Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Mar. 31, 2020 | Jul. 08, 2020 | Sep. 30, 2019 | |
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-K | ||
Document Period End Date | Mar. 31, 2020 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 22,400,000 | ||
Entity Common Stock, Shares Outstanding | 37,961,790 | ||
Entity File Number | 001-34711 | ||
Entity incorporate state country code | NV |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 16,176,318 | $ 9,322,463 |
Restricted cash | 14,806,288 | 15,422,739 |
Financial assets available for sale | 157,159 | 180,928 |
Notes receivable | 57,005 | 177,278 |
Trade accounts receivable | 9,770,656 | 8,692,514 |
Inventories | 12,247,004 | 13,955,202 |
Other receivables, net | 5,069,442 | 4,438,230 |
Advances to suppliers | 1,174,800 | 1,950,252 |
Other current assets | 1,528,540 | 2,063,375 |
Total current assets | 60,987,212 | 56,202,981 |
PROPERTY AND EQUIPMENT, net | 7,633,740 | 8,727,358 |
OTHER ASSETS | ||
Long-term investment | 2,544,451 | 24,243 |
Farmland assets | 742,347 | 825,259 |
Long term deposits | 1,456,384 | 2,157,275 |
Other noncurrent assets | 1,046,763 | 1,196,197 |
Operating lease right-of-use assets | 21,711,376 | |
Intangible assets, net | 3,393,960 | 3,597,323 |
Total other assets | 30,895,281 | 7,800,297 |
Total assets | 99,516,233 | 72,730,636 |
CURRENT LIABILITIES | ||
Short-term bank loan | 1,410,130 | |
Accounts payable, trade | 21,559,494 | 23,106,230 |
Notes payable | 26,605,971 | 25,951,673 |
Other payables | 2,522,330 | 3,197,221 |
Other payables - related parties | 490,218 | 795,179 |
Customer deposits | 708,140 | 771,942 |
Taxes payable | 119,247 | 125,859 |
Accrued liabilities | 753,612 | 1,264,182 |
Long-term loan payable-current portion | 2,287,742 | |
Current portion of operating lease liabilities | 981,090 | |
Total current liabilities | 57,437,974 | 55,212,286 |
Long-term loan payable | 4,115,958 | |
Long term operating lease liabilities | 19,049,575 | |
Employee Deposits | 70,507 | 81,935 |
Purchase option and warrants liability | 64,090 | 465,248 |
Total liabilities | 80,738,104 | 55,759,469 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY | ||
Common stock; $0.001 par value; 250,000,000 shares authorized; 32,936,786 and 28,936,778 shares issued and outstanding as of March 31, 2020 and March 31, 2019 | 32,937 | 28,937 |
Preferred stock; $0.001 par value; 10,000,000 shares authorized; nil issued and outstanding as of March 31, 2020 and March 31, 2019 | ||
Additional paid-in capital | 54,209,301 | 44,905,664 |
Statutory reserves | 1,309,109 | 1,309,109 |
Accumulated deficit | (36,400,837) | (30,587,468) |
Accumulated other comprehensive income | 1,440,424 | 2,508,964 |
Total stockholders' equity | 20,590,934 | 18,165,206 |
Noncontrolling interests | (1,812,805) | (1,194,039) |
Total equity | 18,778,129 | 16,971,167 |
Total liabilities and stockholders' equity | $ 99,516,233 | $ 72,730,636 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2020 | Mar. 31, 2019 |
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 | 32,936,786 | 28,936,778 |
Common stock, shares outstanding | 32,936,786 | 28,936,778 |
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 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
REVENUES, NET | $ 117,327,689 | $ 107,551,012 |
COST OF GOODS SOLD | 91,801,259 | 82,442,969 |
GROSS PROFIT | 25,526,430 | 25,108,043 |
SELLING EXPENSES | 23,793,603 | 24,265,184 |
GENERAL AND ADMINISTRATIVE EXPENSES | 8,108,377 | 1,718,989 |
IMPAIRMENT OF LONG-LIVED ASSETS | 628,192 | |
TOTAL OPERATING EXPENSES | 32,530,172 | 25,984,173 |
LOSS FROM OPERATIONS | (7,003,742) | (876,130) |
OTHER INCOME (EXPENSE): | ||
INTEREST INCOME | 1,063,747 | 112,887 |
INTEREST EXPENSE | (698,518) | |
OTHER | (204,064) | (93,311) |
CHANGE IN FAIR VALUE OF PURCHASE OPTION AND WARRANTS LIABILITY | 401,158 | (326,452) |
LOSS BEFORE INCOME TAXES | (6,441,419) | (1,183,006) |
PROVISION FOR INCOME TAXES | 16,258 | 134,763 |
NET LOSS | (6,457,677) | (1,317,769) |
ADD: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST | (644,308) | (391,491) |
NET LOSS ATTRIBUTABLE TO CHINA JO-JO DRUGSTORES, INC. | (5,813,369) | (926,278) |
OTHER COMPREHENSIVE LOSS | ||
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS | (1,068,540) | (1,077,496) |
COMPREHENSIVE LOSS | $ (7,526,217) | $ (2,395,265) |
WEIGHTED AVERAGE NUMBER OF SHARES: | ||
Basic | 32,816,567 | 28,936,778 |
Diluted | 32,816,567 | 28,936,778 |
LOSS PER SHARES: | ||
Basic | $ (0.18) | $ (0.03) |
Diluted | $ (0.18) | $ (0.03) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - 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, 2018 | $ 28,937 | $ 43,599,089 | $ 1,309,109 | $ (29,661,190) | $ 3,586,460 | $ 18,862,405 | |
Balance, Share at Mar. 31, 2018 | 28,936,778 | ||||||
Stock based compensation | 197,100 | 197,100 | |||||
Increase in capital of Jiuzhou Pharmacy | 7,529 | 7,529 | |||||
Start-up of Linjia Medical | 223,629 | 223,629 | |||||
Sale of 10% of Jiuxin Medicine | 1,101,946 | (1,027,082) | 74,864 | ||||
Net loss | (926,278) | (391,491) | (1,317,769) | ||||
Foreign currency translation loss | (1,077,496) | 905 | (1,076,591) | ||||
Balance at Mar. 31, 2019 | $ 28,937 | 44,905,664 | 1,309,109 | (30,587,468) | 2,508,964 | (1,194,039) | 18,165,206 |
Balance, Shares at Mar. 31, 2019 | 28,936,778 | ||||||
Stock based compensation | 34,560 | 38,560 | |||||
Sale of stock and warrants | $ 4,000 | 9,269,077 | 9,273,077 | ||||
Sale of stock and warrants, shares | 4,000,008 | ||||||
Net loss | (5,813,369) | (644,308) | (6,457,677) | ||||
Foreign currency translation loss | (1,068,540) | 25,542 | (1,042,998) | ||||
Balance at Mar. 31, 2020 | $ 32,937 | $ 54,209,301 | $ 1,309,109 | $ (36,400,837) | $ 1,440,424 | $ (1,812,805) | $ 20,590,934 |
Balance, Shares at Mar. 31, 2020 | 32,936,786 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Equity (Parenthetical) | 12 Months Ended |
Mar. 31, 2020 | |
Statement of Stockholders' Equity [Abstract] | |
Sale of Jiuxin Medicine | 10.00% |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ (6,457,677) | $ (1,317,769) |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Bad debt direct write-off and provision | 446,354 | (3,357,851) |
Depreciation and amortization | 2,082,817 | 1,676,413 |
Impairment of long lived assets | 628,192 | |
Stock based compensation | 34,560 | 197,100 |
Change in fair value of purchase option derivative liability | (401,158) | 326,452 |
Change in operating assets: | ||
Accounts receivable, trade | (1,567,774) | (116,810) |
Notes receivable | 112,803 | 83,910 |
Inventories and biological assets | 979,935 | (1,390,823) |
Other receivables | (1,010,722) | (1,308,437) |
Advances to suppliers | 148,638 | 3,612,453 |
Long term deposit | 596,209 | 183,841 |
Other current assets | (1,278,833) | (83,372) |
Other noncurrent assets | 87,065 | (23,511) |
Change in operating liabilities: | ||
Accounts payable, trade | (317,755) | (528,353) |
Other payables and accrued liabilities | (967,751) | (328,473) |
Customer deposits | (22,963) | (3,011,194) |
Taxes payable | 115 | (216,792) |
Net cash used in operating activities | (6,907,945) | (5,603,216) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Disposal of financial assets available for sale | 14,356 | 87,290 |
Purchase of financial assets available for sale | (104,360) | |
Acquisition of equipment and building | (656,297) | (5,450,934) |
Investment in a joint venture | (2,567,083) | |
Increase intangible assets | (871,145) | (29,817) |
Additions to leasehold improvements | (756,444) | (1,828,360) |
Net cash used in investing activities | (4,836,613) | (7,326,181) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from short-term bank loan | 1,435,620 | |
Proceeds from third parties loan | 7,178,100 | |
Repayment of third parties loan | (658,645) | |
Proceeds from notes payable | 48,974,772 | 42,030,521 |
Repayment of notes payable | (46,896,917) | (34,018,811) |
Increase in financial liability | (7,178) | 81,997 |
Proceeds from sale of stock and warrants | 9,273,077 | 7,529 |
Repayment of other payables-related parties | (285,123) | (22,655) |
Net cash provided by financing activities | 19,013,706 | 8,078,581 |
EFFECT OF EXCHANGE RATE ON CASH | (1,031,744) | (1,856,174) |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | 6,237,404 | (6,706,989) |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, beginning of year | 24,745,202 | 31,452,191 |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, end of year | 30,982,606 | 24,745,202 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for income taxes | 17,198 | 56,422 |
Cash paid for interest | $ 108,098 |
Description of Business and Org
Description of Business and Organization | 12 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
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. During the year ended March 31, 2020, the Company dissolved eight independent pharmacies. Among the eight dissolved pharmacies, two stores have merged into Jiuzhou Pharmacy and became Jiuzhou Pharmacy stores in Hangzhou. The other six stores' licenses of government medical insurance, which qualify the stores for government reimbursement, were transferred to six Jiuzhou Pharmacy stores in Hangzhou 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 fiscal 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 ● 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. |
Liquidity
Liquidity | 12 Months Ended |
