Accounts payable		16,107,594		-		-		16,107,594
Notes payable		-		26,715,374		-		26,715,374
Other payable		2,176,992		-		-		2,176,992
Long-term loan payable		-		5,851,778		-		5,851,778
Employee Deposits		-		-		14,145		14,145
Warrants liability		-		68,980		-		68,980
Total	$	66,469,364		32,636,132		171,789		99,277,285

Schedule of revenue by major source in each segment

For the three  months ended June 30	2020		2019
Retail drugstores
Prescription drugs	$	7,406,774	$	5,695,286
OTC drugs		6,818,484		7,240,228
Nutritional supplements		1,347,769		1,231,133
TCM		949,012		1,104,050
Sundry products		422,551		298,198
Medical devices		1,865,884		1,166,093
Total retail revenue	$	18,810,474	$	16,734,988
Online pharmacy
Prescription drugs	$	1,869,643	$	-
OTC drugs		1,322,811		1,024,602
Nutritional supplements		221,031		107,194
TCM		23,199		13,681
Sundry products		546,720		438,736
Medical devices		929,430		859,392
Total online revenue	$	4,912,834	$	2,443,605
Drug wholesale
Prescription drugs	$	5,966,148	$	4,880,491
OTC drugs		915,146		1,074,261
Nutritional supplements		59,841		21,691
TCM		28,967		98,828
Sundry products		2,597		5,682
Medical devices		358,305		21,238
Total wholesale revenue	$	7,331,004	$	6,102,191
Total revenue	$	31,054,312	$	25,280,784

Schedule of receivables and contract liabilities from contracts with customers

	June 30, 2020		March 31, 2020
Trade receivable(included in accounts receivable, net)	$	8,984,595	$	9,770,656
Contract liabilities (included in accrued expenses)		1,112,508		1,106,982

Schedule of cash equivalents and restricted cash

	June 30, 2020		March 31, 2020
Cash and cash equivalents	$	18,477,212	$	16,176,318
Restricted cash		15,095,116		14,806,288
Cash, cash equivalents and restricted cash	$	33,572,328	$	30,982,606

Schedule of estimated useful lives of property and equipment

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

Schedule of estimated useful lives of intangible assets

	Estimated Useful Life
Land use rights	50 years
Software	3 years
License	Infinite

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Trade Accounts Receivable (Tables)

3 Months Ended

Jun. 30, 2020

Receivables [Abstract]

Schedule of trade accounts receivable

	June 30, 2020			March 31, 2020
Accounts receivable	$	11,378,909		$	12,034,726
Less: allowance for doubtful accounts		(2,394,314	)		(2,264,070	)
Trade accounts receivable, net	$	8,984,595		$	9,770,656

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Other Current Assets (Tables)

3 Months Ended

Jun. 30, 2020

Prepaid Expense and Other Assets, Current [Abstract]

Schedule of other current assets

	June 30, 2020		March 31, 2020
Rental deposits (1)	$	1,558,965	$	1,364,975
Prepaid and other current assets		276,962		163,565
Total	$	1,835,927	$	1,528,540

(1) The balance as of June 30, 2020 and March 31, 2020 includes short-term refundable rental security deposits.

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Property and Equipment (Tables)

3 Months Ended

Jun. 30, 2020

Property, Plant and Equipment [Abstract]

Schedule of property and equipment

	June 30, 2020			March 31, 2020
Building	$	5,898,768		$	5,880,627
Leasehold improvements		9,397,190			9,209,136
Farmland development cost		1,691,632			1,686,430
Office equipment and furniture		5,587,888			5,632,955
Motor vehicles		505,883			504,327
Total		23,081,361			22,913,475
Less: Accumulated depreciation		(13,758,940	)		(13,059,852	)
Impairment*		(2,226,731	)		(2,219,883	)
Property and equipment, net	$	7,095,690		$	7,633,740

* The variance of impairment from March 31, 2020 to June 30, 2020 is solely caused by exchange rate variance.

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Long-Term Investment (Tables)

3 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Schedule of long-term investment

	June 30, 2020			March 31, 2020
Kahamadi Bio (1)	$	3,214	*	$	6,217	*
Zhetong Medical (2)		3,960,544			2,538,234
Advance to suppliers, net	$	3,963,758		$	2,544,451

(1) It represents 49% investment in Kahamadi Bio. The investment is recorded using the equity method. Kahamadi Bio suffered loss of $3,015 the three months ended June 30, 2020.

(2) It represents 39% investment in Zhejiang Zhetong Medical Co., Ltd. Zhetong Medical was established in March 2020 to target potential acquisitions or cooperate with local pharmacies. By attracting more funds from local investors, the Company expects to continue growing its local network in the future.

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Advances to Suppliers (Tables)

3 Months Ended

Jun. 30, 2020

Advances to Suppliers [Abstract]

Schedule of advance to suppliers

	June 30, 2020			March 31, 2020
Advance to suppliers	$	3,160,046		$	2,198,863
Less: allowance for unrefundable advances		(922,326	)		(1,024,063	)
Advance to suppliers, net	$	2,237,720		$	1,174,800

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Farmland Assets (Tables)

3 Months Ended

Jun. 30, 2020

Farmland Assets [Abstract]

Schedule of farmland assets

	June 30,			March 31,
	2020			2020
Farmland assets	$	2,191,944		$	2,177,606
Less: Impairment*		(1,439,687	)		(1,435,259	)
Farmland assets, net	$	752,257		$	742,347

* As of March 31, 2018, the book value of the Ginkgo trees planted in Qianhong Agriculture's farmland, including their cultivation cost and land lease amortization expense, was approximately $2,416,839. Based on an independent appraisal report, the value of the Ginkgo trees was approximately $796,286 as of March 31, 2018. As a result, the Company recorded an agricultural inventory impairment of $1,620,553 as of March 31, 2018. The difference between the recorded impairment loss and impairment balance in the above is primarily due to the exchange rate variance over years. There are no leasehold impairment expense in the three months ended June 30, 2020 and 2019.

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Other Noncurrent Assets (Tables)

3 Months Ended

Jun. 30, 2020

Other Assets, Noncurrent Disclosure [Abstract]

Schedule of other noncurrent assets

	June 30, 2020		March 31, 2020
Forest land use rights*	$	985,156	$	994,558
Others		64,028		52,205
Total	$	1,049,184	$	1,046,763

* The prepayment for lease of forest land use rights is a payment made to a local government in connection with entering into an operating land lease agreement. The land is currently used to cultivate Ginkgo trees. The forest rights certificate from the local village extends the life of the lease to January 31, 2060.

Schedule of amortizations of the prepayment for lease of land use right

For the year ending June 30,	Amount
2021	$	26,515
2022		26,515
2023		26,515
2024		26,515
2025		26,515
Thereafter		852,581

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Leases (Tables)

3 Months Ended

Jun. 30, 2020

Leases [Abstract]

Schedule of cash flow information related to leases

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows paid for operating leases	$	1,671,118
Right-of-use assets obtained in exchange for lease obligations:
Operating leases		-

Schedule of condensed balance sheet related to leases

Operating leases:
Operating lease right-of-use assets	$	19,351,247
Current portion of operating lease liabilities	$	466,213
Long-term operating lease liabilities		16,917,159
Total operating lease liabilities	$	17,383,372
Weighted average remaining lease term
Operating leases		3.2
Weighted average discount rate
Operating leases		4.19	%

Schedule of lease liabilities under operating leases

	Operating
For the year ending June 30,	Leases
2021	$	485,355
2022		6,345,189
2023		4,510,762
2024		3,277,971
2025		1,995,568
Thereafter		2,575,035
Total lease payments		19,189,880
Less: imputed interest		(1,806,508	)
Total lease liabilities	$	17,383,372

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Intangible Assets (Tables)

3 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of net intangible assets

	June 30, 2020			March 31, 2020
License (1)	$	2,246,880		$	2,220,512
Software(2)		1,086,366			1,083,024
Land use rights (3)		1,379,337			1,375,095
Total intangible assets		4,712,583			4,678,631
Less: accumulated amortization		(735,234	)		(667,633	)
Less: impairment(4)		(618,942	)		(617,038	)
Intangible assets, net	$	3,358,407		$	3,393,960

Amortization expense of intangibles amounted to $65,389 and $58,466 for the three months ended June 30, 2020 and 2019, respectively.

