6-K 1 ea171959-6k_chinajo.htm REPORT OF FOREIGN PRIVATE ISSUER

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER 
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934

 

For the month of January, 2023

 

Commission File Number: 001-40724

 

CHINA JO-JO DRUGSTORES, INC. 

(Translation of registrant’s name into English)

 

Hai Wai Hai Tongxin Mansion Floor 6, Gong Shu District,

Hangzhou City, Zhejiang Province, People’s Republic of China, 310008
(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: Form 20-F ☒ Form 40-F ☐

 

 

 

 

 

 

China Jo-Jo Drugstores, Inc., a Cayman Islands company (the “Company”) furnishes under the cover of Form 6-K the following:

 

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2022

 

    Page
Financial Statements   1
Unaudited condensed consolidated balance sheets as of September 30, 2022 and March 31, 2022   1
Unaudited condensed consolidated statements of operations and comprehensive income (loss) for the six months ended September 30, 2022 and 2021   2
Unaudited condensed consolidated statements of changes in shareholders’ equity for the six months ended September 30, 2022 and 2021   3
Unaudited condensed consolidated statements of cash flows for the six months ended September 30, 2022 and 2021   4
Management’s Discussion and Analysis of Financial Condition and Results of Operations   5

 

i

 

 

FINANCIAL STATEMENTS

 

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES 

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

   September 30,   March 31, 
   2022   2022 
ASSETS        
CURRENT ASSETS        
Cash and cash equivalents  $14,138,465   $18,458,575 
Restricted cash   15,313,595    16,881,002 
Financial assets available for sale   84,355    94,648 
Notes receivable   223,366    - 
Trade accounts receivable   17,955,258    16,736,495 
Inventories   17,200,682    16,020,140 
Other receivables, net   5,762,464    5,764,660 
Advances to suppliers   382,620    571,577 
Other current assets   1,002,569    924,797 
Total current assets   72,063,374    75,451,894 
           
PROPERTY AND EQUIPMENT, net   5,082,518    5,922,179 
           
OTHER ASSETS          
Long-term investment   3,936,565    4,416,891 
Farmland assets   643,737    722,283 
Long term deposits   1,513,216    1,761,945 
Other noncurrent assets   754,580    822,950 
Operating lease right-of-use assets   14,653,545    13,738,081 
Intangible assets, net   3,118,146    3,547,986 
Total other assets   24,619,789    25,010,136 
           
Total assets  $101,765,681   $106,384,209 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
CURRENT LIABILITIES          
Accounts payable, trade   29,257,860    27,331,381 
Notes payable   27,589,151    34,189,022 
Other payables   3,482,678    2,268,967 
Other payables - related parties   1,356,801    1,561,244 
Customer deposits   1,367,751    1,873,062 
Taxes payable   2,073,685    1,381,108 
Accrued liabilities   634,976    556,037 
Long-term loan payable-current portion   536,081    1,957,956 
Current portion of operating lease liabilities   5,062,847    3,329,619 
Total current liabilities   71,361,830    74,448,396 
           
Long-term loan payable   -    - 
Long-term operating lease liabilities   8,471,257    9,197,027 
Total liabilities   79,833,087    83,645,423 
           
COMMITMENTS AND CONTINGENCIES          
           
STOCKHOLDERS’ EQUITY          
Ordinary share; $0.012 par value; 500,000,000 shares authorized; 5,337,360 and 3,479,316 shares issued and outstanding as of September 30, 2022 and March 31, 2022   64,049    41,752 
Preferred share; $0.001 par value; 10,000,000 shares authorized; nil issued and outstanding as of September 30, 2022 and March 31, 2022   -    - 
Additional paid-in capital   69,710,736    66,516,033 
Statutory reserves   1,309,109    1,309,109 
Accumulated deficit   (48,729,274)   (48,134,493)
Accumulated other comprehensive income   924,834    4,352,992 
Total shareholders’ equity   23,279,454    24,085,393 
Noncontrolling interests   (1,346,860)   (1,346,607)
Total equity   21,932,594    22,738,786 
Total liabilities and shareholders’ equity  $101,765,681   $106,384,209 

 

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 INCOME (LOSS)

(UNAUDITED)

 