Mar. 31, 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 March 31, 2020, the Company had obtained thirty-six 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 14. As of March 31, 2020, approximately $0.53 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 March 31, 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Note 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation and consolidation The accompanying 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 financial liability is recorded at fair value and is determined based on unobservable inputs (Level 3) (See Note 22). Active Market Observable Unobservable Total Cash, cash equivalents and restricted cash $ 30,982,606 - - 30,982,606 Financial assets available for sale - - 157,159 157,159 Account receivable 9,770,656 9,770,656 Notes receivable 57,005 57,005 Other receivable 5,069,442 5,069,442 Accounts payable 21,559,494 21,559,494 Notes payable - 26,605,971 - 26,605,971 Other payable 2,522,330 2,522,330 Long-term loan payable 6,403,700 6,403,700 Financial liability 70,507 70,507 Warrants liability - 64,090 - 64,090 Total $ 69,961,533 33,073,761 227,666 103,262,960 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 purchasse in the future. At the end of each period, unredeemed membership rewards are reflected as a contract liability. Online pharmacy sales The online pharmacy 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. The Company's revenue is net of VAT collected on behalf of PRC tax authorities in 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. Disaggregation of Revenue The following table disaggregates the Company's revenue by major source in each segment for the years ended March 31, 2020 and 2019: For the year ended March 31 2020 2019 Retail drugstores Prescription drugs $ 26,045,423 $ 23,516,046 OTC drugs 31,532,248 31,401,328 Nutritional supplements 6,013,622 6,354,108 TCM 5,325,008 6,529,790 Sundry products 1,312,293 941,491 Medical devices 3,852,643 3,591,646 Total retail revenue $ 74,081,237 $ 72,334,409 Online pharmacy Prescription drugs $ 1,447,469 $ - OTC drugs 5,721,638 3,127,976 Nutritional supplements 742,809 737,315 TCM 266,638 74,262 Sundry products 2,082,601 2,736,070 Medical devices 3,280,060 2,108,836 Total online revenue $ 13,541,215 $ 8,784,459 Drug wholesale Prescription drugs $ 24,857,708 $ 16,745,862 OTC drugs 4,196,841 8,964,587 Nutritional supplements 205,881 290,534 TCM 314,769 271,280 Sundry products 43,854 24,846 Medical devices 86,184 135,035 Total wholesale revenue $ 29,705,237 $ 26,432,144 Total revenue $ 117,327,689 $ 107,551,012 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: March 31, March 31, Trade receivable(included in accounts receivable, net) $ 9,770,656 $ 8,692,514 Contract liabilities (included in accrued expenses) 1,106,982 1,689,099 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 March 31, 2020 and March 31, 2019: March 31, March 31, Cash and cash equivalents $ 16,176,318 $ 9,322,463 Restricted cash 14,806,288 15,422,739 Cash, cash equivalents and restricted cash $ 30,982,606 $ 24,745,202 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 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. In the year ended March 31, 2020, the Company evaluated the licenses of insurance applicable drugstores acquired in the past based on their 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 of $628,192 as of March 31, 2020.. 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 follows FASB ASC Topic 740, "Income Taxes," which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The accounting standards clarify the accounting and disclosure requirements for uncertain tax positions and prescribe a recognition threshold and measurement attribute for recognition and measurement of a tax position taken or expected to be taken in a tax return. The accounting standards also provide guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition. No significant penalties, uncertain tax provisions or interest relating to income taxes were incurred during the periods ended March 31, 2020 and 2019. 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 $262,553 and $1,023,461 for the years ended March 31, 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 March 31, 2020 and 2019 were translated at 1 RMB to 0.1410 USD and at 1 RMB to 0.1490 USD, respectively. The average translation rates applied to income and cash flow statement amounts for years ended March 31, 2020 and 2019 were at 1 RMB to 0.1436 USD and at 1 RMB to 0.1491 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 79,600) per bank. As of March 31, 2020 and March 31, 2019, the Company had deposits totaling $30,974,714 and $24,730,736 that were covered by such limited insurance, respectively. Any balance over RMB 500,000 (USD 79,600) per bank in PRC will not be covered. To date, the Company has not experienced any losses in such accounts. For the fiscal year ended March 31, 2020, two vendors collectively accounted for 50.4% of the Company's total purchases and two suppliers accounted for more than 10% of total advances to suppliers. For the fiscal year ended March 31, 2019, two vendors collectively accounted for 40.3% of the Company's total purchases and two suppliers accounted for more than 10% of total advances to suppliers. For the fiscal year ended March 31, 2020, no customer accounted for more than 10% of the Company's total sales and more than 10% of total accounts receivable. For the fiscal year ended March 31, 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 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 fina |
Financial Assets Available for
Financial Assets Available for Sale | 12 Months Ended |
Mar. 31, 2020 | |
Financial Assets Available for Sale [Abstract] | |
FINANCIAL ASSETS AVAILABLE FOR SALE | NOTE 4 – FINANCIAL ASSETS AVAILABLE FOR SALE As of March 31, 2020 and March 31, 2019, financial assets available for sale amounted to $157,159 (RMB 1,114,500) and $180,928 (RMB 1,214,500), respectively. As of March 31, 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 Inter Mongolia Songlu Pharmaceutical Co.("Songlu Pharmaceutical"). As of March 31, 2020, the fair value of the investment is $84,608 (RMB600,000), which accounts for 0.5% shares of Songlu Pharmaceutical. The Company has also invested a total of $14,538 (RMB100,000) in a mutual fund, which has been liquidated in the year ended March 31, 2020. |
Trade Accounts Receivable
Trade Accounts Receivable | 12 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
TRADE ACCOUNTS RECEIVABLE | NOTE 5 – TRADE ACCOUNTS RECEIVABLE Trade accounts receivable consisted of the following: March 31, March 31, Accounts receivable $ 12,034,726 $ 11,939,364 Less: allowance for doubtful accounts (2,264,070 ) (3,246,850 ) Trade accounts receivable, net $ 9,770,656 $ 8,692,514 For the years ended March 31, 2020 and 2019, $212,338 and $146,593 in accounts receivable were directly written off, respectively. As of March 31, 2020, $627,055 were pledged as collateral for borrowings from financial institutions. As of March 31, 2019, no trade accounts receivables were pledged as collateral for borrowings from financial institutions. |
Other Current Assets
Other Current Assets | 12 Months Ended |
Mar. 31, 2020 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
OTHER CURRENT ASSETS | Note 6 – OTHER CURRENT ASSETS Other current assets consisted of the following: March 31, March 31, Prepaid rental expenses (1) $ 1,364,975 $ 1,979,852 Prepaid and other current assets 163,565 83,523 Total $ 1,528,540 $ 2,063,375 (1) The balance as of March 31, 2020 includes short-term refundable rental security deposits only, while the balance as of March 31, 2019 includes security deposits of $1,444,026 and prepaid rental of $535,826. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | Note 7 – PROPERTY AND EQUIPMENT Property and equipment consisted of the following: March 31, March 31, Building $ 5,880,627 $ 6,436,297 Leasehold improvements 9,209,136 8,944,025 Farmland development cost 1,686,430 1,781,627 Office equipment and furniture 5,632,955 5,470,084 Motor vehicles 504,327 551,927 Total 22,913,475 23,183,960 Less: Accumulated depreciation (13,059,852 ) (12,111,409 ) Impairment* (2,219,883 ) (2,345,193 ) Property and equipment, net $ 7,633,740 $ 8,727,358 * The variance of impairment from March 31, 2020 to March 31, 2019 is solely caused by exchange rate variance. Total depreciation expense for property and equipment was $1,828,514 and $1,221,520 for the year ended March 31, 2020 and 2019, respectively. There were no fixed assets impaired in the years ended March 31, 2020 and December 31, 2019. |
Long-Term Investment
Long-Term Investment | 12 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
LONG-TERM INVESTMENT | Note 8 – LONG-TERM INVESTMENT Long-term investment consists of the following: March 31, March 31, Kahamadi Bio (1) $ 6,217 * $ 24,243 * Zhetong Medical (2) 2,538,234 - Advance to suppliers, net $ 2,544,451 $ 24,243 (1) It represents 49% investment in Kahamadi Bio. The investment is recorded using equity method. Kahamadi Bio suffered loss in the year ended March 31, 2020. (2) It represents 39% investment in Zhejiang Zhetong Medical Co., Ltd. Zhetong Medical is established in March 2020 and targeted to acquire or cooperate with potential local pharmacies. By attracting more funds from local investors, the Company expects to continue growing its local network in the future. |
Advances to Suppliers
Advances to Suppliers | 12 Months Ended |
Mar. 31, 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 March 31, 2020 and March 31, 2019, advance to suppliers consist of the following: March 31, March 31, Advance to suppliers $ 2,198,863 * $ 2,477,226 * Less: allowance for doubtful accounts (1,024,063 )* (526,974 )* Advance to suppliers, net $ 1,174,800 $ 1,950,252 * For the years ended March 31, 2020 and 2019, none of the advances to suppliers were written off against previous allowance for non-refundable advances, respectively. |
Inventory
Inventory | 12 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORY | Note 10 – INVENTORY Inventory consisted of finished goods, valued at $12,247,004 and $13,955,202 as of March 31, 2020 and March 31, 2019, respectively. The Company constantly monitors its potential obsolete products and is allowed to return products close to their expiration date 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 March 31, 2020 and March 31, 2019. |
Farmland Assets
Farmland Assets | 12 Months Ended |
Mar. 31, 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 March 31, 2020 and March 31, 2019, farmland assets are valued as follows: March 31, March 31, 2020 2019 Farmland assets $ 2,177,606 $ 2,341,537 Less: Impairment* (1,435,259 ) (1,516,278 ) Farmland assets, net $ 742,347 $ 825,259 * 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, is approximately $2,416,839. Based on an independent appraisal report, the value of the Ginkgo trees is approximately $796,286. As a result, the Company recorded an agricultural inventory impairment of $1,620,553 as of March 31, 2018. There are no leasehold impairment expense in fiscal 2019 and 2020. |
Long Term Deposits, Landlords
Long Term Deposits, Landlords | 12 Months Ended |
Mar. 31, 2020 | |
Long Term Deposits, Landlords [Abstract] | |
LONG TERM REFUNDABLE DEPOSITS, LANDLORDS | Note 12 – LONG TERM DEPOSITS, LANDLORDS As of March 31, 2020 and March 31, 2019, long term deposits amounted to $1,456,384 and $2,157,275, respectively. Long term deposits are sums deposited with, or advanced to, landlords for the purpose of securing retail store leases that the Company does not anticipate applying or 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. |
Other Noncurrent Assets
Other Noncurrent Assets | 12 Months Ended |
Mar. 31, 2020 | |
Other Assets, Noncurrent Disclosure [Abstract] | |
OTHER NONCURRENT ASSETS | Note 13 – OTHER NONCURRENT ASSETS Other noncurrent assets consisted of the following: March 31, March 31, Forest land use rights* $ 994,558 $ 1,103,235 Others 52,205 92,962 Total $ 1,046,763 $ 1,196,197 * The prepayment for lease of forest land use rights is made to a local government in connection with 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 land use right was approximately $26,975 and $28,071 for the years ended March 31, 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: Years ending March 31, Amount 2020 $ 26,975 2021 26,975 2022 26,975 2023 26,975 2024 26,975 Thereafter 859,683 |