(1)	This represents the fair value of the licenses of insurance applicable drugstores acquired from a variety of drugstores such as Sanhao Pharmacy and several local stores. The licenses allow patients to pay by using insurance cards at stores. The stores are reimbursed from the Human Resource and Social Security Department of Hangzhou City. In 2014, the Company acquired Sanhao Pharmacy, a drugstore chain. In September 2017, the Company acquired several new stores for the purpose of the Municipal Social Medical Reimbursement Qualification Certificates. On January 9, 2020, the Company acquired a local drugstore chain. The acquired drugstores ceased their stores' business and liquidate all of the stores' accounts after Jiuzhou Pharmacy acquired them. In March 2020, the drugstore chain has dissolved and its certificates were transferred to new stores opened at the same time.
(2)	These balances primarily include the SAP ERP system, the Internet Clinic Diagnosis Terminal system and the Chronic Disease Management system. In 2017, we have installed a leading ERP system, SAP from Germany. SAP is a well-known management system used by many fortune 500 companies. It is being amortized over three years since its installation. In 2020, we have installed an internet Clinic Diagnosis System used to strengthen our ability to perform online diagnosis which may increase more customer spending and a Chronic Disease Management System used to better manage and monitor our members' health. As of June 30, 2020, the SAP system has a net value of $135,698 (RMB 959,352), the internet Clinic Diagnosis System has a net value of approximately $380,313 (RMB 2,688,709), the Chronic Disease Management System has a net value of approximately $16,462 (RMB 116,379) .
(3)	In July 2013, the Company purchased the land use rights of a plot of land in Lin'an, Hangzhou, intended for the establishment of an herb processing plant in the future. However, as the Company's farming business in Lin'an has not grown, the Company does not expect completion of the plant in the near future.
(4)	In the year ended March 31, 2020, the company evaluated the licenses of insurance applicable drugstores acquired in the past based on the discounted positive cash value. Due to the stricter government insurance policy in fiscal year 2021, the value of these licenses has declined. As a result, the company recorded an impairment. There are no impairment expense in the three months ended June 30, 2020 and 2019.

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Notes Payable (Tables)

3 Months Ended

Jun. 30, 2020

Notes Payable [Abstract]

Schedule of credit facilities with banks

		Origination	Maturity	June 30,		March 31,
Beneficiary	Endorser	date	date	2020		2020
Jiuzhou Pharmacy(1)	HUB	10/09/19	04/09/20		-		3,478,259
Jiuzhou Pharmacy(1)	HUB	11/06/19	05/06/20		-		164,582
Jiuzhou Pharmacy(1)	HUB	12/05/19	06/05/20		-		3,106,474
Jiuzhou Pharmacy(1)	HUB	12/31/19	06/30/20		-		2,289,308
Jiuzhou Pharmacy(1)	HUB	01/06/20	07/06/20		129,856		129,457
Jiuzhou Pharmacy(1)	HUB	02/19/20	08/19/20		5,120,844		5,105,096
Jiuzhou Pharmacy(1)	HUB	03/10/20	09/10/20		5,341,297		5,324,871
Jiuxin Medicine(1)	HUB	12/26/19	06/26/20		-		1,371,992
Jiuxin Medicine(1)	HUB	12/31/19	06/30/20				3,943,776
Jiuxin Medicine(1)	HUB	03/31/20	09/30/20		1,697,376		1,692,156
Jiuzhou Pharmacy(1)	HUB	04/10/20	10/10/20		2,969,129
Jiuzhou Pharmacy(1)	HUB	04/29/20	10/29/20		546,874
Jiuzhou Pharmacy(1)	HUB	05/09/20	11/09/20		3,803,552		-
Jiuzhou Pharmacy(1)	HUB	06/24/20	12/24/20		1,405,995		-
Jiuzhou Pharmacy(1)	HUB	06/30/20	12/30/20		891,122		-
Jiuxin Medicine(1)	HUB	06/30/20	12/30/20		4,809,329		-
Total				$	26,715,374	$	26,605,971

(1) As of June 30, 2020, the Company had $26,715,374 (RMB 188,870,639) of notes payable from HUB. The Company is required to hold restricted cash in the amount of $14,913,825 (RMB 105,684,113) with HUB as collateral against these bank notes. Included in the restricted cash is a total of $8,770,422 three-year deposit (RMB 62,150,000) deposited into HUB as a collateral for current and future notes payable from HUB.  As of March 31, 2020, the Company had $26,605,971 (RMB 188,677,437) of notes payable from HUB. The Company is required to hold restricted cash in the amount of $14,596,179 (RMB 103,509,456) with HUB as collateral against these bank notes. Included in the restricted cash is a total of $8,763,958 three-year deposit (RMB 62,150,000) deposited into HUB as a collateral for current and future notes payable from HUB.

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Related Party Transactions and Arrangements (Tables)

3 Months Ended

Jun. 30, 2020

Related Party Transactions [Abstract]

Schedule of amounts payable to related parties

	June 30, 2020		March 31, 2020
Due to a director and CEO (1) :		491,300		490,218

(1) Due to foreign exchange restrictions, the Company's director and CEO, 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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Warrants (Tables)

3 Months Ended

Jun. 30, 2020

Warrants [Abstract]

Schedule of estimated fair value of warrants using the binominal pricing model

	Common Stock Warrants			Common Stock Warrants
	June 30, 2020			March 31, 2020
Stock price	$	1.44		$	1.77
Exercise price	$	3.10		$	3.10
Annual dividend yield		-	%		-	%
Expected term (years)		0.56			0.81
Risk-free interest rate		0.18	%		0.71	%
Expected volatility		98.86	%		62.08	%

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Loss Per Share (Tables)

3 Months Ended

Jun. 30, 2020

Loss Per Share [Abstract]

Schedule of reconciliation of the basic and diluted (loss) earnings per share

	The three months ended June 30,
	2020			2019
Net loss attributable to controlling interest	$	(231,509	)	$	(2,134,951	)
Weighted average shares used in basic computation		34,428,271			32,453,269
Diluted effect of stock options and warrants		-			-
Weighted average shares used in diluted computation		34,428,271			32,453,269
Loss per share – Basic:		-			-
Net loss attributable to controlling interest	$	(0.01	)	$	(0.07	)
Loss per share – Diluted:
Net loss attributable to controlling interest	$	(0.01	)	$	(0.07	)

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Segments (Tables)

3 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Summary of segment of the continuing operations

	Retail drugstores		Online Pharmacy			Drug wholesale			Herb farming		Total
Revenue	$	18,810,474	$	4,912,834			7,331,004			-		31,054,312
Cost of goods		12,402,182		4,228,411			6,443,500			-		23,074,093
Gross profit	$	6,408,292	$	684,423			887,504			-		7,980,219
Selling expenses		4,977,047		704,876			590,484			-		6,272,407
General and administrative expenses		1,128,083		59,011			933,072			-		2,120,166
Loss from operations	$	303,162	$	(79,464	)		(636,052	)		-		(412,354	)
Depreciation and amortization	$	750,498	$	-			10,042			-		760,540
Total capital expenditures	$	169,807	$	-						-		169,807

	Retail drugstores			Online Pharmacy			Drug wholesale			Herb farming		Total
Revenue	$	16,734,988		$	2,443,605			6,102,191			-		25,280,784
Cost of goods		11,682,721			2,096,850			5,439,775			-		19,219,346
Gross profit	$	5,052,267		$	346,755			662,416			-		6,061,438
Selling expenses		4,835,666			473,380			659,505			-		5,968,551
General and administrative expenses		1,733,704			55,123			1,062,785			-		2,851,612
Loss from operations	$	(1,517,103	)	$	(181,748	)		(1,059,874	)		-		(2,758,725	)
Depreciation and amortization	$	504,463		$	-			8,486			-		512,949
Total capital expenditures	$	753,173		$	-						-		753,173

Summary of net revenue from external customers through its retail drugstores by main products

	For the three months ended
	June 30,
	2020		2019
Prescription drugs	$	7,406,774	$	5,695,286
OTC drugs		6,818,484		7,240,228
Nutritional supplements		1,347,769		1,231,133
TCM		949,012		1,104,050
Sundry products		422,551		298,198
Medical devices		1,865,884		1,166,093
Total	$	18,810,474	$	16,734,988

