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

 

May 24, 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 May 24, 2021, the Registrant reported its results of operations for the quarterly period ended March 31, 2021. 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 May 24, 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: May 24, 2021 BOQI International Medical Inc.
  (Registrant)
     
  By: /s/ Tiewei Song
    Tiewei Song
    Chief Executive Officer

 

 

2

 

Exhibit 99.1

 

BOQI International Medical Announces First Quarter 2021 Financial Results

 

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 rounding   2021     2020     % change  
Revenues   $ 2.17 million     $ 0.41 million       423 %
Gross profit   $ 0.59 million     $ 0.08 million       620 %
Gross margin     27.32 %     19.85 %     7.47 %
Net loss from continuing operations   $ 3,290,627     $ 1,347,234       144 %
Net loss attributable to BOQI International Medical Inc.   $ 3,333,242     $ 2,194,875       52 %

 

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.

 

2

 

 

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 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 services 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.

 

Investor Relations Contact:

 

Janice Wang 
EverGreen Consulting Inc. 
Email: IR@changqingconsulting.com 
Phone: +1 571-464-9470 (from U.S.) 
+86 13811768559 (from China)

 

3

 

 

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

 

    March 31     December 31  
    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; 50,000,000 shares authorized; 20,131,488 and 13,254,587 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively     20,131       13,254  
Additional 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 equity     24,252,377       16,710,450  
                 
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  

 

4

 

 

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

 

    For three months ended
March 31 		 
    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 discontinued operations     -       (854,957 )
                 
NET LOSS     (3,290,627 )     (2,202,191 )
Less: net income (loss) attributable to non-controlling interest     42,615       (7,316 )
NET LOSS ATTRIBUTABLE TO BOQI INTERATIONAL MEDICAL INC.   $ (3,333,242 )   $ (2,194,875 )
                 
OTHER COMPREHENSIVE LOSS                
Foreign currency translation adjustment     (149,597 )     (120,201 )
                 
TOTAL COMPREHENSIVE LOSS     (3,440,224 )     (2,322,392 )
Less: comprehensive loss attributable to non-controlling interests     (10,886 )     (4,935 )
COMPREHENSIVE LOSS ATTRIBUTABLE TO BOQI INTERNATIONAL MEDICAL INC.   $ (3,429,338 )   $ (2,317,457 )
                 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES                
Basic 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 diluted   $ -     $ (0.09 )
Basic and diluted   $ (0.20 )   $ (0.24 )

 

 

5