Leases
Leases | 12 Months Ended |
Mar. 31, 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 year ended March 31, 2020 is $5,471,063. The Company does not have finance lease according to the definition of ASU 2016-02, Leases Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows paid for operating leases $ 5,471,063 Right-of-use assets obtained in exchange for lease obligations: Operating leases - Supplemental balance sheet information related to leases as of March 31, 2020 is as follows: Operating leases: Operating lease right-of-use assets $ 21,711,376 Current portion of operating lease liabilities $ 981,090 Long-term operating lease liabilities 19,049,575 Total operating lease liabilities $ 20,030,665 Weighted average remaining lease term Operating leases 3.00 Weighted average discount rate Operating leases 4.19 % The following table summarizes the maturity of lease liabilities under operating leases as of March 31, 2020: Operating For the year ending March 31, Leases 2020 $ 1,023,767 2021 6,687,126 2022 5,292,371 2023 3,748,801 2024 2,531,061 Thereafter 3,209,053 Total lease payments 22,492,179 Less: imputed interest (2,461,514 ) Total lease liabilities $ 20,030,665 |
Intangible Assets
Intangible Assets | 12 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | Note 15 – INTANGIBLE ASSETS Net intangible assets consisted of the following at: March 31, March 31, License (1) $ 2,220,512 $ 1,909,700 Software (2) 1,083,024 676,336 Land use rights (3) 1,375,095 1,452,718 Total intangible assets 4,678,631 4,038,754 Less: accumulated amortization (667,633 ) (441,431 ) Less: impairment (4) (617,038 ) - Intangible assets, net $ 3,393,960 $ 3,597,323 Amortization expense of intangibles amounted to $254,303 and $228,046 for the years ended March 31, 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) They are primarily 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 a 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 March 31, 2020, the SAP system has a net value of $228,133 (RMB1,617,816),the internet Clinic Diagnosis System has a net value of approximately $379,143 (RMB 2,688,709), the Chronic Disease Management System has a net value of approximately $16,411 (RMB116,379) . (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. |
Notes Payable
Notes Payable | 12 Months Ended |
Mar. 31, 2020 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | Note 16 – NOTES PAYABLE The Company has credit facilities with Hangzhou United Bank ("HUB"), Zhejiang Tailong Commercial Bank ("ZTCB"), Bank of Hangzhou ("BOH"), and China Merchant Bank ("CMB") that provided working capital in the form of the following bank acceptance notes at March 31, 2020 and March 31, 2019: Origination Maturity March 31, March 31, Beneficiary Endorser date date 2020 2019 Jiuzhou Pharmacy(1) HUB 11/06/18 05/06/19 - 500,857 Jiuzhou Pharmacy(1) HUB 12/12/18 06/12/19 - 2,236,559 Jiuzhou Pharmacy(1) HUB 12/20/18 06/20/19 - 1,072,606 Jiuzhou Pharmacy(1) HUB 12/29/18 06/29/19 - 5,504,943 Jiuzhou Pharmacy(1) HUB 02/14/18 08/14/19 - 2,587,331 Jiuzhou Pharmacy(1) HUB 03/06/18 09/06/19 - 6,600,727 Jiuxin Medicine(1) HUB 10/11/18 04/11/19 - 4,461,531 Jiuxin Medicine(1) HUB 11/06/18 05/06/19 - 2,987,119 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 07/06/20 129,457 - Jiuzhou Pharmacy(1) HUB 02/19/20 08/19/20 5,105,096 - Jiuzhou Pharmacy(1) HUB 03/10/20 09/10/20 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 09/20/20 1,692,156 - Total $ 26,605,971 $ 25,951,673 (1) As of March 31, 2019, the Company had $25,951,673 (RMB 174,203,868) of notes payable from HUB. The Company is required to hold restricted cash in the amount of $15,114,740 (RMB 101,459,590) with HUB as collateral against these bank notes. Included in the restricted cash is a total of $10,446,381 three-year deposit (RMB 70,122,647) 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 March 31, 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 $8.76 million and the restricted cash of $5.83 million deposited in the banks, the total credit line was $27.14 million. As of March 31, 2020, the Company had approximately $26.61 million of bank notes payable and approximately $0.53 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. |
Loan Payable
Loan Payable | 12 Months Ended |
Mar. 31, 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 March 31, 2020, the remaining loan balance is $6,403,700. The Company is scheduled to make monthly repayments, among which $2,287,742 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. |
Taxes
Taxes | 12 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
TAXES | Note 18 – TAXES Income tax The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis, operating losses and tax credit carry forwards. Deferred tax assets and liabilities are calculated using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. Valuation allowances are provided against deferred income tax assets for amounts which are not considered "more likely than not" to be realized. The Company is subject to income taxes on an entity basis on income arising in or derived from the tax jurisdiction in which each entity is domiciled. Entity Income Tax Jurisdiction Jo-Jo Drugstores United States Renovation Hong Kong, PRC All other entities Mainland, PRC For the years ended March 31, 2020 and 2019, the components of income tax expense consist of the following: For the year ended March 31, 2020 2019 Current: Federal - - State - - Foreign 16,258 134,763 16,258 134,763 Deferred: Federal - - State - - Foreign - - - - Provision for income taxes 16,258 134,763 A reconciliation of the income tax provision at the federal statutory rate and the effective rate is as follows: For the year Ended March 31, 2020 2019 U.S. Statutory rates 21.0 % 21.0 % Foreign income not recognized in the U.S. (21.0 ) (21.0 ) China income taxes 25.0 25.0 Change in valuation allowance (1) (25.0 ) (25.0 ) Non-deductible expenses-permanent difference (2) (0.3 ) (11.4 ) Effective tax rate (0.3 )% (11.4 )% (1) Represents a non-taxable expense reversal due to overall decrease in allowance for accounts receivable and advances to suppliers. (2) The (0.3)% and (11.4)% rate adjustments for the years ended March 31, 2020 and 2019 represent expenses that primarily include stock option expenses and other expenses incurred by the Company that are not deductible for PRC income tax. The components of the Company's net deferred tax assets are as follows: As of As of Allowance 948,951 986,665 Long-lived assets impairment 709,230 586,298 Accrued expense 1,443,191 1,569,683 Net operating loss carry forward 1,157,900 1,164,735 Foreign Tax Credit Carryover 195,000 195,000 Total deferred tax assets (liabilities): 4,454,272 4,502,381 Valuation allowance (4,454,272 ) (4,502,381 ) Net deferred tax assets (liabilities) - - The Company regularly assesses the realizability of its deferred tax assets and establishes a valuation allowance if it is more-likely-than-not that some portion of the deferred tax assets will not be realized. We weigh all available positive and negative evidence, including earnings history and results of recent operations, scheduled reversals of deferred tax liabilities, projected future taxable income, and tax planning strategies. Assumptions used to forecast future taxable income often require significant judgment. More weight is given to objectively verifiable evidence. In the event we determine that we would not be able to realize all or part of our net deferred tax assets in the future, a valuation allowance will be established against deferred tax assets in the period in which we make such determination. The need to establish a valuation allowance against deferred tax assets may cause greater volatility in our effective tax rate. As of March 31, 2020 and March 31, 2019, the estimated net operating loss carry forwards for U.S. income tax purposes amounted to $816,908, which may be available to reduce future years' taxable income. These carry forwards will expire if not utilized by 2032. In addition, the Company carries a foreign tax credit of $195,000. As of March 31, 2020 and March 31, 2019, the estimated net operating loss carry forwards for Hong Kong income tax purposes amounted to $2,248,203 and $1,960,933, which may be available to reduce future years' taxable income. As of March 31, 2020 and March 31, 2019, the estimated net operating loss carry forwards for China income tax purposes amounted to $2,461,582 and $2,678,523, which may be available to reduce future years' taxable income. These carry forwards will expire if not utilized in the next five years. The Company recorded net unrecognized tax benefits of $0.0 million as of March 31, 2020. It is our policy to classify accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes. Audit periods remain open for review until the statute of limitations has passed, which in the PRC is usually 5 years as the Company's most significant tax jurisdiction. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company's liability for income taxes. Any such adjustment could be material to the Company's results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. |
Postretirement Benefits
Postretirement Benefits | 12 Months Ended |
Mar. 31, 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 $1,341,167 and $1,423,449 in employment benefits and pension for the years ended March 31, 2020 and 2019, respectively. |
Related Party Transactions and
Related Party Transactions and Arrangements | 12 Months Ended |
Mar. 31, 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: March 31, March 31, Due to a director and CEO (1) 490,218 795,179 (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 a retail space from Mr. Lei Liu. The lease expires in September 2020. Rent expenses totaled $26,582 and $27,605 for the twelve months ended March 31, 2020 and 2019, respectively. The amounts owed under the lease for the twelve months ended December 31, 2020 and 2019 were not paid to Mr. Liu as of March 31, 2019. 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. |
Warrants
Warrants | 12 Months Ended |
Mar. 31, 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. The fair value of the warrants issued to purchase 672,000 shares as described above was estimated by using the binominal pricing model with the following assumptions: Common Stock Common Stock March 31, March 31, Stock price $ 1.77 $ 2.62 Exercise price $ 3.10 $ 3.10 Annual dividend yield - % - % Expected term (years) 0.81 1.80 Risk-free interest rate 0.71 % 2.27 % Expected volatility 62.08 % 67.69 % (1) As of March 31, 2020, the warrants had not been exercised. 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 $465,248 as of March 31, 2019. For the year ended March 31, 2020, the Company recognized a gain of $401,158 for the investor warrant and placement agent warrant, from the change in fair value of the warrant liability, respectively. As a result, the warrant liability is carried on the consolidated balance sheets at the fair value of $64,090 for the investor warrant and placement agent warrant, collectively, as of March 31, 2020. |