   For the six months ended
September 30,		 
   2022   2021 
REVENUES, NET  $72,722,085   $78,484,478 
           
COST OF GOODS SOLD   55,801,399    63,085,681 
           
GROSS PROFIT   16,920,686    15,398,797 
           
SELLING EXPENSES   14,530,119    13,292,931 
GENERAL AND ADMINISTRATIVE EXPENSES   3,635,251    2,598,175 
TOTAL OPERATING EXPENSES   18,165,370    15,891,106 
           
LOSS FROM OPERATIONS   (1,244,684)   (492,309)
           
OTHER INCOME (EXPENSE):          
INTEREST INCOME   145,107    110,291 
INTEREST EXPENSE   (60,365)   (156,786)
OTHER   1,003,696    274,883 
           
LOSS BEFORE INCOME TAXES   (156,246)   (263,921)
           
PROVISION FOR INCOME TAXES   438,788    3,927 
           
NET LOSS   (595,034)   (267,848)
           
LESS: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST   (253)   (5,105)
           
NET LOSS ATTRIBUTABLE TO CHINA JO-JO DRUGSTORES, INC.   (594,781)   (262,743)
           
OTHER COMPREHENSIVE LOSS          
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS   (3,428,158)   228,568 
           
COMPREHENSIVE LOSS   (4,023,192)   (39,280)
           
WEIGHTED AVERAGE NUMBER OF SHARES:          
Basic   4,534,047    3,479,316 
Diluted   4,534,047    3,479,316 
           
LOSS PER SHARES:          
Basic  $(0.13)  $(0.08)
Diluted  $(0.13)  $(0.08)

  

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 SHAREHOLDERS’ EQUITY

(UNAUDITED)

 

   Ordinary Share   Additional   Retained Earnins   Accumulated
other		   Non-     
   Number of       Paid-in   Statutory   Accumulated   comprehensive   controlling     
   shares   Amount   capital   reserves   deficit   income/(loss)   interest   Total 
BALANCE, March 31, 2021.   3,479,316    41,752    66,516,033    1,309,109    (44,942,374)   2,818,185    (1,340,360)   24,402,345 
Net loss   -    -    -    -    (262,743)   -    (5,105)   (267,848)
Foreign currency translation gain   -    -    -    -    -    228,568         228,568 
BALANCE, September 30, 2021.   3,479,316    41,752    66,516,033    1,309,109    (45,205,117)   3,046,753    (1,345,465)   24,363,065 
                                         
BALANCE, March 31, 2022.   3,479,316    41,752    66,516,033    1,309,109    (48,134,493)   4,352,992    (1,346,607)   22,738,786 
                                         
Issuance of incentive ordinary share award   850,000    10,200    1,706,800    -    -    -    -    1,717,000 
Sale of shares and warrants   1,000,000    12,000    1,488,000    -    -    -    -    1,500,000 
Fractional shares issued for reverse stock split   8,044    97    (97)   -    -    -    -    - 
Net loss   -    -    -    -    (594,781)   -    (253)   (595,034)
Foreign currency translation loss   -    -    -    -    -    (3,428,158)        (3,428,158)
BALANCE, September 30, 2022.   5,337,360    64,049    69,710,736    1,309,109    (48,729,274)   924,834    (1,346,860)   21,932,594 

 

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 six months ended
September 30,		 
   2022   2021 
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net income (loss)  $(595,034)  $(267,848)
Adjustments to reconcile net income to net cash provided by operating activities:          
Bad debt direct write-off and provision   (753,494)   (159,978)
Depreciation and amortization   630,533    672,825 
Stock based compensation   1,717,000    - 
Accounts receivable, trade   (1,662,260)   (442,229)
Notes receivable   (236,163)   (57,097)
Inventories and biological assets   (3,090,129)   (197,928)
Other receivables   (1,408,534)   (695,832)
Advances to suppliers   35,530    (2,487,104)
Other current assets   (230,581)   (94,153)
Long term deposit   60,394    (109,694)
Other noncurrent assets   (22,334)   35,787 
Accounts payable, trade   5,179,339    2,449,608 
Other payables and accrued liabilities   861,324    1,055,417 
Customer deposits   (318,899)   477,331 
Taxes payable   891,050    318,214 
           