	For the three months ended
	June 30,
	2020		2019
Prescription drugs	$	1,869,643	$	-
OTC drugs		1,322,811		1,024,602
Nutritional supplements		221,031		107,194
TCM		23,199		13,681
Sundry products		546,720		438,736
Medical devices		929,430		859,392
Total	$	4,912,834	$	2,443,605

	For the three months ended
	June 30,
	2020		2019
Prescription drugs	$	5,966,148	$	4,880,491
OTC drugs		915,146		1,074,261
Nutritional supplements		59,841		21,691
TCM		28,967		98,828
Sundry products		2,597		5,682
Medical devices		358,305		21,238
Total	$	7,331,004	$	6,102,191

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Description of Business and Organization (Details)	3 Months Ended
	Jun. 30, 2020
Variable Interest Entity [Line Items]
Entity ownership percentage	100.00%
Renovation [Member]
Variable Interest Entity [Line Items]
Ownership background, description	Incorporated in Hong Kong SAR on September 2, 2008
Entity ownership percentage	100.00%
Jiuxin Management [Member]
Variable Interest Entity [Line Items]
Ownership background, description	Established in the PRC on October 14, 2008 Deemed a wholly foreign owned enterprise ("WFOE") under PRC law Registered capital of $14.5 million fully paid
Entity ownership percentage	100.00%
Shouantang Technology [Member]
Variable Interest Entity [Line Items]
Ownership background, description	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
Entity ownership percentage	100.00%
Qianhong Agriculture [Member]
Variable Interest Entity [Line Items]
Ownership background, description	Established in the PRC on August 10, 2010 by Jiuxin Management Registered capital of RMB 10 million fully paid Carries out herb farming business
Entity ownership percentage	100.00%
Jiuzhou Pharmacy [Member]
Variable Interest Entity [Line Items]
Ownership background, description	Established in the PRC on September 9, 2003 Registered capital of RMB 5 million fully paid Operates the "Jiuzhou Grand Pharmacy" stores in Hangzhou	[1]
Entity ownership description	VIE by contractual arrangements	[1],[2]
Jiuzhou Clinic [Member]
Variable Interest Entity [Line Items]
Ownership background, description	Established in the PRC as a general partnership on October 10, 2003 Operates a medical clinic adjacent to one of Jiuzhou Pharmacy's stores	[1]
Entity ownership description	VIE by contractual arrangements	[1],[2]
Jiuzhou Service [Member]
Variable Interest Entity [Line Items]
Ownership background, description	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	[1]
Entity ownership description	VIE by contractual arrangements	[1],[2]
Jiuxin Medicine [Member]
Variable Interest Entity [Line Items]
Ownership background, description	Established in PRC on December 31, 2003 Acquired by Jiuzhou Pharmacy in August 2011 10% of shares sold On April 20, 2018 Registered capital of RMB 10 million fully paid Carries out pharmaceutical distribution services
Entity ownership description	VIE by contractual arrangements as a wholly-owned subsidiary of Jiuzhou Pharmacy	[2]
Jiutong Medical [Member]
Variable Interest Entity [Line Items]
Ownership background, description	Established in the PRC on December 20, 2011 by Renovation Registered capital of $2.6 million fully paid Currently has no operation
Entity ownership percentage	100.00%
Shouantang Bio [Member]
Variable Interest Entity [Line Items]
Ownership background, description	Established in the PRC in October, 2014 by Shouantang Technology 100% held by Shouantang Technology Registered capital of RMB 1,000,000 fully paid Sells nutritional supplements under its own brand name
Entity ownership percentage	100.00%
Jiuyi Technology [Member]
Variable Interest Entity [Line Items]
Ownership background, description	Established in the PRC on September 10, 2015 100% held by Renovation Technical support to online pharmacy
Entity ownership percentage	100.00%
Kahamadi Bio [Member]
Variable Interest Entity [Line Items]
Ownership background, description	Established in the PRC in May 2016 49% held by Shouantang Bio Registered capital of RMB 10 million Develop brand name for nutritional supplements
Entity ownership percentage	49.00%
Lin’An Jiuzhou [Member]
Variable Interest Entity [Line Items]
Ownership background, description	Established in the PRC in March 31, 2017 100% held by Jiuxin Management Registered capital of RMB 5 million Explore retail pharmacy market in Lin'An City
Entity ownership percentage	100.00%
Linjia Medical [Member]
Variable Interest Entity [Line Items]
Ownership background, description	Established in the PRC in September 27, 2017 51% held by Jiuzhou Pharmacy Registered capital of RMB 20 million Operates local clinics
Entity ownership description	VIE by contractual arrangements as a controlled subsidiary of Jiuzhou Pharmacy	[2]
Ayi Health [Member]
Variable Interest Entity [Line Items]
Ownership background, description	Established in the PRC in March 29, 2019 51% held by Jiuzhou Pharmacy Registered capital of RMB 10 million Provide technical Support for medial service
Entity ownership description	VIE by contractual arrangements as a controlled subsidiary of Jiuzhou Pharmacy	[2]

[1] Jiuzhou Pharmacy, Jiuzhou Clinic and Jiuzhou Service had been under the common control of Mr. Lei Liu and Ms. Li Qi, the three shareholders (the "Owners") since their respective establishment dates, pursuant to agreements among the Owners to vote their interests in concert as memorialized in a voting rights agreement. Based on such voting agreement, the Company has determined that common control exists among these three companies. The Owners have operated these three companies in conjunction with one another since each company's respective establishment date. Jiuxin Medicine is also deemed under the common control of the Owners as 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: a consulting services agreement, operating agreement, equity pledge agreement, voting rights agreement and option agreement. Because such agreements 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 each of the three companies (as well as 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 under the control of Jiuzhou Pharmacy, Jiuxin Medicine and Shouantang Bio are consolidated into the financial statements of the Company.

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Description of Business and Organization (Details Textual)	1 Months Ended	3 Months Ended
	Sep. 17, 2009 shares	Jun. 30, 2020 USD ($)	Jun. 30, 2020 CNY (¥)	Jan. 09, 2020 $ / shares	Mar. 29, 2019	Apr. 20, 2018 USD ($)	Apr. 20, 2018 CNY (¥)	Mar. 31, 2018 USD ($)	Mar. 31, 2018 CNY (¥)	May 31, 2016	Jul. 31, 2012 USD ($)	Jul. 16, 2010 USD ($)
Description of Business and Organization (Textual)
Date of incorporation		Dec. 19, 2006
Local drugstores price per share | $ / shares				$ 0.14
RMB [Member]
Description of Business and Organization (Textual)
Local drugstores price per share | $ / shares				$ 1
Renovation Investment [Member]
Description of Business and Organization (Textual)
Percentage of capital stock in exchange transaction	100.00%
Issuance of equity consideration, shares | shares	7,900,000
Zhejiang Jiuxin Medicine [Member]
Description of Business and Organization (Textual)
Issuance of equity consideration | $						$ 79,625
Percentage of capital stock in exchange transaction		51.00%	51.00%
Zhejiang Jiuxin Medicine [Member] | RMB [Member]
Description of Business and Organization (Textual)
Issuance of equity consideration							¥ 507,760
Registered capital paid			¥ 10,000,000
Hangzhou Jiuzhou Grand Pharmacy Chain [Member]
Description of Business and Organization (Textual)
Percentage of capital stock in exchange transaction					51.00%			51.00%	51.00%
Total amount of investment | $								$ 741,540
Hangzhou Jiuzhou Grand Pharmacy Chain [Member] | RMB [Member]
Description of Business and Organization (Textual)
Registered capital paid			¥ 5,000,000
Total amount of investment									¥ 5,100,000
Shouantang Bio [Member]
Description of Business and Organization (Textual)
Percentage of capital stock in exchange transaction		100.00%	100.00%							49.00%
Shouantang Bio [Member] | RMB [Member]
Description of Business and Organization (Textual)
Registered capital paid			¥ 1,000,000
Jiuxin Medicine [Member]
Description of Business and Organization (Textual)
Percentage of capital stock in exchange transaction		10.00%	10.00%			10.00%	10.00%
Zhejiang Jiuxin Investment Management [Member]
Description of Business and Organization (Textual)
Registered capital paid | $		$ 14,500,000
Hangzhou Qianhong Agriculture Development [Member] | RMB [Member]
Description of Business and Organization (Textual)
Registered capital paid			¥ 10,000,000
Hangzhou Jiutong Medical Technology [Member]
Description of Business and Organization (Textual)
Registered capital paid | $		$ 2,600,000
Kahamadi Bio [Member]
Description of Business and Organization (Textual)
Percentage of capital stock in exchange transaction		49.00%	49.00%
Kahamadi Bio [Member] | RMB [Member]
Description of Business and Organization (Textual)
Registered capital paid			¥ 10,000,000
Lin'An Jiuzhou [Member]
Description of Business and Organization (Textual)
Percentage of capital stock in exchange transaction		100.00%	100.00%
Lin'An Jiuzhou [Member] | RMB [Member]
Description of Business and Organization (Textual)
Registered capital paid			¥ 5,000,000
Ayi Health [Member]
Description of Business and Organization (Textual)
Percentage of capital stock in exchange transaction		51.00%	51.00%
Ayi Health [Member] | RMB [Member]
Description of Business and Organization (Textual)
Registered capital paid			¥ 10,000,000
Zhejiang Shouantang Medical Technology [Member]
Description of Business and Organization (Textual)
Registered capital paid | $												$ 20,000,000
Registered capital requirement reduced | $											$ 11,000,000
Hangzhou Jiuzhou Medical and Public Health Service [Member] | RMB [Member]
Description of Business and Organization (Textual)
Registered capital paid			¥ 20,000,000
Hangzhou Jiuyi Medical Technology [Member]
Description of Business and Organization (Textual)
Percentage of capital stock in exchange transaction		100.00%	100.00%
Jiuzhou Service [Member] | RMB [Member]
Description of Business and Organization (Textual)
Registered capital paid			¥ 500,000

