UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
April 1. 2021
Date of Report
(Date of earliest event reported)
BOQI International Medical Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 000-50155 | 02-0563302 | ||
|
(State or other jurisdiction
of incorporation) |
(Commission File Number) |
(IRS Employer
Identification No.) |
|
Room 3601, Building A, Harbour View Place, No. 2 Wuwu Road,
Zhongshan District, Dalian, Liaoning Province, P. R. China, 116000 |
| (Address of principal executive offices and zip code) |
| (8604) 1182209211 |
| (Registrant’s telephone number, including area code) |
| Not Applicable |
| (Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ☐
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 | BIMI | The NASDAQ Capital Market |
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On April 1, 2021, the Registrant reported its results of operations for the year ended December 31, 2020. A copy of the press release issued by the Registrant in this connection is furnished herewith as Exhibit 99.1.
The information in this Item in this Current Report on Form 8-K and Exhibit 99.1 attached hereto are being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
| (c) | Exhibits |
| Exhibit 99.1 | Press Release dated April 1, 2021 |
| 1 |
SIGNATURE
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.
| Date: April 1, 2021 | BOQI International Medical Inc. | |
| (Registrant) | ||
| By: | /s/ Tiewei Song | |
| Tiewei Song | ||
| Chief Executive Officer | ||
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Exhibit 99.1
BOQI International Medical Announces Fiscal Year 2020 Financial Results
New York, April 1, 2020 -- BOQI International Medical Inc. (NASDAQ: BIMI) (“BIMI” or the “Company”) announced its financial results for the fiscal year ended December 31, 2020.
Fiscal Year 2020 Financial Highlights:
| ● | Total revenues of $12,844,902 in the year ended December 31, 2020. |
| ● | Gross profit of $2,442,817 in the year ended December 31, 2020. |
| ● | Gross profit margin of 19% in the year ended December 31, 2020. |
Mr. Tiewei Song, Chief Executive Officer and President of BOQI International Medical Inc., commented, “We are proud to announce that our revenues reached over $12.8 million in 2020 due to the acquisition of Guanzan Group, which generated millions of revenues from the wholesale distribution of both medical devices and pharmaceuticals. The acquisition of the Guanzan Group proved to be the cornerstone for our growth strategy. We are continuing with our strategy to build a comprehensive healthcare ecosystem through both organic growth and acquisitions, increasing shareholder value and achieving sustained profitability.”
Revenues
Revenues for the years ended December 31, 2020 and 2019 were $12,844,902 and $0, respectively. The revenues for the year ended December 31, 2020 were substantially attributable to the revenues of the Guanzan Group, which we acquired in March 2020, and to a limited degree, the revenues of the Pharmacy Group’s directly-owned stores.
As a result of accounting for the revenues of NF Energy and Boqi Zhengji as discontinued operations in 2020 and 2019, the Company did not report any revenues in 2019.
Revenues from the wholesale distribution of medical devices and pharmaceuticals generated revenues of $3,059,462 and $9,701,353, respectively, in the year ended December 31, 2020. Revenues from the retail pharmacy segment for the year ended December 31, 2020 were $84,087.
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Cost of Revenues
Cost of revenues primarily consists of the cost of the medical devices, pharmaceuticals and other products sold to customers. Cost of revenues for the year ended December 31, 2020 was $10,402,085 compared with $0 for the year ended December 31, 2019. The increase reflected the costs associated with operations of the Guanzan Group.
Cost of revenue from the wholesale medical devices and the wholesale pharmaceuticals segments for the year ended December 31, 2020 were $2,481,616 and $7,850,315 respectively. Cost of revenue from the retail pharmacy segment for the year ended December 31, 2020 was $70,154.
Gross profit
For the year ended December 31, 2020, the Company had a gross profit margin of 19%.
The gross profit margin from wholesale distribution of medical devices and pharmaceuticals for the year ended December 31, 2020 were 18.9% and 19.1%, respectively. The retail pharmacy segment’s gross profit margin for the year ended December 31, 2020 was 16.6%.
Operating expenses
Operating expenses consist mainly of amortization of convertible notes, impairment loss of intangible assets and convertible notes issuance-related costs, auditing and legal service fees, other professional service fees and promotional expenses.
Operating expenses were $6,255,098 for the year ended December 31, 2020 compared to $985,974 for the year ended December 31, 2019, an increase of $5,269,124, or 534%. The increase is mainly due to amortization of convertible notes, and issuance-related costs for the convertible notes.
Operating expenses for the year ended December 31, 2020 consist mainly of amortization of the convertible notes in the amount of $2,091,927, meeting and promotional expenses in the amount of $938,086, depreciation and amortization expense of $56,041, audit fees of $329,693, convertible notes issuance-related costs in the amount of $211,425, legal fees of $172,575, and other professional service fees in the amount of $880,505.