Employee Deposits
Employee Deposits | 12 Months Ended |
Mar. 31, 2020 | |
Financial Liability [Abstract] | |
Employee Deposits | Note 22 – Financial Liability 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 $70,507 (RMB500,000) as financial liability as of March 31, 2020. |
Stockholder's Equity
Stockholder's Equity | 12 Months Ended |
Mar. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDER'S EQUITY | Note 23 – STOCKHOLDER'S EQUITY Common stock On January 23, 2017, the Company closed a private offering with one institutional investor (the "Investor") pursuant to which the Company sold to the Investor, and the Investor purchased from the Company, an aggregate of 4,840,000 shares of the common stock, par value $0.001 per share, of the Company, at a purchase price of $2.20 per share, for aggregate gross proceeds to the Company of $10,648,000 (the "Private Placement"). 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 ofcommon 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 willexpire on April 11, 2024. Upon evaluation, the warrants issued in April 2019 meet the definition of an equity under FASBASC 815. Accordingly, the fair value of the warrants 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. On March 30, 2018, the Company granted a total of 3,947,100 shares of restricted common stock to its key employees in its retail drugstores and online pharmacy under the Company's 2010 Equity Incentive Plan, as amended (the "Plan"). The stock awards vested on the grant date. On June 28, 2018, the compensation committee of the Company canceled 225,000 shares granted to the CEO in order to conform aggregate issuances to the 675,000 share limitation set forth in the Plan. The Tax Cuts and Jobs Act of 2017 removed the 162(m) qualified performance based compensation exemption to the $1 million cap on deductions for compensation to covered executives. Section 1.3.2 was in the Plan to permit grants under the Plan to fit within that exemption. As that exemption no longer applies for grants made in 2018 or thereafter, the Plan has been amended to remove the provisions intended to comply with that exemption, including the one in Section 1.3.2 of the Plan. All $5,328,585 of such expense has been recorded as a service compensation expense in the year ended March 31, 2018. 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 years ended March 31, 2020 and 2019, $0 and $0 were recorded as compensation expenses. As of March 31, 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 years ended March 31, 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. |
Segments
Segments | 12 Months Ended |
Mar. 31, 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 year ended March 31, 2020: Retail drugstores Online Pharmacy Drug wholesale Herb Total Revenue $ 74,081,237 $ 13,541,215 $ 29,705,237 $ - $ 117,327,689 Cost of goods 53,244,302 12,106,510 26,450,447 - 91,801,259 Gross profit $ 20,836,935 $ 1,434,705 $ 3,254,790 $ - $ 25,526,430 Selling expenses 19,434,860 2,148,709 2,210,034 - 23,793,603 General and administrative expenses 5,505,303 243,283 2,359,791 8,108,377 Impairment of long-lived assets 628,192 - - 628,192 Loss from operations $ (4,731,420 ) $ (957,287 ) $ (1,315,035 ) $ $ (7,003,742 ) Depreciation and amortization $ 2,042,951 $ - $ 39,866 $ - $ 2,082,817 Total capital expenditures $ 1,406,470 $ - $ 3,176 $ - $ 1,409,646 The following table presents summarized information by segment of the continuing operations for the year ended March 31, 2019: Retail drugstores Online Pharmacy Drug wholesale Herb Total Revenue $ 72,334,409 $ 8,784,459 $ 26,432,144 $ - $ 107,551,012 Cost of goods 51,246,983 7,748,519 23,447,467 - 82,442,969 Gross profit $ 21,087,426 $ 1,035,940 $ 2,984,677 $ - $ 25,108,043 Selling expenses 18,930,118 1,735,966 3,599,100 - 24,265,184 General and administrative expenses 4,072,500 347,516 (2,701,027 ) 1,718,989 Impairment of long-lived assets - - - Loss from operations $ (1,915,192 ) $ (1,047,542 ) $ 2,086,604 $ $ (876,130 ) Depreciation and amortization $ 1,476,903 $ - $ 7,644 $ - $ 1,484,547 Total capital expenditures $ 7,267,847 $ - $ 1,434 $ - $ 7,269,281 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 years ended March 31, 2020 and 2019 were as follows: For the year ended March 31, 2020 2019 Prescription drugs $ 26,045,423 $ 23,516,046 OTC drugs 31,532,248 31,401,328 Nutritional supplements 6,013,622 6,354,108 TCM 5,325,008 6,529,790 Sundry products 1,312,293 941,491 Medical devices 3,852,643 3,591,646 Total $ 74,081,237 $ 72,334,409 The Company's net revenue from external customers through online pharmacy by main product category is as follows: For the year ended March 31, 2020 2019 Prescription drugs $ 1,447,469 $ - OTC drugs 5,721,638 3,127,976 Nutritional supplements 742,809 737,315 TCM 266,638 74,262 Sundry products 2,082,601 2,736,070 Medical devices 3,280,060 2,108,836 Total $ 13,541,215 $ 8,784,459 The Company's net revenue from external customers through wholesale by main product category is as follows: For the years ended March 31, 2020 2019 Prescription drugs $ 24,857,708 $ 16,745,862 OTC drugs 4,196,841 8,964,587 Nutritional supplements 205,881 290,534 TCM 314,769 271,280 Sundry products 43,854 24,846 Medical devices 86,184 135,035 Total $ 29,705,237 $ 26,432,144 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | Note 26 – SUBSEQUENT EVENTS On May 29, 2020, an Investor exercised part of its warrants by purchasing 25,000 shares of common stocks at $3.10 per share. Total proceeds to the Company is $77,500. 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. Concurrently, the Company issued unregistered warrants to the investors in a private placement to purchase up to an aggregate of 3,750,003 shares of common stock at an exercise price of $2.60 per share (the "2020 Warrants"). The 2020 Warrants shall be initially exercisable six months following issuance and expire five and one-half years from the issuance date. H.C. Wainwright & Co., LLC (the "Placement Agent") (or its designees) shall also receive warrants to purchase such number of shares of common stock as is equal to 6.5% of the aggregate number of shares of common stock sold in the offering, or 300,000 warrants, with substantially the same terms as the 2020 Warrants being issued to the investors, except that, among other things, the Placement Agent's warrants will expire on June 1, 2025 and warrants' exercise price shall be $2.57. The recent outbreak of COVID-19, which was declared as a pandemic by the World Health Organization on March 11, 2020, has led to an adverse impacts on the World's economy. At the outbreak of COVID-19, the company has reduced the store hours, supply and customer service. To stay safe, people tend not to shop and entertain as much as in the past. The retail business such as restaurants, hotels and cinema have declined. The peak is in February 2020. However, as the spread of COVID-19 is effectively controlled in China, the business has come back to normal. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of presentation and consolidation | Basis of presentation and consolidation The accompanying 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 financial liability is recorded at fair value and is determined based on unobservable inputs (Level 3) (See Note 22). Active Market Observable Unobservable Total Cash, cash equivalents and restricted cash $ 30,982,606 - - 30,982,606 Financial assets available for sale - - 157,159 157,159 Account receivable 9,770,656 9,770,656 Notes receivable 57,005 57,005 Other receivable 5,069,442 5,069,442 Accounts payable 21,559,494 21,559,494 Notes payable - 26,605,971 - 26,605,971 Other payable 2,522,330 2,522,330 Long-term loan payable 6,403,700 6,403,700 Financial liability 70,507 70,507 Warrants liability - 64,090 - 64,090 Total $ 69,961,533 33,073,761 227,666 103,262,960 |
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 purchasse in the future. At the end of each period, unredeemed membership rewards are reflected as a contract liability. Online pharmacy sales The online pharmacy 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. The Company's revenue is net of VAT collected on behalf of PRC tax authorities in 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. Disaggregation of Revenue The following table disaggregates the Company's revenue by major source in each segment for the years ended March 31, 2020 and 2019: For the year ended March 31 2020 2019 Retail drugstores Prescription drugs $ 26,045,423 $ 23,516,046 OTC drugs 31,532,248 31,401,328 Nutritional supplements 6,013,622 6,354,108 TCM 5,325,008 6,529,790 Sundry products 1,312,293 941,491 Medical devices 3,852,643 3,591,646 Total retail revenue $ 74,081,237 $ 72,334,409 Online pharmacy Prescription drugs $ 1,447,469 $ - OTC drugs 5,721,638 3,127,976 Nutritional supplements 742,809 737,315 TCM 266,638 74,262 Sundry products 2,082,601 2,736,070 Medical devices 3,280,060 2,108,836 Total online revenue $ 13,541,215 $ 8,784,459 Drug wholesale Prescription drugs $ 24,857,708 $ 16,745,862 OTC drugs 4,196,841 8,964,587 Nutritional supplements 205,881 290,534 TCM 314,769 271,280 Sundry products 43,854 24,846 Medical devices 86,184 135,035 Total wholesale revenue $ 29,705,237 $ 26,432,144 Total revenue $ 117,327,689 $ 107,551,012 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: March 31, March 31, Trade receivable(included in accounts receivable, net) $ 9,770,656 $ 8,692,514 Contract liabilities (included in accrued expenses) 1,106,982 1,689,099 |
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 March 31, 2020 and March 31, 2019: March 31, March 31, Cash and cash equivalents $ 16,176,318 $ 9,322,463 Restricted cash 14,806,288 15,422,739 Cash, cash equivalents and restricted cash $ 30,982,606 $ 24,745,202 |
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 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. In the year ended March 31, 2020, the Company evaluated the licenses of insurance applicable drugstores acquired in the past based on their 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 of $628,192 as of March 31, 2020.. |
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. |
Long-term loans | Long-term loans Long-term loans from non-banking financial institutions are stated at their cost. The loan term is up to three years. The Company makes installment payments on principal and interest every month. Interest expense is paid and recorded every month. The principal amount due within a year will be classified as current portion of long-term loan. |