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Liquidity (Details)	Jun. 03, 2020 USD ($) $ / shares shares	Apr. 15, 2019 USD ($) $ / shares shares	Jun. 30, 2020 USD ($)	Jun. 30, 2020 CNY (¥)
Liquidity (Textual)
Bank credit line from two local banks			$ 27,460,000
Two credit line agreements [Member]
Liquidity (Textual)
Bank credit line from two local banks			740,000
Two credit line agreements [Member] | Jiuzhou Pharmacy [Member]
Liquidity (Textual)
Bank credit line from two local banks			$ 7,175,000
Two credit line agreements [Member] | Jiuzhou Pharmacy [Member] | RMB [Member]
Liquidity (Textual)
Bank credit line from two local banks | ¥				¥ 50,000,000
Private Placement [Member]
Liquidity (Textual)
Purchase of aggregate of common stock | shares	5,000,004	4,000,008
Common stock price, per share | $ / shares	$ 2.00	$ 2.50
Gross proceeds from private placement	$ 10,000,008	$ 10,000,020

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Summary of Significant Accounting Policies (Details) - USD ($)	Jun. 30, 2020	Mar. 31, 2020
Summary of fair values of derivative instruments
Cash, cash equivalents and restricted cash	$ 33,572,328
Financial assets available for sale	157,644	$ 157,159
Account receivable	8,984,595
Notes receivable	28,290
Other receivable	5,599,565
Accounts payable	16,107,594
Notes payable	26,715,374
Other payable	2,176,992
Long-term loan payable	5,851,778
Employee Deposits	14,145
Warrants liability	68,980
Total	99,277,285
Active Market for Identical Assets (Level 1) [Member]
Summary of fair values of derivative instruments
Cash, cash equivalents and restricted cash	33,572,328
Financial assets available for sale
Account receivable	8,984,595
Notes receivable	28,290
Other receivable	5,599,565
Accounts payable	16,107,594
Notes payable
Other payable	2,176,992
Long-term loan payable
Employee Deposits
Warrants liability
Total	66,469,364
Observable Inputs (Level 2) [Member]
Summary of fair values of derivative instruments
Cash, cash equivalents and restricted cash
Financial assets available for sale
Account receivable
Notes receivable
Other receivable
Accounts payable
Notes payable	26,715,374
Other payable
Long-term loan payable	5,851,778
Employee Deposits
Warrants liability	68,980
Total	32,636,132
Unobservable Inputs (Level 3) [Member]
Summary of fair values of derivative instruments
Cash, cash equivalents and restricted cash
Financial assets available for sale	157,644
Account receivable
Notes receivable
Other receivable
Accounts payable
Notes payable
Other payable
Long-term loan payable
Employee Deposits	14,145
Warrants liability
Total	$ 171,789

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Summary of Significant Accounting Policies (Details 1) - USD ($)	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Disaggregation of Revenue [Line Items]
Total revenue	$ 31,054,312	$ 25,280,784
Retail drugstores [Member]
Disaggregation of Revenue [Line Items]
Total revenue	18,810,474	16,734,988
Retail drugstores [Member] | Prescription drugs [Member]
Disaggregation of Revenue [Line Items]
Total revenue	7,406,774	5,695,286
Retail drugstores [Member] | OTC drugs [Member]
Disaggregation of Revenue [Line Items]
Total revenue	6,818,484	7,240,228
Retail drugstores [Member] | Nutritional supplements [Member]
Disaggregation of Revenue [Line Items]
Total revenue	1,347,769	1,231,133
Retail drugstores [Member] | TCM [Member]
Disaggregation of Revenue [Line Items]
Total revenue	949,012	1,104,050
Retail drugstores [Member] | Sundry products [Member]
Disaggregation of Revenue [Line Items]
Total revenue	422,551	298,198
Retail drugstores [Member] | Medical devices [Member]
Disaggregation of Revenue [Line Items]
Total revenue	1,865,884	1,166,093
Online pharmacy [Member]
Disaggregation of Revenue [Line Items]
Total revenue	4,912,834	2,443,605
Online pharmacy [Member] | Prescription drugs [Member]
Disaggregation of Revenue [Line Items]
Total revenue	1,869,643
Online pharmacy [Member] | OTC drugs [Member]
Disaggregation of Revenue [Line Items]
Total revenue	1,322,811	1,024,602
Online pharmacy [Member] | Nutritional supplements [Member]
Disaggregation of Revenue [Line Items]
Total revenue	221,031	107,194
Online pharmacy [Member] | TCM [Member]
Disaggregation of Revenue [Line Items]
Total revenue	23,199	13,681
Online pharmacy [Member] | Sundry products [Member]
Disaggregation of Revenue [Line Items]
Total revenue	546,720	438,736
Online pharmacy [Member] | Medical devices [Member]
Disaggregation of Revenue [Line Items]
Total revenue	929,430	859,392
Drug wholesale [Member]
Disaggregation of Revenue [Line Items]
Total revenue	7,331,004	6,102,191
Drug wholesale [Member] | Prescription drugs [Member]
Disaggregation of Revenue [Line Items]
Total revenue	5,966,148	4,880,491
Drug wholesale [Member] | OTC drugs [Member]
Disaggregation of Revenue [Line Items]
Total revenue	915,146	1,074,261
Drug wholesale [Member] | Nutritional supplements [Member]
Disaggregation of Revenue [Line Items]
Total revenue	59,841	21,691
Drug wholesale [Member] | TCM [Member]
Disaggregation of Revenue [Line Items]
Total revenue	28,967	98,828
Drug wholesale [Member] | Sundry products [Member]
Disaggregation of Revenue [Line Items]
Total revenue	2,597	5,682
Drug wholesale [Member] | Medical devices [Member]
Disaggregation of Revenue [Line Items]
Total revenue	$ 358,305	$ 21,238

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Summary of Significant Accounting Policies (Details 2) - USD ($)	Jun. 30, 2020	Mar. 31, 2020
Accounting Policies [Abstract]
Trade receivable(included in accounts receivable, net)	$ 8,984,595	$ 9,770,656
Contract liabilities (included in accrued expenses)	$ 1,112,508	$ 1,106,982