Net cash provided by operating activities   1,057,742    497,319 
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Acquisition of equipment   (25,633)   (73,471)
Purchases of intangible assets   -    (6,962)
Additions to leasehold improvements   (57,788)   (105,638)
Net cash used in investing activities   (83,421)   (186,071)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Repayment from short-term bank loan   -    (773,500)
Repayment of  third parties loan   (1,278,211)   (1,285,484)
Proceeds from notes payable   29,169,681    31,258,674 
Repayment of notes payable   (32,216,676)   (26,041,718)
Proceeds from sale of shares and warrants   1,500,000    - 
Repayment of other payables-related parties   (158,409)   269,994 
Net cash provided by (used in) financing activities   (2,983,615)   3,427,966 
           
EFFECT OF EXCHANGE RATE ON CASH   (3,211,290)   775,500 
           
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH   (5,887,517)   4,514,714 
           
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period   35,339,577    34,672,644 
           
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, end of period  $29,452,060   $39,187,358 
           
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:          
Cash paid for interest   60,365    156,786 
Cash paid for income taxes  $64,844   $3,927 

  

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

 

4

 

 

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 20-F for the year ended March 31, 2022 and filed with the SEC on July 28, 2022. 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 September 30, 2022, we had 111 pharmacies in Hangzhou city under the store brand of “Jiuzhou Grand 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 six months ended September 30, 2022.

 

Amidst COVID-19 outbreak, we experienced a decline in the number of customer visits. To avoid face-to-face contact, customers tend to shop online. In order to keep pace with customers’ change in their ways of shopping, we strengthened our O2O service team, which takes orders online, i.e. via mobile phone app, and delivers products to local community from our stores. The spread of the disease has been effectively controlled in China in the past few months. The number of the new daily cases has become limited. As a matter of fact, compared with 2021, the decline in the number of customer visits has been limited. In December 2022, the local government has eased its control and the spread of COVID-Type Omicron has become very quick. As a result, the demand on medical products surged. After the majority of local people has overcome Omicron, the life of local people recover to normal. As a result, we believe the negative impacts on our operations are temporary.

 

5

 

 

Results of Operations

 

Comparison of the six months ended September 30, 2022 and 2021

 

The following table summarizes our results of operations for the six months ended September 30, 2022 and 2021:

 

   Six months ended September 30, 
   2022   2021 
   Amount   Percentage
of total
revenue		   Amount   Percentage
of total
revenue		 
Revenue  $72,722,085    100.0%  $78,484,478    100.0%
Gross profit  $16,920,686    23.3%  $15,398,797    19.6%
Selling expenses  $14,530,119    20.0%  $13,292,931    16.9%
General and administrative expenses  $3,635,251    5.0%  $2,598,175    3.3%
Loss from operations  $(1,244,684)   (1.7)%  $(492,309)   (0.6)%
Other Income(expense), net  $1,088,438    1.5%  $228,388    0.3%
Income tax expense  $438,788    0.6%  $3,927    0.0%
Net income (loss)  $(595,034)   (0.8)%  $(267,848)   (0.3)%

 

Revenue

 

Primarily due to the reduction in our wholesale business, revenue decreased by $5,762,393 or 7.3% for the six months ended September 30, 2022, as compared to the six months ended September 30, 2021.

 

Revenue by Segment

 

The following table breaks down the revenue of our four business segments for the six months ended September 30, 2022 and 2021:

 

   For the six months ended September 30,         
   2022   2021         
   Amount   % of total
revenue		   Amount   % of total
revenue		   Variance by
amount		   % of
change		 
Revenue from retail drugstores  $43,268,644    59.5%  $40,416,994    51.5%  $2,851,650    7.1%
Revenue from online sales   14,049,317    19.3%   13,701,308    17.5%   348,009    2.5%
Revenue from wholesale business   15,404,124    21.2%   24,366,176    31.0%   (8,962,052)   (36.8)%
Revenue from farming business   -    -%   -    -%   -    -%
Total revenue  $72,722,085    100.0%  $78,484,478    100.0%  $(5,762,393)   (7.3)%

 

Retail drugstores sales, which accounted for approximately 59.5% of total revenue for the six months ended September 30, 2022, increased by $2,851,650, or 7.1% compared to the six months ended September 30, 2021, to $43,268,644. However, excluding the impact of exchange rate fluctuation, the actual retail drugstores sales increased 11.7%. Same-store sales increased by approximately $2,615,231, or 6.7%, while new stores contributed approximately $248,138 in revenue in the six months ended September 30, 2022.