Income taxes | Income taxes The Company follows FASB ASC Topic 740, "Income Taxes," which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The accounting standards clarify the accounting and disclosure requirements for uncertain tax positions and prescribe a recognition threshold and measurement attribute for recognition and measurement of a tax position taken or expected to be taken in a tax return. The accounting standards also provide guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition. No significant penalties, uncertain tax provisions or interest relating to income taxes were incurred during the periods ended March 31, 2020 and 2019. |
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 $262,553 and $1,023,461 for the years ended March 31, 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 March 31, 2020 and 2019 were translated at 1 RMB to 0.1410 USD and at 1 RMB to 0.1490 USD, respectively. The average translation rates applied to income and cash flow statement amounts for years ended March 31, 2020 and 2019 were at 1 RMB to 0.1436 USD and at 1 RMB to 0.1491 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 79,600) per bank. As of March 31, 2020 and March 31, 2019, the Company had deposits totaling $30,974,714 and $24,730,736 that were covered by such limited insurance, respectively. Any balance over RMB 500,000 (USD 79,600) per bank in PRC will not be covered. To date, the Company has not experienced any losses in such accounts. For the fiscal year ended March 31, 2020, two vendors collectively accounted for 50.4% of the Company's total purchases and two suppliers accounted for more than 10% of total advances to suppliers. For the fiscal year ended March 31, 2019, two vendors collectively accounted for 40.3% of the Company's total purchases and two suppliers accounted for more than 10% of total advances to suppliers. For the fiscal year ended March 31, 2020, no customer accounted for more than 10% of the Company's total sales and more than 10% of total accounts receivable. For the fiscal year ended March 31, 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 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 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. Impact of New Lease Standard on Balance Sheet Line Items As a result of applying the new lease standard using a modified retrospective method, the following adjustments were made to accounts on the condensed consolidated balance sheet as of April 1, 2019: Impact of Change in Accounting Policy As Reported Adjusted March 31, Adjustments April 1, Other current assets 2,063,375 (717,414 ) 1,345,961 Total current assets 56,202,981 (717,414 ) 55,485,567 Operating lease right-of-use assets - 15,276,388 15,276,388 Total assets 72,730,636 14,558,974 87,289,610 Current portion of operating lease liabilities - 4,718,610 4,718,610 Total current liabilities 55,212,286 4,718,610 59,930,896 Long-term operating lease liabilities - 9,418,011 9,418,011 Total liabilities 55,759,469 14,136,621 69,896,090 Retained earnings (30,587,468 ) 422,354 (30,165,114 ) Total shareholders' equity 18,165,206 422,354 18,587,560 Total equity 16,971,167 422,354 17,393,521 |
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. Accounting pronouncements not yet effective to adopt In July 2017, the FASB issued ASU No. 2017-11, "Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception". Part I of this Update addresses the complexity of accounting for certain financial instruments with down round features. Part II of this Update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification®. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. ASU No. 2017-11 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. ASU 2017-4 has no impact on its consolidated financial statements. 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 do not expect that the requirements of ASU 2019-12 will have a material impact on its consolidated financial statements. |
Description of Business and O_2
Description of Business and Organization (Tables) | 12 Months Ended |
Mar. 31, 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 ● 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. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of fair values of derivative instruments | Active Market Observable Unobservable Total Cash, cash equivalents and restricted cash $ 30,982,606 - - 30,982,606 Financial assets available for sale - - 157,159 157,159 Account receivable 9,770,656 9,770,656 Notes receivable 57,005 57,005 Other receivable 5,069,442 5,069,442 Accounts payable 21,559,494 21,559,494 Notes payable - 26,605,971 - 26,605,971 Other payable 2,522,330 2,522,330 Long-term loan payable 6,403,700 6,403,700 Financial liability 70,507 70,507 Warrants liability - 64,090 - 64,090 Total $ 69,961,533 33,073,761 227,666 103,262,960 |
Schedule of revenue by major source in each segment | For the year ended March 31 2020 2019 Retail drugstores Prescription drugs $ 26,045,423 $ 23,516,046 OTC drugs 31,532,248 31,401,328 Nutritional supplements 6,013,622 6,354,108 TCM 5,325,008 6,529,790 Sundry products 1,312,293 941,491 Medical devices 3,852,643 3,591,646 Total retail revenue $ 74,081,237 $ 72,334,409 Online pharmacy Prescription drugs $ 1,447,469 $ - OTC drugs 5,721,638 3,127,976 Nutritional supplements 742,809 737,315 TCM 266,638 74,262 Sundry products 2,082,601 2,736,070 Medical devices 3,280,060 2,108,836 Total online revenue $ 13,541,215 $ 8,784,459 Drug wholesale Prescription drugs $ 24,857,708 $ 16,745,862 OTC drugs 4,196,841 8,964,587 Nutritional supplements 205,881 290,534 TCM 314,769 271,280 Sundry products 43,854 24,846 Medical devices 86,184 135,035 Total wholesale revenue $ 29,705,237 $ 26,432,144 Total revenue $ 117,327,689 $ 107,551,012 |
Schedule of receivables and contract liabilities from contracts with customers | March 31, March 31, Trade receivable(included in accounts receivable, net) $ 9,770,656 $ 8,692,514 Contract liabilities (included in accrued expenses) 1,106,982 1,689,099 |
Schedule of cash equivalents and restricted cash | March 31, March 31, Cash and cash equivalents $ 16,176,318 $ 9,322,463 Restricted cash 14,806,288 15,422,739 Cash, cash equivalents and restricted cash $ 30,982,606 $ 24,745,202 |
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 Land use rights 50 years Software 3 years license Infinite |
Schedule of condensed consolidated balance sheet | Impact of Change in Accounting Policy As Reported Adjusted March 31, Adjustments April 1, Other current assets 2,063,375 (717,414 ) 1,345,961 Total current assets 56,202,981 (717,414 ) 55,485,567 Operating lease right-of-use assets - 15,276,388 15,276,388 Total assets 72,730,636 14,558,974 87,289,610 Current portion of operating lease liabilities - 4,718,610 4,718,610 Total current liabilities 55,212,286 4,718,610 59,930,896 Long-term operating lease liabilities - 9,418,011 9,418,011 Total liabilities 55,759,469 14,136,621 69,896,090 Retained earnings (30,587,468 ) 422,354 (30,165,114 ) Total shareholders' equity 18,165,206 422,354 18,587,560 Total equity 16,971,167 422,354 17,393,521 |
Trade Accounts Receivable (Tabl
Trade Accounts Receivable (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Schedule of trade accounts receivable | March 31, March 31, Accounts receivable $ 12,034,726 $ 11,939,364 Less: allowance for doubtful accounts (2,264,070 ) (3,246,850 ) Trade accounts receivable, net $ 9,770,656 $ 8,692,514 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Schedule of other current assets | March 31, March 31, Prepaid rental expenses (1) $ 1,364,975 $ 1,979,852 Prepaid and other current assets 163,565 83,523 Total $ 1,528,540 $ 2,063,375 (1) The balance as of March 31, 2020 includes short-term refundable rental security deposits only, while the balance as of March 31, 2019 includes security deposits of $1,444,026 and prepaid rental of $535,826. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | March 31, March 31, Building $ 5,880,627 $ 6,436,297 Leasehold improvements 9,209,136 8,944,025 Farmland development cost 1,686,430 1,781,627 Office equipment and furniture 5,632,955 5,470,084 Motor vehicles 504,327 551,927 Total 22,913,475 23,183,960 Less: Accumulated depreciation (13,059,852 ) (12,111,409 ) Impairment* (2,219,883 ) (2,345,193 ) Property and equipment, net $ 7,633,740 $ 8,727,358 * The variance of impairment from March 31, 2020 to March 31, 2019 is solely caused by exchange rate variance. |
Long-Term Investment (Tables)
Long-Term Investment (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of long-term investment | March 31, March 31, Kahamadi Bio (1) $ 6,217 * $ 24,243 * Zhetong Medical (2) 2,538,234 - Advance to suppliers, net $ 2,544,451 $ 24,243 (1) It represents 49% investment in Kahamadi Bio. The investment is recorded using equity method. Kahamadi Bio suffered loss in the year ended March 31, 2020. (2) It represents 39% investment in Zhejiang Zhetong Medical Co., Ltd. Zhetong Medical is established in March 2020 and targeted to acquire or cooperate with potential local pharmacies. By attracting more funds from local investors, the Company expects to continue growing its local network in the future. |
Advances to Suppliers (Tables)
Advances to Suppliers (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Advances to Suppliers [Abstract] | |
Schedule of advance to suppliers | March 31, March 31, Advance to suppliers $ 2,198,863 * $ 2,477,226 * Less: allowance for doubtful accounts (1,024,063 )* (526,974 )* Advance to suppliers, net $ 1,174,800 $ 1,950,252 * For the years ended March 31, 2020 and 2019, none of the advances to suppliers were written off against previous allowance for non-refundable advances, respectively. |
Farmland Assets (Tables)
Farmland Assets (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Farmland Assets [Abstract] | |
Schedule of farmland assets | March 31, March 31, 2020 2019 Farmland assets $ 2,177,606 $ 2,341,537 Less: Impairment* (1,435,259 ) (1,516,278 ) Farmland assets, net $ 742,347 $ 825,259 * 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, is approximately $2,416,839. Based on an independent appraisal report, the value of the Ginkgo trees is approximately $796,286. As a result, the Company recorded an agricultural inventory impairment of $1,620,553 as of March 31, 2018. There are no leasehold impairment expense in fiscal 2019 and 2020. |
Other Noncurrent Assets (Tables
Other Noncurrent Assets (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Other Assets, Noncurrent Disclosure [Abstract] | |