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Summary of Significant Accounting Policies (Details 3) - USD ($)	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019
Accounting Policies [Abstract]
Cash and cash equivalents	$ 18,477,212	$ 16,176,318
Restricted cash	15,095,116	14,806,288
Cash, cash equivalents and restricted cash	$ 33,572,328	$ 30,982,606	$ 23,150,153	$ 24,745,202

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Summary of Significant Accounting Policies (Details 4)	3 Months Ended
	Jun. 30, 2020
Leasehold improvements [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of property and equipment	3 years
Leasehold improvements [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of property and equipment	10 years
Motor vehicles [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of property and equipment	3 years
Motor vehicles [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of property and equipment	5 years
Office equipment & furniture [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of property and equipment	3 years
Office equipment & furniture [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of property and equipment	5 years
Buildings [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of property and equipment	35 years

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Summary of Significant Accounting Policies (Details 5)	3 Months Ended
	Jun. 30, 2020
Land use rights [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated useful life of intangible assets	50 years
Software [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated useful life of intangible assets	3 years
License [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated useful life of intangible assets, description	Infinite

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Summary of Significant Accounting Policies (Details Textual)	3 Months Ended
	Jun. 30, 2020 USD ($) Vendors	Jun. 30, 2019 USD ($) Vendors	Mar. 31, 2020 USD ($)	Apr. 02, 2019 USD ($)	Mar. 31, 2015 USD ($)	Mar. 31, 2015 CNY (¥)
Summary of Significant Accounting Policies (Textual)
Ownership percentage	100.00%
Voting ownership interest	50.00%
Value added tax, percentage	17.00%
Advertising and promotion costs	$ 77,068	$ 80,049
Foreign currency translation, description	The balance sheet amounts, with the exception of equity, at June 30, 2020 and at March 31, 2020 were translated at 1 RMB to 0.1414 USD and at 1 RMB to 0.1410 USD, respectively. The average translation rates applied to income and cash flow statement amounts for the three months ended June 30, 2020 and 2019 were at 1 RMB to 0.1411 USD and at 1 RMB to 0.1466 USD, respectively.
Insurance covered by own bank					$ 72,800
Bank uncovered amount					$ 72,800
Deposits	$ 24,279,528		$ 30,974,714
Retained earnings				$ 422,354
Weighted average remaining lease term	3 years 2 months 12 days
Weighted average discount rate	4.19%
Minimum [Member] | Retail Site [Member]
Summary of Significant Accounting Policies (Textual)
Term of agreement for operating leases	3 years
Maximum [Member] | Retail Site [Member]
Summary of Significant Accounting Policies (Textual)
Term of agreement for operating leases	10 years
Cost of Goods, Total [Member]
Summary of Significant Accounting Policies (Textual)
Concentration risk, percentage	35.00%	49.20%
Number of vendors | Vendors	2	2
Advances to Suppliers [Member]
Summary of Significant Accounting Policies (Textual)
Concentration risk, percentage	10.00%	10.00%
Number of vendors | Vendors	2	2
Accounts Receivable [Member]
Summary of Significant Accounting Policies (Textual)
Concentration risk, percentage	10.00%	10.00%
Sales Revenue, Net [Member]
Summary of Significant Accounting Policies (Textual)
Concentration risk, percentage	10.00%	10.00%
RMB [Member]
Summary of Significant Accounting Policies (Textual)
Insurance covered by own bank | ¥						¥ 500,000
Bank uncovered amount | ¥						¥ 500,000

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Financial Assets Available for Sale (Details)	Jun. 30, 2020 USD ($)	Jun. 30, 2020 CNY (¥)	Mar. 31, 2020 USD ($)	Mar. 31, 2020 CNY (¥)
Financial Assets Available for Sale (Textual)
Financial assets available for sale | $	$ 157,644		$ 157,159
Retail Pharmaceutical Busines [Member]
Financial Assets Available for Sale (Textual)
Invested total amount | $	72,551
Songlu Pharmaceutical [Member]
Financial Assets Available for Sale (Textual)
Invested total amount | $	$ 84,608
Percentage of shares	0.50%	0.50%
RMB [Member]
Financial Assets Available for Sale (Textual)
Financial assets available for sale | ¥		¥ 1,114,500		¥ 1,114,500
RMB [Member] | Retail Pharmaceutical Busines [Member]
Financial Assets Available for Sale (Textual)
Invested total amount | ¥		514,500
RMB [Member] | Songlu Pharmaceutical [Member]
Financial Assets Available for Sale (Textual)
Invested total amount | ¥		¥ 600,000

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Trade Accounts Receivable (Details) - USD ($)	Jun. 30, 2020	Mar. 31, 2020
Receivables [Abstract]
Accounts receivable	$ 11,378,909	$ 12,034,726
Less: allowance for doubtful accounts	(2,394,314)	(2,264,070)
Trade accounts receivable, net	$ 8,984,595	$ 9,770,656

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Trade Accounts Receivable (Details Textual) - USD ($)	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Mar. 31, 2020
Trade Accounts Receivable (Textual)
Accounts receivable written off	$ 26,834	$ 36,068
Trade accounts receivable pledged as collateral for borrowings	$ 515,771		$ 627,055

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Other Current Assets (Details) - USD ($)		Jun. 30, 2020	Mar. 31, 2020
Other Current Assets [Abstract]
Rental deposits	[1]	$ 1,558,965	$ 1,364,975
Prepaid and other current assets		276,962	163,565
Total		$ 1,835,927	$ 1,528,540

[1] The balance as of June 30, 2020 and March 31, 2020 includes short-term refundable rental security deposits.

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Property and Equipment (Details) - USD ($)		Jun. 30, 2020	Mar. 31, 2020
Property, Plant and Equipment [Line Items]
Total		$ 23,081,361	$ 22,913,475
Less: Accumulated depreciation		(13,758,940)	(13,059,852)
Impairment	[1]	(2,226,731)	(2,219,883)
Property and equipment, net		7,095,690	7,633,740
Building [Member]
Property, Plant and Equipment [Line Items]
Total		5,898,768	5,880,627
Leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Total		9,397,190	9,209,136
Farmland development cost [Member]
Property, Plant and Equipment [Line Items]
Total		1,691,632	1,686,430
Office equipment and furniture [Member]
Property, Plant and Equipment [Line Items]
Total		5,587,888	5,632,955
Motor vehicles [Member]
Property, Plant and Equipment [Line Items]
Total		$ 505,883	$ 504,327

[1] The variance of impairment from March 31, 2020 to June 30, 2020 is solely caused by exchange rate variance.

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Property and Equipment (Details Textual) - USD ($)	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Property and Equipment (Textual)
Depreciation expenses for property and equipment	$ 695,151	$ 441,559

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Long-Term Investment (Details) - USD ($)		Jun. 30, 2020	Mar. 31, 2020
Advance to suppliers, net		$ 3,963,758	$ 2,544,451
Kahamadi Bio [Member]
Advance to suppliers, net	[1]	3,214	6,217
Zhetong Medical [Member]
Advance to suppliers, net	[2]	$ 3,960,544	$ 2,538,234

[1] It represents 49% investment in Kahamadi Bio. The investment is recorded using the equity method. Kahamadi Bio suffered loss of $3,015 the three months ended June 30, 2020.

[2] It represents 39% investment in Zhejiang Zhetong Medical Co., Ltd. Zhetong Medical was established in March 2020 to target potential acquisitions or cooperate with local pharmacies. By attracting more funds from local investors, the Company expects to continue growing its local network in the future.