 

6

 

 

The actual increase in our retail drugstore sales is primarily due to continuous efforts in promoting non-NHSA covered products, close cooperation with major suppliers, and contribution from the new store sales.

 

Due to stricter budget control on medical reimbursement program from local National Healthcare Security Administration (“NHSA”) and competitive market condition, we spent significant efforts in selecting and replacing our merchandises at stores. To minimize the effect from local NHSA’s budget control, we expand the categories of our merchandises . As a result, we were able to depend less on the medical reimbursement program and increase our cash sales.

 

In addition, to better compete with our competitors, we have been closely working with our suppliers to conduct a series of market promotions in local communities. As a major player in local retail pharmaceutical market, our stores are densely located in major communities in Hangzhou City. As a prime local sales network, we were able to attract large pharmaceutical manufacturers to support us in performing a series of sale campaigns, in which large manufacturers provide ads, prices cutback and specialists supports. As a result, our sales were able to increase slightly although NHSA has tightened its budget.

 

Our new store has also contributed additional sales. Our store count is 111 at September 30, 2022 and 110 at September 30, 2021.

 

Our online pharmacy sales increased by approximately $348,009, or 2.5% for the six months ended September 30, 2022, as compared to the six months ended September 30, 2021. The increase was primarily caused by an increase in sales of pharmaceutical products such as prescription drugs via e-commerce platforms such as Tmall, partially offset by a decrease in the sales via our official website.

 

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. We have been focusing on promoting the sale of the prescription drugs. As a result, the sale of prescription drugs was $5,309,491 in the six months ended September 30, 2022 as compared to $4,934,314 in the six months ended September 30, 2021.

 

The sales via our official website were primarily made by certain pharmacy benefit management providers and insurance companies. For example, we have signed a service contract with Yingda Taihe Life Insurance Co. Ltd. (“Yingda”), a national insurance company. Certain companies bought private health insurances from Yingda for their employees. By linking our online pharmacy platform with Yingda and educating these employees, they are able to buy health products on our online stores. The sales from these customers contributed significantly to our official website sales. In the six months ended September 30, 2022, due to strict control on COVID spread, travels to visit and develop these companies have been limited. As a result, certain sales to these customers have been retarded and our official website sales decreased.

 

Wholesale revenue decreased by $8,962,052 or 36.8%. Hospitals are still the dominant drug distributors 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. As a relatively small wholesale distributor in Pharmaceutical products, our sales are subject to significant variance due to experienced salesperson efforts. In the six months ended September 30, 2022, several experienced salespersons left the company and we were unable to replace them with equivalent staffs. As a result, the wholesale revenue declined.

 

In the six months ended September 30, 2022 and 2021, we have not generated revenue from our farming business. We planted ginkgo and maidenhair trees during the year ended March 31, 2013, more than nine years ago. A ginkgo tree may have a growth period of up to twenty years before it is mature enough for harvest. Usually, the longer it grows the more valuable it becomes. We plan to continue cultivating the trees in order to maximize their market value in the future.

 

7

 

 

Gross Profit

 

Gross profit increased by $1,521,889 or 9.9% period over period primarily as a result of an increase in gross profit provided by retail drugstores, which increased significantly in the six months ended September 30, 2022. At the same time, gross margin increased from 19.6% to 23.3%. The average gross margins for each of our four business segments are as follows:

 

   For the six months ended
September 30,		 
   2022   2021 
Average gross margin for retail drugstores   31.7%   28.5%
Average gross margin for online sales   10.9%   10.3%
Average gross margin for wholesale business   10.8%   10.1%
Average gross margin for farming business   N/A    N/A 

 

Retail gross margins increased primarily because we introduced certain popular products with high profit margin and lowered the sale percentile of DTC (Direct-to-Customer) products. In order to promote our sales and profits, we specifically selected a series of popular products, which we believe are suitable to local community. By artfully selecting various products, we were able to both increase the sales of high-profit margin products and attract customers. For example, a customer usually orders a brand therapeutic drug which has low profit margin, but in order to better recover, he or she needs auxiliary medicines and health care products, which may have higher profit margin. By recommending and soliciting appropriate auxiliary medicines and health care products, we are able to add our sales volume and profit margin.