For the year ended December 31, 2020, operating expenses of $4,365,751 were allocated to the parent company, which include amortization of convertible notes of $2,091,927 and professional service fees of $903,573. Operating expenses of the wholesale medical devices segment for the year ended December 31, 2020 were $88,932. Operating expenses of the wholesale pharmaceuticals segment for the year ended December 31, 2020 were $842,421. Operating expenses of the retail pharmacy segment for the year ended December 31, 2020 were $376,415.
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Other income (expenses)
For the year ended December 31, 2020, we reported other income of $460,552 compared to other expense of $550,057 for the year ended December 31, 2019. For the year ended December 31, 2020, other income mainly consisted of the exchange gains resulting from the appreciation of the RMB against the US dollar during 2020; and amortization of the discount applicable to the issuance of convertible promissory notes.
For the year ended December 31, 2019, other loss of $550,057 mainly consisted of: (i) the change in fair value of derivative liabilities related to the convertible promissory notes issued during 2019; and (ii) amortization of the discount applicable to the issuance of convertible promissory notes.
Net loss from continuing operation
Net loss from continuing operations was $3,786,035 for the year ended December 31, 2020 compared to a net loss of $1,536,031 for the year ended December 31, 2019, an increase of $2,250,004, which was primarily a result of the significantly increased operating expense of the parent company and the operating expenses of the Guanzan Group.
Income (Loss) from operations of discontinued operations
As a result of the plans to dispose of the NF Group and Boqi Zhengji and the actions taken to fulfill the plans, the businesses of the NF Group and Boqi Zhengji are recorded as discontinued operations in accordance with ASC 205-20 Presentation of Financial Statements – Discontinued Operation and the results of the operations of the NF Group and Boqi Zhengji are presented under the line item net loss from discontinued operations for the years ended December 31, 2020 and 2019.
Income from the discontinued operation was $1,908,110 for the year ended December 31, 2020 compared to a loss of $2,916,248 for the year ended December 31, 2019, which was primarily due to the income recognized upon the disposal of the NF Group and Boqi Zhengji.
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Net Loss
The Company reported a net loss of $1,877,925 for the year ended December 31, 2020 compared to a net loss of $4,452,279 for the year ended December 31, 2019, a decrease of $2,574,354.
Liquidity and Capital Resources
At December 31, 2020, the Company had cash of $135,309 and working capital of $9,619,274 as compared to cash of $1,601 and working capital of $8,512,585 at December 31, 2019.
About BOQI International Medical Inc.
BOQI International Medical Inc. (NASDAQ: BIMI) was founded in 2006. In February 2019, the Board of Directors of the Company determined to focus on the health industry. The Company is now exclusively a healthcare products provider, offering a broad range of healthcare products and related services. For more information about BOQI International Medical, 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 Company’s 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 Company’s products and the Company’s customers’ economic condition, risk of operations in the People’s Republic of China, general economic conditions and other risk factors detailed in the Company’s annual report and other filings with the United States Securities and Exchange Commission.
IR Contact:
Dragon Gate Investment Partners LLC
Tel: +1(646)-801-2803
Email: BIMI@dgipl.com
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BOQI INTERNATIONAL MEDICAL, INC. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| December 31 | December 31 | |||||||
| 2020 | 2019 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | 135,309 | $ | 1,601 | ||||
| Restricted cash | - | - | ||||||
| Accounts receivable, net | 6,686,552 | - | ||||||
| Advances to suppliers | 2,693,325 | - | ||||||
| Amount due from related parties | - | - | ||||||
| Inventories, net | 735,351 | - | ||||||
| Prepayments and other receivables | 14,880,526 | 7,843 | ||||||