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Long-Term Investment (Details Textual)	6 Months Ended
	Jun. 30, 2020 USD ($)
Kahamadi Bio [Member]
Long-Term Investment (Textual)
Investment percentage	49.00%
Suffered loss	$ 3,015
Zhetong Medical [Member]
Long-Term Investment (Textual)
Investment percentage	39.00%

XML

Advances to Suppliers (Details) - USD ($)	Jun. 30, 2020	Mar. 31, 2020
Advances to Suppliers [Abstract]
Advance to suppliers	$ 3,160,046	$ 2,198,863
Less: allowance for unrefundable advances	(922,326)	(1,024,063)
Advance to suppliers, net	$ 2,237,720	$ 1,174,800

XML

Inventory (Details) - USD ($)	Jun. 30, 2020	Mar. 31, 2020
Inventory (Textual)
Finished goods	$ 11,141,411	$ 12,247,004

XML

Farmland Assets (Details) - USD ($)		Jun. 30, 2020	Mar. 31, 2020
Farmland Assets [Abstract]
Farmland assets		$ 2,191,944	$ 2,177,606
Less: Impairment	[1]	(1,439,687)	(1,435,259)
Farmland assets, net		$ 752,257	$ 742,347

[1] As of March 31, 2018, the book value of the Ginkgo trees planted in Qianhong Agriculture's farmland, including their cultivation cost and land lease amortization expense, was approximately $2,416,839. Based on an independent appraisal report, the value of the Ginkgo trees was approximately $796,286 as of March 31, 2018. As a result, the Company recorded an agricultural inventory impairment of $1,620,553 as of March 31, 2018. The difference between the recorded impairment loss and impairment balance in the above is primarily due to the exchange rate variance over years. There are no leasehold impairment expense in the three months ended June 30, 2020 and 2019.

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Farmland Assets (Details Textual)	3 Months Ended
	Mar. 31, 2018 USD ($)
Farmland Assets (Textual)
Inventory impairment	$ 1,620,553
Qianhong Agriculture’s farmland [Member]
Farmland Assets (Textual)
Amortization expense	2,416,839
Ginkgo trees [Member]
Farmland Assets (Textual)
Amortization expense	$ 796,286

XML

Long Term Refundable Deposits, Landlords (Details) - USD ($)	Jun. 30, 2020	Mar. 31, 2020
Long Term Deposits, Landlords [Abstract]
Long term deposits	$ 1,447,547	$ 1,456,384

XML

Other Noncurrent Assets (Details) - USD ($)		Jun. 30, 2020	Mar. 31, 2020
Other Assets, Noncurrent Disclosure [Abstract]
Forest land use rights	[1]	$ 985,156	$ 994,558
Others		64,028	52,205
Total		$ 1,049,184	$ 1,046,763

[1] The prepayment for lease of forest land use rights is a payment made to a local government in connection with entering into an operating land lease agreement. The land is currently used to cultivate Ginkgo trees. The forest rights certificate from the local village extends the life of the lease to January 31, 2060.

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Other Noncurrent Assets (Details 1)	Jun. 30, 2020 USD ($)
Other Assets, Noncurrent Disclosure [Abstract]
2021	$ 26,515
2022	26,515
2023	26,515
2024	26,515
2025	26,515
Thereafter	$ 852,581

XML

Other Noncurrent Assets (Details Textual) - USD ($)	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Other Noncurrent Assets (Textual)
Amortization of prepayment for lease of land use right	$ 12,441	$ 6,885
Description of lease prepayment life	Extends the life of the lease to January 31, 2060.

XML

Leases (Details)	Jun. 30, 2020 USD ($)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows paid for operating leases	$ 1,671,118
Right-of-use assets obtained in exchange for lease obligations:
Operating leases

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Leases (Details 1) - USD ($)	Jun. 30, 2020	Mar. 31, 2020
Operating leases:
Operating lease right-of-use assets	$ 19,351,247	$ 21,711,376
Current portion of operating lease liabilities	466,213	981,090
Long-term operating lease liabilities	16,917,159	$ 19,049,575
Total operating lease liabilities	$ 17,383,372
Weighted average remaining lease term, Operating leases	3 years 2 months 12 days
Weighted average discount rate, Operating leases	4.19%

XML

Leases (Details 2)	Jun. 30, 2020 USD ($)
Leases [Abstract]
2021	$ 485,355
2022	6,345,189
2023	4,510,762
2024	3,277,971
2025	1,995,568
Thereafter	2,575,035
Total lease payments	19,189,880
Less: imputed interest	(1,806,508)
Total lease liabilities	$ 17,383,372

XML

Leases (Details Textual)	3 Months Ended
	Jun. 30, 2020 USD ($)
Leases (Textual)
Operating lease cost	$ 1,671,118
Minimum [Member]
Leases (Textual)
Operating lease initial terms	3 years
Maximum [Member]
Leases (Textual)
Operating lease initial terms	10 years

XML

Intangible Assets (Details) - USD ($)		Jun. 30, 2020	Mar. 31, 2020
Acquired Finite-Lived Intangible Assets [Line Items]
Total intangible assets		$ 4,712,583	$ 4,678,631
Less: accumulated amortization		(735,234)	(667,633)
Less: impairment	[1]	(618,942)	(617,038)
Intangible assets, net		3,358,407	3,393,960
License [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Total intangible assets	[2]	2,246,880	2,220,512
Software [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Total intangible assets	[3]	1,086,366	1,083,024
Land use rights [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Total intangible assets	[4]	$ 1,379,337	$ 1,375,095

[1] In the year ended March 31, 2020, the company evaluated the licenses of insurance applicable drugstores acquired in the past based on the discounted positive cash value. Due to the stricter government insurance policy in fiscal year 2021, the value of these licenses has declined. As a result, the company recorded an impairment. There are no impairment expense in the three months ended June 30, 2020 and 2019.

[2] This represents the fair value of the licenses of insurance applicable drugstores acquired from a variety of drugstores such as Sanhao Pharmacy and several local stores. The licenses allow patients to pay by using insurance cards at stores. The stores are reimbursed from the Human Resource and Social Security Department of Hangzhou City. In 2014, the Company acquired Sanhao Pharmacy, a drugstore chain. In September 2017, the Company acquired several new stores for the purpose of the Municipal Social Medical Reimbursement Qualification Certificates. On January 9, 2020, the Company acquired a local drugstore chain. The acquired drugstores ceased their stores' business and liquidate all of the stores' accounts after Jiuzhou Pharmacy acquired them. In March 2020, the drugstore chain has dissolved and its certificates were transferred to new stores opened at the same time.

[3] These balances primarily include the SAP ERP system, the Internet Clinic Diagnosis Terminal system and the Chronic Disease Management system. In 2017, we have installed a leading ERP system, SAP from Germany. SAP is a well-known management system used by many fortune 500 companies. It is being amortized over three years since its installation. In 2020, we have installed an internet Clinic Diagnosis System used to strengthen our ability to perform online diagnosis which may increase more customer spending and a Chronic Disease Management System used to better manage and monitor our members' health. As of June 30, 2020, the SAP system has a net value of $135,698 (RMB 959,352), the internet Clinic Diagnosis System has a net value of approximately $380,313 (RMB 2,688,709), the Chronic Disease Management System has a net value of approximately $16,462 (RMB 116,379) .

[4] In July 2013, the Company purchased the land use rights of a plot of land in Lin'an, Hangzhou, intended for the establishment of an herb processing plant in the future. However, as the Company's farming business in Lin'an has not grown, the Company does not expect completion of the plant in the near future.

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Intangible Assets (Details Textual)	3 Months Ended
	Jun. 30, 2020 USD ($)	Jun. 30, 2020 CNY (¥)	Jun. 30, 2019 USD ($)	Jun. 30, 2020 CNY (¥)
Intangible Assets (Textual)
Amortization expense	$ 65,389		$ 58,466
Internet Clinic Diagnosis System [Member]
Intangible Assets (Textual)
Amortization expense	135,698
Intangible assets, net	380,313
Internet Clinic Diagnosis System [Member] | RMB [Member]
Intangible Assets (Textual)
Amortization expense | ¥		¥ 959,352
Intangible assets, net | ¥				¥ 2,688,709
Chronic Disease Costs [Member]
Intangible Assets (Textual)
Amortization expense	$ 16,462
Chronic Disease Costs [Member] | RMB [Member]
Intangible Assets (Textual)
Amortization expense | ¥		¥ 116,379

