GlobeNewswire Inc | May 24, 2021 08:00AM EDT

May 24, 2021

NEW YORK, May 24, 2021 (GLOBE NEWSWIRE) -- BOQI International Medical Inc. (NASDAQ: BIMI) (BIMI or the Company), a leading healthcare products and services provider in China, today announced its financial results for the first quarter ended March 31, 2021.

First Quarter 2021 Financial Highlights

-- Revenues grew by $1.75 million, or by 423%, to $2.17 million for the first quarter of 2021 from $0.41 million in the same period of 2020.

-- Gross profit increased by $0.51 million, or by 620%, to $0.59 million for the first quarter 2021 from $0.08 million in the same period of 2020.

-- Gross margin increased to 27.32% for the first quarter 2021 from 19.84% in the same period of 2020.



For three months ended March 31 Differences %due to 2021 2020 change roundingRevenues $ 2.17million $ 0.41million 423 %Gross profit $ 0.59million $ 0.08million 620 %Gross margin 27.32 % 19.85 % 7.47 %Net loss fromcontinuing $ 3.29 million $ 1.35 million 144 %operationsNet lossattributableto BOQI $ 3.33 million $ 2.19 million 52 %InternationalMedical Inc.

Mr. Tiewei Song, Chief Executive Officer and President of the Company, commented: We are pleased to see both of our revenues and gross margins continued to be boosted by our expanded business operations and enhanced efficiency during the first quarter of 2021. These improvements support our strategy to build a comprehensive healthcare ecosystem in China with a focus on a high-end gynecology-focused hospital chain through both organic growth and bolt-on acquisition opportunities. We intend to maintain this momentum in order to achieve sustainable profitability and create value for our shareholders.

Revenues

Revenues for the three months ended March 31, 2021 and 2020 were $2.17 million and $0.41 million, respectively. Compared with the same period in 2020, revenue in the 2021 period increased by $1.75 million, or 423%, mainly due to the increase in sales of wholesale pharmaceuticals of $1.10 million and medical services of $0.70 million.

Revenues from the retail pharmacy segment for the three months ended March 31, 2021 was $0.12 million, generated from 5 retail pharmacy stores in Chongqing.

Revenues from wholesale medical devices segment for the three months ended March 31, 2021 and 2020 were $0.06 million and $0.25 million, respectively. The decrease is mainly due to low demand for medical devices during the first quarter, which is typical because of the long break during the Chinese New Year.

Cost of revenues

Cost of revenues for the three months ended March 31, 2021 and 2020 was $1.58 million and $0.33 million, respectively. The Company recorded an obsolescence loss of $0.03 million with respect to inventories, which was included in the cost of revenues for the three months ended March 31, 2021 compared with an obsolescence loss of $0.30 million for the same period in 2020. The decrease of inventory provision is due to the obsolescence of inventory held for sale by the Boqi pharmacies in Dalian, whose stores suffered from the lockdown policy in effect due to the COVID-19 pandemic.

Gross profit

Gross profit for the three months ended March 31, 2021 and 2020 was $0.59 million and $0.08 million, respectively. For the three months ended March 31, 2021 and 2020, we had a gross margin of 27.32% and 19.85%, respectively. For the three months ended March 31, 2021 and 2020, the gross profit margin of our: (i) retail pharmacy segment were 17.17% in 2021; (ii) wholesale medical devices segment were 52.73% and 19.73%, respectively; (iii) wholesale pharmaceuticals segments were 36.21% and 19.99%, respectively; and (iv) medical services segment was 9.32% for the three months ended March 31, 2021.

Operating expenses

Operating expenses from continuing operations were $3.83 million for the three months ended March 31, 2021 as compared to $1.41 million for the same period in 2020, an increase of $2.43 million or 173%. The increase is primarily attributable to the inclusion of the operating expenses of the medical services segment of appropriately $0.32 million and the Chongqing Guanzan Technology Co., Ltd. (Guanzan Group) of approximately $0.51 million, which we acquired in March 2020, and the amortization of the discount relating to the convertible notes issued in 2021 of $1.61 million, and general operating expenses which primarily include legal expenses of $0.28 million and audit fee of $0.15 million and other compliance expense.

Other expenses

For the three months ended March 31, 2021 and 2020, we reported other expenses of $0.03 million and $0.02 million, respectively. Other expenses mainly consisted of interest expense relating to the bank loans of the Guanzan Group, Chongqing Guoyitang Hospital Co., Ltd. (Guoyitang) and Chaohu Zhongshan Minimally Invasive Hospital (Zhongshan). The Company completed the acquisitions of Guoyitang and Zhongshan in February, 2021.

Net loss from continuing operation

Net loss from continuing operations was $3.29 million and $1.35 million for the three months ended March 31, 2021 and 2020, respectively. The increase was primarily due to the increase in operating expenses and the other expenses described above.

Net loss attributable to BOQI International Medical Inc.

As a result of the foregoing our net loss attributable to BOQI International Medical Inc. increased by $1.14 million to $3.33 million for the three months ended March 31, 2021 from $2.19 million for the three months ended March 31, 2020.

Cash and working capital

As of March 31, 2021, we had cash of $2.84 million and negative working capital of $0.18 million as compared to cash of $0.14 million and working capital of $9.62 million as of December 31, 2020.

About BOQI International Medical Inc.