Schedule of other noncurrent assets | March 31, March 31, Forest land use rights* $ 994,558 $ 1,103,235 Others 52,205 92,962 Total $ 1,046,763 $ 1,196,197 * The prepayment for lease of forest land use rights is made to a local government in connection with 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 | Years ending March 31, Amount 2020 $ 26,975 2021 26,975 2022 26,975 2023 26,975 2024 26,975 Thereafter 859,683 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Mar. 31, 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 $ 5,471,063 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 $ 21,711,376 Current portion of operating lease liabilities $ 981,090 Long-term operating lease liabilities 19,049,575 Total operating lease liabilities $ 20,030,665 Weighted average remaining lease term Operating leases 3.00 Weighted average discount rate Operating leases 4.19 % |
Schedule of lease liabilities under operating leases | Operating For the year ending March 31, Leases 2020 $ 1,023,767 2021 6,687,126 2022 5,292,371 2023 3,748,801 2024 2,531,061 Thereafter 3,209,053 Total lease payments 22,492,179 Less: imputed interest (2,461,514 ) Total lease liabilities $ 20,030,665 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of net intangible assets | March 31, March 31, License (1) $ 2,220,512 $ 1,909,700 Software (2) 1,083,024 676,336 Land use rights (3) 1,375,095 1,452,718 Total intangible assets 4,678,631 4,038,754 Less: accumulated amortization (667,633 ) (441,431 ) Less: impairment (4) (617,038 ) - Intangible assets, net $ 3,393,960 $ 3,597,323 Amortization expense of intangibles amounted to $254,303 and $228,046 for the years ended March 31, 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, several single stores, and Quannuo Pharmacy. 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. In March 2020, the Company acquired Quannuo Pharmacy, a drugstore chain. The owners of these acquired drugstores agreed to cease their stores' business and liquidate all of the stores' accounts before Jiuzhou Pharmacy acquired them. As a result, Jiuzhou Pharmacy has not obtained any assets or liabilities from the stores, but was able to transfer the certificates to our new stores opened at the same time. (2) They are primarily 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 a 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 March 31, 2020, the SAP system has a net value of $228,133 (RMB1,617,816),the internet Clinic Diagnosis System has a net value of approximately $379,143 (RMB 2,688,709), the Chronic Disease Management System has a net value of approximately $16,411 (RMB116,379) . (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. |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Notes Payable [Abstract] | |
Schedule of credit facilities with banks | Origination Maturity March 31, March 31, Beneficiary Endorser date date 2020 2019 Jiuzhou Pharmacy(1) HUB 11/06/18 05/06/19 - 500,857 Jiuzhou Pharmacy(1) HUB 12/12/18 06/12/19 - 2,236,559 Jiuzhou Pharmacy(1) HUB 12/20/18 06/20/19 - 1,072,606 Jiuzhou Pharmacy(1) HUB 12/29/18 06/29/19 - 5,504,943 Jiuzhou Pharmacy(1) HUB 02/14/18 08/14/19 - 2,587,331 Jiuzhou Pharmacy(1) HUB 03/06/18 09/06/19 - 6,600,727 Jiuxin Medicine(1) HUB 10/11/18 04/11/19 - 4,461,531 Jiuxin Medicine(1) HUB 11/06/18 05/06/19 - 2,987,119 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 07/06/20 129,457 - Jiuzhou Pharmacy(1) HUB 02/19/20 08/19/20 5,105,096 - Jiuzhou Pharmacy(1) HUB 03/10/20 09/10/20 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 09/20/20 1,692,156 - Total $ 26,605,971 $ 25,951,673 (1) As of March 31, 2019, the Company had $25,951,673 (RMB 174,203,868) of notes payable from HUB. The Company is required to hold restricted cash in the amount of $15,114,740 (RMB 101,459,590) with HUB as collateral against these bank notes. Included in the restricted cash is a total of $10,446,381 three-year deposit (RMB 70,122,647) 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. |
Taxes (Tables)
Taxes (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of income arising in or derived from tax jurisdiction which each entity domiciled | Entity Income Tax Jurisdiction Jo-Jo Drugstores United States Renovation Hong Kong, PRC All other entities Mainland, PRC |
Schedule of components of income tax expense | For the year ended March 31, 2020 2019 Current: Federal - - State - - Foreign 16,258 134,763 16,258 134,763 Deferred: Federal - - State - - Foreign - - - - Provision for income taxes 16,258 134,763 |
Schedule of reconciles the U.S. statutory tax rates with the Company's effective tax rate | For the year Ended March 31, 2020 2019 U.S. Statutory rates 21.0 % 21.0 % Foreign income not recognized in the U.S. (21.0 ) (21.0 ) China income taxes 25.0 25.0 Change in valuation allowance (1) (25.0 ) (25.0 ) Non-deductible expenses-permanent difference (2) (0.3 ) (11.4 ) Effective tax rate (0.3 )% (11.4 )% (1) Represents a non-taxable expense reversal due to overall decrease in allowance for accounts receivable and advances to suppliers. (2) The (0.3)% and (11.4)% rate adjustments for the years ended March 31, 2020 and 2019 represent expenses that primarily include stock option expenses and other expenses incurred by the Company that are not deductible for PRC income tax. |
Schedule of net deferred tax assets | As of As of Allowance 948,951 986,665 Long-lived assets impairment 709,230 586,298 Accrued expense 1,443,191 1,569,683 Net operating loss carry forward 1,157,900 1,164,735 Foreign Tax Credit Carryover 195,000 195,000 Total deferred tax assets (liabilities): 4,454,272 4,502,381 Valuation allowance (4,454,272 ) (4,502,381 ) Net deferred tax assets (liabilities) - - |
Related Party Transactions an_2
Related Party Transactions and Arrangements (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of amounts payable to related parties | March 31, March 31, Due to a director and CEO (1) 490,218 795,179 (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. |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Warrants [Abstract] | |
Schedule of estimated fair value of warrants using the binominal pricing model | Common Stock Common Stock March 31, March 31, Stock price $ 1.77 $ 2.62 Exercise price $ 3.10 $ 3.10 Annual dividend yield - % - % Expected term (years) 0.81 1.80 Risk-free interest rate 0.71 % 2.27 % Expected volatility 62.08 % 67.69 % (1) As of March 31, 2020, the warrants had not been exercised. |
Loss Per Share (Tables)
Loss Per Share (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Loss Per Share [Abstract] | |
Schedule of reconciliation of the basic and diluted (loss) earnings per share | The year ended 2020 2019 Net income attributable to controlling interest $ (5,813,369 ) $ (926,278 ) Weighted average shares used in basic computation 32,816,567 28,936,778 Diluted effect of stock options and warrants Weighted average shares used in diluted computation 32,816,567 28,936,778 Income per share – Basic: Net income before noncontrolling interest $ (0.18 ) $ (0.03 ) Add: Net loss attributable to noncontrolling interest $ - $ - Net income attributable to controlling interest $ (0.18 ) $ (0.03 ) Loss per share – Diluted: Net income before noncontrolling interest $ (0.18 ) $ (0.03 ) Add: Net income attributable to noncontrolling interest $ - $ - Net income attributable to controlling interest $ (0.18 ) $ (0.03 ) |
Segments (Tables)
Segments (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Summary of segment of the continuing operations | Retail drugstores Online Pharmacy Drug wholesale Herb Total Revenue $ 74,081,237 $ 13,541,215 $ 29,705,237 $ - $ 117,327,689 Cost of goods 53,244,302 12,106,510 26,450,447 - 91,801,259 Gross profit $ 20,836,935 $ 1,434,705 $ 3,254,790 $ - $ 25,526,430 Selling expenses 19,434,860 2,148,709 2,210,034 - 23,793,603 General and administrative expenses 5,505,303 243,283 2,359,791 8,108,377 Impairment of long-lived assets 628,192 - - 628,192 Loss from operations $ (4,731,420 ) $ (957,287 ) $ (1,315,035 ) $ $ (7,003,742 ) Depreciation and amortization $ 2,042,951 $ - $ 39,866 $ - $ 2,082,817 Total capital expenditures $ 1,406,470 $ - $ 3,176 $ - $ 1,409,646 Retail drugstores Online Pharmacy Drug wholesale Herb Total Revenue $ 72,334,409 $ 8,784,459 $ 26,432,144 $ - $ 107,551,012 Cost of goods 51,246,983 7,748,519 23,447,467 - 82,442,969 Gross profit $ 21,087,426 $ 1,035,940 $ 2,984,677 $ - $ 25,108,043 Selling expenses 18,930,118 1,735,966 3,599,100 - 24,265,184 General and administrative expenses 4,072,500 347,516 (2,701,027 ) 1,718,989 Impairment of long-lived assets - - - Loss from operations $ (1,915,192 ) $ (1,047,542 ) $ 2,086,604 $ $ (876,130 ) Depreciation and amortization $ 1,476,903 $ - $ 7,644 $ - $ 1,484,547 Total capital expenditures $ 7,267,847 $ - $ 1,434 $ - $ 7,269,281 |
Summary of net revenue from external customers through its retail drugstores by main products | For the year ended March 31, 2020 2019 Prescription drugs $ 26,045,423 $ 23,516,046 OTC drugs 31,532,248 31,401,328 Nutritional supplements 6,013,622 6,354,108 TCM 5,325,008 6,529,790 Sundry products 1,312,293 941,491 Medical devices 3,852,643 3,591,646 Total $ 74,081,237 $ 72,334,409 For the year ended March 31, 2020 2019 Prescription drugs $ 1,447,469 $ - OTC drugs 5,721,638 3,127,976 Nutritional supplements 742,809 737,315 TCM 266,638 74,262 Sundry products 2,082,601 2,736,070 Medical devices 3,280,060 2,108,836 Total $ 13,541,215 $ 8,784,459 For the years ended March 31, 2020 2019 Prescription drugs $ 24,857,708 $ 16,745,862 OTC drugs 4,196,841 8,964,587 Nutritional supplements 205,881 290,534 TCM 314,769 271,280 Sundry products 43,854 24,846 Medical devices 86,184 135,035 Total $ 29,705,237 $ 26,432,144 |
Description of Business and O_3
Description of Business and Organization (Details) | 12 Months Ended | |
Mar. 31, 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 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. |
Description of Business and O_4
Description of Business and Organization (Details Textual) | 1 Months Ended | 12 Months Ended | ||||||||
Sep. 17, 2009shares | Mar. 31, 2020USD ($) | Mar. 31, 2020CNY (¥) | Jan. 09, 2020$ / shares | Mar. 29, 2019 | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Apr. 20, 2018USD ($) | Apr. 20, 2018CNY (¥) | May 31, 2016 | |
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 Investment Management [Member] | ||||||||||
Description of Business and Organization (Textual) | ||||||||||
Registered capital paid | $ | $ 14,500,000 | |||||||||
Zhejiang Shouantang Medical Technology [Member] | ||||||||||
Description of Business and Organization (Textual) | ||||||||||
Registered capital paid | $ | 20,000,000 | |||||||||
Registered capital requirement reduced | $ | $ 11,000,000 | |||||||||
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 | |||||||||
Hangzhou Jiuzhou Grand Pharmacy Chain [Member] | ||||||||||
Description of Business and Organization (Textual) | ||||||||||
Percentage of capital stock in exchange transaction | 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 | |||||||||