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Notes Payable (Details) - USD ($)		3 Months Ended
		Jun. 30, 2020	Mar. 31, 2020	Mar. 30, 2020
Short-term Debt [Line Items]
Notes payable	[1]	$ 26,715,374	$ 26,605,971
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 10/09/19 [Member]
Short-term Debt [Line Items]
Maturity date	[1]	Apr. 09, 2020
Notes payable	[1]		3,478,259	$ 3,478,259
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 11/06/19 [Member]
Short-term Debt [Line Items]
Maturity date	[1]	May 06, 2020
Notes payable	[1]		164,582
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 12/05/19 [Member]
Short-term Debt [Line Items]
Maturity date	[1]	Jun. 05, 2020
Notes payable	[1]		3,106,474
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 12/31/19 [Member]
Short-term Debt [Line Items]
Maturity date	[1]	Jun. 30, 2020
Notes payable	[1]
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 01/06/20 [Member]
Short-term Debt [Line Items]
Maturity date	[1]	Jul. 06, 2020
Notes payable	[1]	$ 129,856	129,457
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 02/19/20 [Member]
Short-term Debt [Line Items]
Maturity date	[1]	Aug. 19, 2020
Notes payable	[1]	$ 5,120,844	5,105,096
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 12/31/19 [Member]
Short-term Debt [Line Items]
Maturity date	[1]	Jun. 30, 2020
Notes payable	[1]		129,457
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 03/31/20 [Member]
Short-term Debt [Line Items]
Maturity date	[1]	Sep. 30, 2020
Notes payable	[1]	$ 1,697,376	1,692,156
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 04/10/20 [Member]
Short-term Debt [Line Items]
Maturity date	[1]	Oct. 10, 2020
Notes payable	[1]	$ 2,969,129
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 04/29/20 [Member]
Short-term Debt [Line Items]
Maturity date	[1]	Oct. 29, 2020
Notes payable	[1]	$ 546,874
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 05/09/20 [Member]
Short-term Debt [Line Items]
Maturity date	[1]	Nov. 09, 2020
Notes payable	[1]	$ 3,803,552
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 11/06/18 [Member]
Short-term Debt [Line Items]
Maturity date	[1]	Apr. 09, 2020
Notes payable	[1]
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 11/06/19 [Member]
Short-term Debt [Line Items]
Maturity date	[1]	May 06, 2020
Notes payable	[1]		164,582
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 12/05/19 [Member]
Short-term Debt [Line Items]
Maturity date	[1]	Jun. 05, 2020
Notes payable	[1]		3,106,474
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 06/30/20 [Member]
Short-term Debt [Line Items]
Maturity date	[1]	Dec. 30, 2020
Notes payable	[1]	$ 4,809,329
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 12/31/19 [Member]
Short-term Debt [Line Items]
Maturity date	[1]	Jun. 30, 2020
Notes payable	[1]		3,943,776
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 06/24/20 [Member]
Short-term Debt [Line Items]
Maturity date	[1]	Dec. 24, 2020
Notes payable	[1]	$ 1,405,995
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 06/30/20 [Member]
Short-term Debt [Line Items]
Maturity date	[1]	Dec. 30, 2020
Notes payable	[1]	$ 891,122
Hangzhou United Bank [Member] | Jiuxin Medicine [Member] | 03/10/20 [Member]
Short-term Debt [Line Items]
Maturity date	[1]	Sep. 10, 2020
Notes payable	[1]	$ 5,341,297	5,324,871
Hangzhou United Bank [Member] | Jiuxin Medicine [Member] | 12/26/19 [Member]
Short-term Debt [Line Items]
Maturity date	[1]	Jun. 26, 2020
Notes payable	[1]
Hangzhou United Bank [Member] | Jiuxin Medicine [Member] | 04/29/20 [Member]
Short-term Debt [Line Items]
Maturity date	[1]	Sep. 20, 2020
Notes payable	[1]		1,692,156
Hangzhou United Bank [Member] | Jiuxin Medicine [Member] | 12/26/19 [Member]
Short-term Debt [Line Items]
Maturity date	[1]	Jun. 26, 2020
Notes payable	[1]		1,371,992
Hangzhou United Bank [Member] | Jiuxin Medicine [Member] | 12/31/19 [Member]
Short-term Debt [Line Items]
Maturity date	[1]	Jun. 30, 2020
Notes payable	[1]		$ 3,943,776

[1] As of June 30, 2020, the Company had $26,715,374 (RMB 188,870,639) of notes payable from HUB. The Company is required to hold restricted cash in the amount of $14,913,825 (RMB 105,684,113) with HUB as collateral against these bank notes. Included in the restricted cash is a total of $8,770,422 three-year deposit (RMB 62,150,000) deposited into HUB as a collateral for current and future notes payable from HUB. As of March 31, 2020, the Company had $26,605,971 (RMB 188,677,437) of notes payable from HUB. The Company is required to hold restricted cash in the amount of $14,596,179 (RMB 103,509,456) with HUB as collateral against these bank notes. Included in the restricted cash is a total of $8,763,958 three-year deposit (RMB 62,150,000) deposited into HUB as a collateral for current and future notes payable from HUB.

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Notes Payable (Details Textual)	3 Months Ended
	Jun. 30, 2020 USD ($)	Jun. 30, 2020 CNY (¥)	Mar. 31, 2020 USD ($)	Mar. 31, 2020 CNY (¥)
Notes Payable (Textual)
Notes payable	$ 26,720,000
Restricted cash	6,140,000
Line of credit total	27,460,000
Bank credit line facilities available for borrowing	$ 740,000
Term of deposit	3 years
Deposit amount	$ 8,770,000
Hangzhou United Bank One [Member] | Notes Payable to Banks [Member]
Notes Payable (Textual)
Restricted cash	$ 8,770,422		$ 8,763,958
Term of deposit	3 years
Hangzhou United Bank One [Member] | Notes Payable to Banks [Member] | RMB [Member]
Notes Payable (Textual)
Restricted cash | ¥		¥ 62,150,000		¥ 62,150,000
Hangzhou United Bank [Member]
Notes Payable (Textual)
Bank credit line facilities available for borrowing	$ 12,550,000
Hangzhou United Bank [Member] | Notes Payable to Banks [Member]
Notes Payable (Textual)
Notes payable	26,715,374		26,605,971
Restricted cash	$ 14,913,825		$ 14,596,179
Hangzhou United Bank [Member] | Notes Payable to Banks [Member] | RMB [Member]
Notes Payable (Textual)
Notes payable | ¥		188,870,639		188,677,437
Restricted cash | ¥		¥ 105,684,113		¥ 103,509,456

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Loan Payable (Details) - USD ($)	3 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Dec. 11, 2019	Aug. 02, 2019
Loan Payable (Textual)
Borrowing amount			$ 6,460,290	$ 717,810
Remaining loan balance	$ 5,851,778
Monthly repayment due	$ 2,300,271	$ 2,287,742
Refundable loan received amount			$ 5,878,864	$ 617,317

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Taxes (Details) - USD ($)	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Taxes (Textual)
Effective tax rate	(17.40%)	(0.40%)
Unrecognized tax benefits	$ 0

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Postretirement Benefits (Details) - USD ($)	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Employee Social Benefits (Textual)
Employment benefits and pension contribution	$ 204,538	$ 341,024

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Related Party Transactions and Arrangements (Details) - USD ($)		Jun. 30, 2020	Mar. 31, 2020
Due to a director and CEO [Member]
Related Party Transaction [Line Items]
Total	[1]	$ 491,300	$ 490,218

[1] Due to foreign exchange restrictions, the Company's director and CEO, 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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Related Party Transactions and Arrangements (Details Textual)	1 Months Ended		3 Months Ended
	Apr. 28, 2018 USD ($)	Apr. 28, 2018 CNY (¥)	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)
Chief Executive Officer [Member]
Related Party Transactions and Arrangements (Textual)
Lease expiration date			Sep. 30, 2020
Rent expenses			$ 6,532	$ 6,785
Ownership percentage	51.00%	51.00%
Hangzhou Kangzhou Biotech [Member]
Related Party Transactions and Arrangements (Textual)
Total proceeds	$ 75,643
Sale of percentage	10.00%	10.00%
Hangzhou Kangzhou Biotech [Member] | CNY [Member]
Related Party Transactions and Arrangements (Textual)
Total proceeds | ¥		¥ 507,760

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Warrants (Details) - Common Stock Warrants [Member] - $ / shares	3 Months Ended	12 Months Ended
	Jun. 30, 2020	Mar. 31, 2020
Class of Warrant or Right [Line Items]
Stock price	$ 1.44	$ 1.77
Exercise price	$ 3.10	$ 3.10
Annual dividend yield
Expected term (years)	6 months 21 days	9 months 22 days
Risk-free interest rate	0.18%	0.71%
Expected volatility	98.86%	62.08%