| Operating lease-right of use assets | 53,425 | - | ||||||
| Assets from discontinued operations | - | 30,052,334 | ||||||
| Total current assets | 25,184,488 | 30,061,778 | ||||||
| NON-CURRENT ASSETS | ||||||||
| Deferred tax assets | 193,211 | - | ||||||
| Property, plant and equipment, net | 910,208 | - | ||||||
| Goodwill | 6,914,232 | - | ||||||
| Total non-current assets | 8,017,651 | - | ||||||
| TOTAL ASSETS | $ | 33,202,139 | $ | 30,061,778 | ||||
| LIABILITIES AND EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Short-term loans | $ | 904,228 | $ | - | ||||
| Long-term loans due within one year | 34,201 | - | ||||||
| Convertible promissory notes, net | 3,328,447 | 107,383 | ||||||
| Derivative liability | - | 1,272,871 | ||||||
| Accounts payable, trade | 5,852,050 | - | ||||||
| Advances from customers | 194,086 | - | ||||||
| Amount due to related parties | 226,514 | 382,037 | ||||||
| Taxes payable | 773,649 | - | ||||||
| Other payables and accrued liabilities | 4,228,976 | 5,837,931 | ||||||
| Lease liability-current | 23,063 | - | ||||||
| Liabilities from discontinued operations | - | 13,948,971 | ||||||
| Total current liabilities | 15,565,214 | 21,549,193 | ||||||
| Lease liability-non current | 22,457 | - | ||||||
| Long-term loans - non-current | 720,997 | - | ||||||
| Total non-current liabilities | 743,454 | - | ||||||
| TOTAL LIABILITIES | 16,308,668 | 21,549,193 | ||||||
| EQUITY | ||||||||
| Common stock, $0.001 par value; 50,000,000 shares authorized; 13,254,587 and 9,073,289 shares issued and outstanding as of December 31, 2020 and 2019, respectively | 13,254 | 9,073 | ||||||
| Additional paid-in capital | 26,344,920 | 15,643,825 | ||||||
| Statutory reserves | 2,263,857 | 2,227,634 | ||||||
| Accumulated deficit | (12,914,973 | ) | (10,881,667 | ) | ||||
| Accumulated other comprehensive income | 1,003,392 | 1,683,770 | ||||||
| Total BOQI International Medical Inc.’s equity | 16,710,450 | 8,682,635 | ||||||
| NON-CONTROLLING INTERESTS | 183,021 | (170,050 | ) | |||||
| Total equity | 16,893,471 | 8,512,585 | ||||||
| Total liabilities and equity | $ | 33,202,139 | $ | 30,061,778 | ||||
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BOQI INTERNATIONAL MEDICAL, INC. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
GAIN/LOSS
| For the Year Ended December 31 | ||||||||
| 2020 | 2019 | |||||||
| REVENUES | 12,844,902 | - | ||||||
| COST OF REVENUES | 10,402,085 | - | ||||||
| GROSS PROFIT(LOSS) | 2,442,817 | - | ||||||
| OPERATING EXPENSES: | ||||||||
| Sales and marketing | 783,134 | - | ||||||
| General and administrative | 5,471,964 | 985,974 | ||||||
| Total operating expenses | 6,255,098 | 985,974 | ||||||
| LOSS FROM OPERATIONS | (3,812,281 | ) | (985,974 | ) | ||||
| OTHER INCOME (EXPENSE) | ||||||||
| Interest income | 304 | - | ||||||
| Interest expense | (84,913 | ) | (6,347 | ) | ||||
| Exchange gains | 547,114 | - | ||||||
| Other expense | (1,953 | ) | (543,710 | ) | ||||
| Total other income (expense), net | 460,552 | (550,057 | )) | |||||
| LOSS BEFORE INCOME TAXES | (3,351,729 | ) | (1,536,031 | ) | ||||
| PROVISION FOR INCOME TAXES | 434,306 | - | ||||||
| NET LOSS FROM CONTINUING OPERATIONS | (3,786,035 | ) | (1,536,031 | ) | ||||
| DISCONTINUED OPERATIONS | ||||||||
| Income (loss) from operations of discontinued operations | 1,908,110 | (2,916,248 | ) | |||||
| NET LOSS | (1,877,925 | ) | (4,452,279 | ) | ||||
| Less: net income (loss) attributable to non-controlling interest | 119,158 | (13,714 | ) | |||||
| NET LOSS ATTRIBUTABLE TO BOQI INTERNATIONAL MEDICAL INC. | $ | (1,997,083 | ) | $ | (4,438,565 | ) | ||
| OTHER COMPREHENSIVE LOSS | ||||||||
| Foreign currency translation adjustment | (941,957 | ) | (110,557 | ) | ||||
| TOTAL COMPREHENSIVE LOSS | (2,819,882 | ) | (4,562,836 | ) | ||||
| Less: comprehensive loss attributable to non-controlling interests | (17,113 | ) | (19,739 | ) | ||||
| COMPREHENSIVE LOSS ATTRIBUTABLE TO BOQI INTERNATIONAL MEDICAL INC. | $ | (2,802,769 | ) | $ | (4,543,097 | ) | ||
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES | ||||||||
| Basic and diluted | 10,672,814 | 8,169,179 | ||||||
| INCOME/(LOSS) PER SHARE | ||||||||
| Continuing operation-Basic and diluted | $ | (0.36 | ) | $ | (0.19 | ) | ||
| Discontinued operation-Basic and diluted | $ | 0.18 | $ | (0.36 | ) | |||
| Basic and diluted | $ | (0.18 | ) | $ | (0.55 | ) | ||
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