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% | |||||||||
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 Qianhong Agriculture Development [Member] | RMB [Member] | ||||||||||
Description of Business and Organization (Textual) | ||||||||||
Registered capital paid | 10,000,000 | |||||||||
Lin Jiuzhou [Member] | RMB [Member] | ||||||||||
Description of Business and Organization (Textual) | ||||||||||
Registered capital paid | 5,000,000 | |||||||||
Hangzhou Jiuzhou Medical and Public Health Service [Member] | RMB [Member] | ||||||||||
Description of Business and Organization (Textual) | ||||||||||
Registered capital paid | ¥ 20,000,000 | |||||||||
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 | |||||||||
Hangzhou Jiutong Medical Technology [Member] | ||||||||||
Description of Business and Organization (Textual) | ||||||||||
Registered capital paid | $ | $ 2,600,000 | |||||||||
Hangzhou Jiuyi Medical Technology [Member] | ||||||||||
Description of Business and Organization (Textual) | ||||||||||
Percentage of capital stock in exchange transaction | 100.00% | 100.00% | ||||||||
Jiuxin Medicine [Member] | ||||||||||
Description of Business and Organization (Textual) | ||||||||||
Percentage of capital stock in exchange transaction | 10.00% | 10.00% | 10.00% | 10.00% | ||||||
Ayi Health [Member] | RMB [Member] | ||||||||||
Description of Business and Organization (Textual) | ||||||||||
Registered capital paid | $ | $ 10,000,000 | |||||||||
Lin'An Jiuzhou [Member] | RMB [Member] | ||||||||||
Description of Business and Organization (Textual) | ||||||||||
Registered capital paid | $ | $ 5,000,000 |
Liquidity (Details)
Liquidity (Details) | Jun. 03, 2020USD ($)$ / sharesshares | Apr. 15, 2019USD ($)$ / sharesshares | Mar. 31, 2020USD ($) | Mar. 31, 2020CNY (¥) |
Liquidity (Textual) | ||||
Bank credit line from two local banks | $ 27,140,000 | |||
Two credit line agreements [Member] | ||||
Liquidity (Textual) | ||||
Bank credit line from two local banks | 530,000 | |||
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 | 4,000,008 | |||
Common stock price, per share | $ / shares | $ 2.50 | |||
Gross proceeds from private placement | $ 10,000,020 | |||
Private Placement [Member] | Subsequent Event [Member] | ||||
Liquidity (Textual) | ||||
Purchase of aggregate of common stock | shares | 5,000,004 | |||
Common stock price, per share | $ / shares | $ 2 | |||
Gross proceeds from private placement | $ 10,000,008 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 |
Summary of fair values of derivative instruments | ||
Cash, cash equivalents and restricted cash | $ 30,982,606 | |
Financial assets available for sale | 157,159 | $ 180,928 |
Account receivable | 9,770,656 | |
Notes receivable | 57,005 | |
Other receivable | 5,069,442 | |
Accounts payable | 21,559,494 | |
Notes payable | 26,605,971 | |
Other payable | 2,522,330 | |
Long-term loan payable | 6,403,700 | |
Financial liability | 70,507 | |
Warrants liability | 64,090 | |
Total | 103,262,960 | |
Active Market for Identical Assets (Level 1) [Member] | ||
Summary of fair values of derivative instruments | ||
Cash, cash equivalents and restricted cash | 30,982,606 | |
Financial assets available for sale | ||
Account receivable | 9,770,656 | |
Notes receivable | 57,005 | |
Other receivable | 5,069,442 | |
Accounts payable | 21,559,494 | |
Notes payable | ||
Other payable | 2,522,330 | |
Warrants liability | ||
Total | 69,961,533 | |
Observable Inputs (Level 2) [Member] | ||
Summary of fair values of derivative instruments | ||
Cash, cash equivalents and restricted cash | ||
Financial assets available for sale | ||
Notes payable | 26,605,971 | |
Long-term loan payable | 6,403,700 | |
Warrants liability | 64,090 | |
Total | 33,073,761 | |
Unobservable Inputs (Level 3) [Member] | ||
Summary of fair values of derivative instruments | ||
Cash, cash equivalents and restricted cash | ||
Financial assets available for sale | 157,159 | |
Notes payable | ||
Financial liability | 70,507 | |
Warrants liability | ||
Total | $ 227,666 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 117,327,689 | $ 107,551,012 |
Retail Store [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 74,081,237 | 72,334,409 |
Retail Store [Member] | Prescription Drugs [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 26,045,423 | 23,516,046 |
Retail Store [Member] | OTC drugs [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 31,532,248 | 31,401,328 |
Retail Store [Member] | Nutritional supplements [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 6,013,622 | 6,354,108 |
Retail Store [Member] | Traditional Chinese Medicine [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 5,325,008 | 6,529,790 |
Retail Store [Member] | Sundry products [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 1,312,293 | 941,491 |
Retail Store [Member] | Medical devices [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 3,852,643 | 3,591,646 |
Online Pharmacy [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 13,541,215 | 8,784,459 |
Online Pharmacy [Member] | Prescription Drugs [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 1,447,469 | |
Online Pharmacy [Member] | OTC drugs [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 5,721,638 | 3,127,976 |
Online Pharmacy [Member] | Nutritional supplements [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 742,809 | 737,315 |
Online Pharmacy [Member] | Traditional Chinese Medicine [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 266,638 | 74,262 |
Online Pharmacy [Member] | Sundry products [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 2,082,601 | 2,736,070 |
Online Pharmacy [Member] | Medical devices [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 3,280,060 | 2,108,836 |
Drug Wholesale [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 29,705,237 | 26,432,144 |
Drug Wholesale [Member] | Prescription Drugs [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 24,857,708 | 16,745,862 |
Drug Wholesale [Member] | OTC drugs [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 4,196,841 | 8,964,587 |
Drug Wholesale [Member] | Nutritional supplements [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 205,881 | 290,534 |
Drug Wholesale [Member] | Traditional Chinese Medicine [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 314,769 | 271,280 |
Drug Wholesale [Member] | Sundry products [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 43,854 | 24,846 |
Drug Wholesale [Member] | Medical devices [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 86,184 | $ 135,035 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 |
Accounting Policies [Abstract] | ||
Trade receivable(included in accounts receivable, net) | $ 9,770,656 | $ 8,692,514 |
Contract liabilities (included in accrued expenses) | $ 1,106,982 | $ 1,689,099 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details 3) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 |
Accounting Policies [Abstract] | |||
Cash and cash equivalents | $ 16,176,318 | $ 9,322,463 | |
Restricted cash | 14,806,288 | 15,422,739 | |
Cash, cash equivalents and restricted cash | $ 30,982,606 | $ 24,745,202 | $ 31,452,191 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details 4) | 12 Months Ended |
Mar. 31, 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 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies (Details 5) | 12 Months Ended |
Mar. 31, 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 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies (Details 6) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Other current assets | $ 1,528,540 | $ 2,063,375 | |
Total current assets | 60,987,212 | 56,202,981 | |
Operating lease right-of-use assets | 21,711,376 | ||
Total assets | 99,516,233 | 72,730,636 | |
Current portion of operating lease liabilities | 981,090 | ||
Total current liabilities | 57,437,974 | 55,212,286 | |
Long-term operating lease liabilities | 19,049,575 | ||
Total liabilities | 80,738,104 | 55,759,469 | |
Retained earnings | (36,400,837) | (30,587,468) | |
Total shareholders' equity | 20,590,934 | 18,165,206 | $ 18,862,405 |
Total equity | 18,778,129 | $ 16,971,167 | |
Adjustments [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Other current assets | (717,414) | ||
Total current assets | (717,414) | ||
Operating lease right-of-use assets | 15,276,388 | ||
Total assets | 14,558,974 | ||
Current portion of operating lease liabilities | 4,718,610 | ||
Total current liabilities | 4,718,610 | ||
Long-term operating lease liabilities | 9,418,011 | ||
Total liabilities | 14,136,621 | ||
Retained earnings | 422,354 | ||
Total shareholders' equity | 422,354 | ||
Total equity | 422,354 | ||
Adjusted [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Other current assets | 1,345,961 | ||
Total current assets | 55,485,567 | ||
Operating lease right-of-use assets | 15,276,388 | ||
Total assets | 87,289,610 | ||
Current portion of operating lease liabilities | 4,718,610 | ||
Total current liabilities | 59,930,896 | ||
Long-term operating lease liabilities | 9,418,011 | ||
Total liabilities | 69,896,090 | ||
Retained earnings | (30,165,114) | ||
Total shareholders' equity | 18,587,560 | ||
Total equity | $ 17,393,521 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies (Details Textual) | 12 Months Ended | ||||
Mar. 31, 2020USD ($)VendorsSuppliers | Mar. 31, 2019USD ($)VendorsSuppliers | Apr. 02, 2019USD ($) | Mar. 31, 2015USD ($) | Mar. 31, 2015CNY (¥) | |
Summary of Significant Accounting Policies (Textual) | |||||
Ownership percentage | 100.00% | ||||
Voting ownership interest | 50.00% | ||||
Value added tax, percentage | 17.00% | ||||
Impairment of long lived assets | $ 628,192 | ||||
Advertising and promotion costs | $ 262,553 | 1,023,461 | |||
Foreign currency translation, description | The balance sheet amounts, with the exception of equity, at March 31, 2020 and 2019 were translated at 1 RMB to 0.1410 USD and at 1 RMB to 0.1490 USD, respectively. The average translation rates applied to income and cash flow statement amounts for years ended March 31, 2020 and 2019 were at 1 RMB to 0.1436 USD and at 1 RMB to 0.1491 USD, respectively. | ||||
Insurance covered by own bank | $ 79,600 | ||||
Bank uncovered amount | $ 79,600 | ||||
Deposits | $ 30,974,714 | $ 24,730,736 | |||
Retained earnings | $ 422,354 | ||||
Weighted average remaining lease term | 3 years | ||||
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 | 50.40% | 40.30% | |||
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 | Suppliers | 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 |
Financial Assets Available fo_2
Financial Assets Available for Sale (Details) | Mar. 31, 2020USD ($) | Mar. 31, 2020CNY (¥) | Mar. 31, 2019USD ($) | Mar. 31, 2019CNY (¥) |