BOQI International Medical Inc. was founded in 2006. In February 2019, the Board of Directors of the Company determined to focus on the healthcare industry. The Company is now exclusively a healthcare products and provider, offering a broad range of healthcare products and related services and operates two private hospitals. For more information, please visit www.usbimi.com.

Safe Harbor Statement

Certain matters discussed in this news release are forward-looking statements that involve a number of risks and uncertainties including, but not limited to, the Companys ability to achieve profitable operations, its ability to continue to operate as a going concern, its ability to continue to meet NASDAQ continued listing requirements, the effects of the spread of the Coronavirus (COVID-19), the demand for the Companys products and services in the Peoples Republic of China, general economic conditions and other risk factors detailed in the Companys annual report and other filings with the United States Securities and Exchange Commission.

Investor Relations Contact:

Janice WangEverGreen Consulting Inc.Email: IR@changqingconsulting.comPhone: +1 571-464-9470 (from U.S.)+86 13811768559 (from China)

BOQI INTERNATIONAL MEDICAL, INC. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

March31 December31 2021 2020 ASSETS CURRENT ASSETS Cash $ 2,830,834 $ 135,309 Restricted cash 4,590 - Accounts receivable, net 7,169,691 6,686,552 Advances to suppliers 3,093,935 2,693,325 Amount due from related parties 41,012 - Inventories, net 3,569,135 735,351 Prepayments and other receivables 4,941,351 14,880,526 Operating lease-right of use assets 46,521 53,425 Total current assets 21,697,069 25,184,488 NON-CURRENT ASSETS Deferred tax assets 181,451 193,211 Property, plant and equipment, net 1,769,927 910,208 Operating lease-right of use assets 1,572,515 - Intangible assets-net 13,445 - Goodwill 24,512,118 6,914,232 Total non-current assets 28,049,456 8,017,651 TOTAL ASSETS $ 49,746,525 $ 33,202,139 LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term loans $ 1,054,510 $ 904,228 Long-term loans due within one year 496,974 34,201 Convertible promissory notes, net 5,132,530 3,328,447 Accounts payable, trade 10,183,541 5,852,050 Advances from customers 529,279 194,086 Amount due to related parties 791,581 226,514 Taxes payable 60,322 773,649 Other payables and accrued liabilities 4,849,557 4,228,976 Lease liability-current 354,705 23,063 Total current liabilities 23,452,999 15,565,214 Lease liability-non current 1,396,148 22,457 Long-term loans - non-current 425,592 720,997 Total non-current liabilities 1,821,740 743,454 TOTAL LIABILITIES 25,274,739 16,308,668 EQUITY Common stock, $0.001 par value; 50,000,000shares authorized; 20,131,488 and13,254,587 shares issued and outstanding as 20,131 13,254 of March 31, 2021 and December 31, 2020,respectivelyAdditional paid-in capital 37,362,809 26,344,920 Statutory reserves 2,263,857 2,263,857 Accumulated deficit (16,248,215 ) (12,914,973 )Accumulated other comprehensive income 853,795 1,003,392 Total BOQI International Medical Inc.?s 24,252,377 16,710,450 equity NON-CONTROLLING INTERESTS 219,409 183,021 Total equity 24,471,786 16,893,471 Total liabilities and equity $ 49,746,525 $ 33,202,139

BOQI INTERNATIONAL MEDICAL, INC. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE GAIN/LOSS (UNAUDITED)

For three months ended March31 2021 2020 REVENUES 2,168,004 414,584 COST OF REVENUES 1,575,743 332,299 GROSS PROFIT(LOSS) 592,261 82,285 OPERATING EXPENSES: Sales and marketing 452,636 41,070 General and administrative 3,380,014 1,364,952 Total operating expenses 3,832,650 1,406,022 LOSS FROM OPERATIONS (3,240,389 ) (1,323,737 ) OTHER INCOME (EXPENSE) Interest expense 44,355 21,684 Other (income)/ expense (12,865 ) 545 Total other income (expense), net (31,490 ) (22,229 ) LOSS BEFORE INCOME TAXES (3,271,879 ) (1,345,966 ) PROVISION FOR INCOME TAXES 18,748 1,268 NET LOSS FROM CONTINUING OPERATIONS (3,290,627 ) (1,347,234 ) DISCONTINUED OPERATIONS Income/(loss) from operations of - (854,957 )discontinued operations NET LOSS (3,290,627 ) (2,202,191 )Less: net income (loss) attributable to 42,615 (7,316 )non-controlling interestNET LOSS ATTRIBUTABLE TO BOQI $ (3,333,242 ) $ (2,194,875 )INTERATIONAL MEDICAL INC. OTHER COMPREHENSIVE LOSS Foreign currency translation adjustment (149,597 ) (120,201 ) TOTAL COMPREHENSIVE LOSS (3,440,224 ) (2,322,392 )Less: comprehensive loss attributable (10,886 ) (4,935 )to non-controlling interestsCOMPREHENSIVE LOSS ATTRIBUTABLE TO BOQI $ (3,429,338 ) $ (2,317,457 )INTERNATIONAL MEDICAL INC. WEIGHTED AVERAGE NUMBER OF COMMON SHARESBasic and diluted 16,693,038 9,271,641 INCOME (LOSS) PER SHARE Continuing operation-Basic and diluted $ (0.20 ) $ (0.15 )Discontinued operation-Basic and $ - $ (0.09 )dilutedBasic and diluted $ (0.20 ) $ (0.24 )