 

Additionally, DTC products are usually prescription drugs prescribed by the hospital doctors. In order to attract more customers to our stores, we introduced certain DTC products into our stores, However, due to their low profit margin, we have controlled their sales in the six months ended September 30, 2022. As a result, we were able to keep up with our sales profit margin.

 

Gross margin of online pharmacy sales increased primarily due to selection of high-profit margin products. 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. In order to promote our profit margin, we selected products with higher profits margin and marketed these products to our customers. As a result, our profit margin for online sales slightly increased.

 

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.

 

Selling and Marketing Expenses

 

Selling and marketing expenses increased by $1,237,188, or 9.3%, as compared to the same period of last fiscal year, primarily due to an increase in expense related to Nucleic Acid Amplification Tests (“NAAT”) requested by local government and an increase in service fee from third-party platforms. In respond to the local government, we set up NAAT outposts adjacent to our stores. We subsidized our staff with each test they performed. As a result, we incurred approximately $430,231 expense. As our online pharmacy sales increased in the six months ended September 30, 2022 as compared to the same period last year, We incurred additional 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 $656,808 period over period. Overall, such expenses as a percentage of our revenue were 20.0% and 16.9% respectively, in the six months ended September 30, 2022 and 2021.

 

8

 

 

General and Administrative Expenses

 

General and administrative expenses increased by $1,037,076, or 39.9%, as compared to the same period of last year, primarily due to the increase in equity-based compensation, offset by a decrease in bad debt expense. In April 2022, we issued a total of 850,000 ordinary shares and recorded equity-based compensation of approximately $1.7 million. On the other side, in the six months ended September 30, 2022, we recorded the reduction in the allowance for bad debts of $0.8 million as compared to reduction in the allowance for bad debts of $0.2 million in the six months ended September 30, 2021. As a result, the bad debt expense decreased by approximately $0.6 million. Such expenses as a percentage of revenue increased to 5.0% from 3.3% for the same period of last year.

 

Loss from Operations

 

As a result of the above, we had loss from operations of $1,244,684 in the six months ended September 30, 2022, as compared to loss from operations of $492,309 a year ago. Our operating margin for the six months ended September 30, 2022 and 2021 was (1.7)% and (0.6)%, respectively.

 

Income Taxes

 

Our income tax expense increased by $434,861 period over period due to an increase in overall profit.

 

Net Income(Loss)

 

As a result of the foregoing, net loss is $595,034 in the six months ended September 30, 2022 as compared to a net loss of $267,848 in the six months ended September 30, 2021.

 

Liquidity and Capital Resources

 

Our cash flows for the periods indicated are as follows:

 

   For the six months ended
September 30,		 
   2022   2021 
Net cash provided by operating activities  $1,057,742   $497,319 
Net cash used in investing activities  $(83,421)  $(186,071)
Net cash (used in) provided by financing activities  $(2,983,615)  $3,427,966 

 

For the six months ended September 30, 2022, cash provided by operating activities amounted to $1,057,742, as compared to $497,319 for the same period a year ago. The change is primarily attributable to an increase of $2,522,634 in advances to suppliers, and an increase in accounts payable of $2,729,731 offset by a decrease in inventories and biological assets of $2,892,201, a decrease in accounts receivable of $1,220,031, and a decrease in customer deposits of $796,230.

 

For the six months ended September 30, 2022, net cash used in investing activities amounted to $83,421, as compared to $186,071 used in investing activities for the same period a year ago. The change is primarily attributable to an increase in acquisition of equipment of $47,838 and an increase in additions to leasehold improvements of $47,850.

 

For the six months ended September 30, 2022, net cash used in financing activities amounted to $2,983,615, as compared to $3,427,966 net cash provided by financing activities for the same period a year ago. The decrease is primarily due to repayment of notes payable, proceeds from notes payable offset by proceeds from equity and debt financing.

 

As of September 30, 2022, we had cash of approximately $29,452,060. Our total current assets as of September 30, 2022, were $72,063,374 and total current liabilities were $71,361,830, which resulted in a working capital of $701,544.

 

 

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