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Warrants (Details Textual) - USD ($)	1 Months Ended	3 Months Ended		12 Months Ended
	Jul. 19, 2015	Jun. 30, 2020	Jun. 30, 2019	Mar. 31, 2020	Mar. 31, 2019	Jun. 01, 2020
Warrants (Textual)
Fair value estimation method		Binominal pricing model
Stock purchase price per share (in dollars per share)						$ 3.10
Purchase of warrants investors		647,000		672,000
Purchase option and warrants liability		$ 68,980		$ 64,090
Exercise of warrants						25,000
Warrant [Member]
Warrants (Textual)
Stock purchase price per share (in dollars per share)	$ 3.10					$ 3.10
Warrants exercisable date	Jan. 19, 2016
Maturity date	Jan. 18, 2021
Purchase of warrants investors	600,000
Fair value of warrant liability investor placement agent		$ 68,980
Issuance of warrants to placement agent		72,000
Percentage of stock sold in offering		6.00%
Change in fair value of warrants liability		$ 4,890	$ 403,555
Exercise of warrants		647,000				25,000

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Employee Deposits (Details)	Jun. 30, 2020 USD ($)	Jun. 30, 2020 CNY (¥)	Mar. 31, 2020 USD ($)	Mar. 31, 2020 CNY (¥)
Financial Liability (Textual)
Reclassifies deposits financial liability | $	$ 14,145		$ 70,507
RMB [Member]
Financial Liability (Textual)
Reclassifies deposits financial liability | ¥		¥ 100,000		¥ 500,000

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Stockholder's Equity (Details)			1 Months Ended	3 Months Ended
	Jun. 03, 2020 $ / shares shares	Nov. 18, 2014 Individuals $ / shares shares	Apr. 15, 2019 USD ($) $ / shares shares	Jun. 30, 2020 shares	Jun. 01, 2020 $ / shares shares	Mar. 31, 2020 shares
Stockholder's Equity (Textual)
Reserve fund percentage				50.00%
Statutory accounts percentage				10.00%
Exercise of warrants					25,000
Warrants per share | $ / shares					$ 3.10
Issued of common stock				37,961,790	25,000	32,936,786
Stockholder's equity, description	The Company closed a registered direct offering of 5,000,004 shares of common stock at $2.00 per share with gross proceeds of $10,000,008 from its effective shelf registration statement.
Common Stock [Member]
Stockholder's Equity (Textual)
Exercise price of stock option | $ / shares	$ 2.57		$ 3.125
Warrants to purchase	300,000		240,000
Common Stock [Member] | Investor [Member]
Stockholder's Equity (Textual)
Common stock, par value | $ / shares			$ 2.50
Proceeds from private placement | $			$ 10,000,020
Warrants to purchase			4,000,008
Purchase price per share | $ / shares			$ 2.20
Common Stock [Member] | Investor [Member]
Stockholder's Equity (Textual)
Warrants to purchase	3,750,003		3,000,006
Aggregate purchase of number of shares	6.50%		6.00%
Employee Stock Option [Member]
Stockholder's Equity (Textual)
Number of granted shares		967,000
Number of directors, officers and employees in a group | Individuals		46
Exercise price of stock option | $ / shares		$ 2.50
Period for options exercisable from the vesting date		5 years
Maturity date		Nov. 17, 2022

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Loss Per Share (Details) - USD ($)	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
LOSS PER SHARES:
Net loss attributable to controlling interest	$ (231,509)	$ (2,134,951)
Weighted average shares used in basic computation	34,428,271	32,453,269
Diluted effect of stock options and warrants
Weighted average shares used in diluted computation	34,428,271	32,453,269
Loss per share – Basic:
Net loss attributable to controlling interest	$ (0.01)	$ (0.07)
Loss per share – Diluted:
Net loss attributable to controlling interest	$ (0.01)	$ (0.07)

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Loss Per Share (Details Textual) - Employee Stock Option [Member]	3 Months Ended
	Jun. 30, 2020 shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from calculation of diluted earnings per share	967,000
Private Placement [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from calculation of diluted earnings per share	72,000
Investor [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from calculation of diluted earnings per share	575,000

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Segments (Details) - USD ($)	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Revenue	$ 31,054,312	$ 25,280,784
Cost of goods	23,074,093	19,219,346
Gross profit	7,980,219	6,061,438
Selling expenses	6,272,407	5,968,551
General and administrative expenses	2,120,166	2,851,612
Loss from operations	(412,354)	(2,758,725)
Depreciation and amortization	760,540	512,949
Total capital expenditures	169,807	753,173
Retail drugstores [Member]
Revenue	18,810,474	16,734,988
Cost of goods	12,402,182	11,682,721
Gross profit	6,408,292	5,052,267
Selling expenses	4,977,047	4,835,666
General and administrative expenses	1,128,083	1,733,704
Loss from operations	303,162	(1,517,103)
Depreciation and amortization	750,498	504,463
Total capital expenditures	169,807	753,173
Online Pharmacy [Member]
Revenue	4,912,834	2,443,605
Cost of goods	4,228,411	2,096,850
Gross profit	684,423	346,755
Selling expenses	704,876	473,380
General and administrative expenses	59,011	55,123
Loss from operations	(79,464)	(181,748)
Depreciation and amortization
Total capital expenditures
Drug Wholesale [Member]
Revenue	7,331,004	6,102,191
Cost of goods	6,443,500	5,439,775
Gross profit	887,504	662,416
Selling expenses	590,484	659,505
General and administrative expenses	933,072	1,062,785
Loss from operations	(636,052)	(1,059,874)
Depreciation and amortization	10,042	8,486
Herbs Farming [Member]
Revenue
Cost of goods
Gross profit
Selling expenses
General and administrative expenses
Loss from operations
Depreciation and amortization
Total capital expenditures

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Segments (Details 1) - USD ($)	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Net revenue from external customers	$ 31,054,312	$ 25,280,784
Retail Drugstores [Member]
Net revenue from external customers	7,331,004	6,102,191
Retail Drugstores [Member] | Prescription Drugs [Member]
Net revenue from external customers	7,406,774	5,695,286
Retail Drugstores [Member] | OTC Drugs [Member]
Net revenue from external customers	6,818,484	7,240,228
Retail Drugstores [Member] | Nutritional Supplements [Member]
Net revenue from external customers	1,347,769	1,231,133
Retail Drugstores [Member] | TCM [Member]
Net revenue from external customers	949,012	1,104,050
Retail Drugstores [Member] | Sundry Products [Member]
Net revenue from external customers	422,551	298,198
Retail Drugstores [Member] | Medical Devices [Member]
Net revenue from external customers	1,865,884	1,166,093
Online Pharmacy [Member]
Net revenue from external customers	4,912,834	2,443,605
Online Pharmacy [Member] | Prescription Drugs [Member]
Net revenue from external customers	1,869,643
Online Pharmacy [Member] | OTC Drugs [Member]
Net revenue from external customers	1,322,811	1,024,602
Online Pharmacy [Member] | Nutritional Supplements [Member]
Net revenue from external customers	221,031	107,194
Online Pharmacy [Member] | TCM [Member]
Net revenue from external customers	23,199	13,681
Online Pharmacy [Member] | Sundry Products [Member]
Net revenue from external customers	546,720	438,736
Online Pharmacy [Member] | Medical Devices [Member]
Net revenue from external customers	929,430	859,392
Wholesale [Member]
Net revenue from external customers	7,331,004	6,102,191
Wholesale [Member] | Prescription Drugs [Member]
Net revenue from external customers	5,966,148	4,880,491
Wholesale [Member] | OTC Drugs [Member]
Net revenue from external customers	915,146	1,074,261
Wholesale [Member] | Nutritional Supplements [Member]
Net revenue from external customers	59,841	21,691
Wholesale [Member] | TCM [Member]
Net revenue from external customers	28,967	98,828
Wholesale [Member] | Sundry Products [Member]
Net revenue from external customers	2,597	5,682
Wholesale [Member] | Medical Devices [Member]
Net revenue from external customers	$ 358,305	$ 21,238

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Segments (Details Textual)	3 Months Ended
	Jun. 30, 2020 Segment
Segments (Textual)
Number of operating segments	4