Financial Assets Available for Sale (Textual) | ||||
Financial assets available for sale | $ 157,159 | $ 180,928 | ||
Invested total amount | 14,538 | |||
Additionally remaining balance | 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 | ¥ 1,214,500 | ||
Invested total amount | 100,000 | |||
Additionally remaining balance | $ 514,500 | |||
RMB [Member] | Songlu Pharmaceutical [Member] | ||||
Financial Assets Available for Sale (Textual) | ||||
Invested total amount | ¥ | ¥ 600,000 |
Trade Accounts Receivable (Deta
Trade Accounts Receivable (Details) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 |
Receivables [Abstract] | ||
Accounts receivable | $ 12,034,726 | $ 11,939,364 |
Less: allowance for doubtful accounts | (2,264,070) | (3,246,850) |
Trade accounts receivable, net | $ 9,770,656 | $ 8,692,514 |
Trade Accounts Receivable (De_2
Trade Accounts Receivable (Details Textual) - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Trade Accounts Receivable (Textual) | ||
Accounts receivable written off | $ 212,338 | $ 146,593 |
Trade accounts receivable pledged as collateral for borrowings | $ 627,055 |
Other Current Assets (Details)
Other Current Assets (Details) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 | |
Other Current Assets [Abstract] | |||
Prepaid rental expenses | $ 1,364,975 | [1] | $ 1,979,852 |
Prepaid and other current assets | 163,565 | 83,523 | |
Total | $ 1,528,540 | $ 2,063,375 | |
[1] | The balance as of March 31, 2020 includes short-term refundable rental security deposits only, while the balance as of March 31, 2019 includes security deposits of $1,444,026 and prepaid rental of $535,826. |
Other Current Assets (Details T
Other Current Assets (Details Textual) - USD ($) | Mar. 31, 2020 | [1] | Mar. 31, 2019 |
Other Current Assets (Textual) | |||
Security deposits | $ 1,444,026 | ||
Prepaid rental | $ 1,364,975 | $ 1,979,852 | |
[1] | The balance as of March 31, 2020 includes short-term refundable rental security deposits only, while the balance as of March 31, 2019 includes security deposits of $1,444,026 and prepaid rental of $535,826. |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Total | $ 22,913,475 | $ 23,183,960 | |
Less: Accumulated depreciation | (13,059,852) | (12,111,409) | |
Impairment | [1] | (2,219,883) | (2,345,193) |
Property and equipment, net | 7,633,740 | 8,727,358 | |
Building [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total | 5,880,627 | 6,436,297 | |
Leasehold improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total | 9,209,136 | 8,944,025 | |
Farmland development cost [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total | 1,686,430 | 1,781,627 | |
Office equipment and furniture [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total | 5,632,955 | 5,470,084 | |
Motor vehicles [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total | $ 504,327 | $ 551,927 | |
[1] | The variance of impairment from March 31, 2020 to March 31, 2019 is solely caused by exchange rate variance. |
Property and Equipment (Detai_2
Property and Equipment (Details Textual) - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Property and Equipment (Textual) | ||
Depreciation expenses for property and equipment | $ 1,828,514 | $ 1,221,520 |
Long-Term Investment (Details)
Long-Term Investment (Details) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 | |
Advance to suppliers, net | $ 2,544,451 | $ 24,243 | |
Kahamadi Bio [Member] | |||
Advance to suppliers, net | [1] | 6,217 | 24,243 |
Zhetong Medical [Member] | |||
Advance to suppliers, net | [2] | $ 2,538,234 | |
[1] | It represents 49% investment in Kahamadi Bio. The investment is recorded using equity method. Kahamadi Bio suffered loss in the year ended March 31, 2020. | ||
[2] | It represents 39% investment in Zhejiang Zhetong Medical Co., Ltd. Zhetong Medical is established in March 2020 and targeted to acquire or cooperate with potential local pharmacies. By attracting more funds from local investors, the Company expects to continue growing its local network in the future. |
Long-Term Investment (Details T
Long-Term Investment (Details Textual) | Mar. 31, 2020 |
Kahamadi Bio [Member] | |
Long-Term Investment (Textual) | |
Investment percentage | 49.00% |
Zhetong Medical [Member] | |
Long-Term Investment (Textual) | |
Investment percentage | 39.00% |
Advances to Suppliers (Details)
Advances to Suppliers (Details) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 | |
Advances to Suppliers [Abstract] | |||
Advance to suppliers | [1] | $ 2,198,863 | $ 2,477,226 |
Less: allowance for doubtful accounts | [1] | (1,024,063) | (526,974) |
Advance to suppliers, net | $ 1,174,800 | $ 1,950,252 | |
[1] | For the years ended March 31, 2020 and 2019, none of the advances to suppliers were written off against previous allowance for non-refundable advances, respectively. |
Inventory (Details)
Inventory (Details) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 |
Inventory (Textual) | ||
Finished goods | $ 12,247,004 | $ 13,955,202 |
Farmland Assets (Details)
Farmland Assets (Details) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 | |
Farmland Assets [Abstract] | |||
Farmland assets | $ 2,177,606 | $ 2,341,537 | |
Less: Impairment | [1] | (1,435,259) | (1,516,278) |
Farmland assets, net | $ 742,347 | $ 825,259 | |
[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, is approximately $2,416,839. Based on an independent appraisal report, the value of the Ginkgo trees is approximately $796,286. As a result, the Company recorded an agricultural inventory impairment of $1,620,553 as of March 31, 2018. There are no leasehold impairment expense in fiscal 2019 and 2020. |
Long Term Deposits, Landlords (
Long Term Deposits, Landlords (Details) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 |
Long Term Deposits, Landlords [Abstract] | ||
Long term deposits | $ 1,456,384 | $ 2,157,275 |
Other Noncurrent Assets (Detail
Other Noncurrent Assets (Details) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 | |
Other Assets, Noncurrent Disclosure [Abstract] | |||
Forest land use rights | [1] | $ 994,558 | $ 1,103,235 |
Others | 52,205 | 92,962 | |
Total | $ 1,046,763 | $ 1,196,197 | |
[1] | The prepayment for lease of forest land use rights is made to a local government in connection with 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. |
Other Noncurrent Assets (Deta_2
Other Noncurrent Assets (Details 1) | Mar. 31, 2020USD ($) |
Other Assets, Noncurrent Disclosure [Abstract] | |
2020 | $ 26,975 |
2021 | 26,975 |
2022 | 26,975 |
2023 | 26,975 |
2024 | 26,975 |
Thereafter | $ 859,683 |
Other Noncurrent Assets (Deta_3
Other Noncurrent Assets (Details Textual) - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Other Noncurrent Assets (Textual) | ||
Amortization of prepayment for lease of land use right | $ 26,975 | $ 28,071 |
Description of lease prepayment life | Extends the life of the lease to January 31, 2060. |
Leases (Details)
Leases (Details) | Mar. 31, 2020USD ($) |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows paid for operating leases | $ 5,471,063 |
Right-of-use assets obtained in exchange for lease obligations: | |
Operating leases |
Leases (Details 1)
Leases (Details 1) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 |
Operating leases: | ||
Operating lease right-of-use assets | $ 21,711,376 | |
Current portion of operating lease liabilities | 981,090 | |
Long-term operating lease liabilities | 19,049,575 | |
Total operating lease liabilities | $ 20,030,665 | |
Weighted average remaining lease term, Operating leases | 3 years | |
Weighted average discount rate, Operating leases | 4.19% |
Leases (Details 2)
Leases (Details 2) | Mar. 31, 2020USD ($) |
Leases [Abstract] | |
2020 | $ 1,023,767 |
2021 | 6,687,126 |
2022 | 5,292,371 |
2023 | 3,748,801 |
2024 | 2,531,061 |
Thereafter | 3,209,053 |
Total lease payments | 22,492,179 |
Less: imputed interest | (2,461,514) |
Total lease liabilities | $ 20,030,665 |
Leases (Details Textual)
Leases (Details Textual) | 12 Months Ended |
Mar. 31, 2020USD ($) | |
Leases (Textual) | |
Operating lease cost | $ 5,471,063 |
Minimum [Member] | |
Leases (Textual) | |
Operating lease initial terms | 3 years |
Maximum [Member] | |
Leases (Textual) | |
Operating lease initial terms | 10 years |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Total intangible assets | $ 4,678,631 | $ 4,038,754 | |
Less: accumulated amortization | (667,633) | (441,431) | |
Less: impairment | [1] | (617,038) | |
Intangible assets, net | 3,393,960 | 3,597,323 | |
License [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Total intangible assets | [2] | 2,220,512 | 1,909,700 |
Software [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Total intangible assets | [3] | 1,083,024 | 676,336 |
Land use rights [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Total intangible assets | [4] | $ 1,375,095 | $ 1,452,718 |
[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. | ||
[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. In March 2020, the Company acquired a local drugstore chain. The owners of these acquired drugstores agreed to cease their stores' business and liquidate all of the stores' accounts before Jiuzhou Pharmacy acquired them. As a result, Jiuzhou Pharmacy has not obtained any assets or liabilities from the stores, but was able to transfer the certificates to our new stores opened at the same time. | ||
[3] | They are primarily 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 a 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 March 31, 2020, the SAP system has a net value of $228,133 (RMB1,617,816),the internet Clinic Diagnosis System has a net value of approximately $379,143 (RMB 2,688,709), the Chronic Disease Management System has a net value of approximately $16,411 (RMB116,379) . | ||
[4] | In July 2013, the Company purchased the land use rights of a plot of land in Lin'an, Hangzhou, intended for the establishment of an herb processing plant in the future. However, as the Company's farming business in Lin'an has not grown, the Company does not expect completion of the plant in the near future. |
Intangible Assets (Details Text
Intangible Assets (Details Textual) | 12 Months Ended | |||
Mar. 31, 2020USD ($) | Mar. 31, 2020CNY (¥) | Mar. 31, 2019USD ($) | Mar. 31, 2020CNY (¥) | |
Intangible Assets (Textual) | ||||
Amortization expense | $ 254,303 | $ 228,046 | ||
Internet Clinic Diagnosis System [Member] | ||||
Intangible Assets (Textual) | ||||
Amortization expense | 228,133 | |||
Intangible assets, net | 379,143 | |||
Internet Clinic Diagnosis System [Member] | RMB [Member] | ||||
Intangible Assets (Textual) | ||||
Amortization expense | ¥ | ¥ 1,617,816 | |||
Intangible assets, net | ¥ | ¥ 2,688,709 | |||
Chronic Disease Costs [Member] | ||||
Intangible Assets (Textual) | ||||
Amortization expense | $ 16,411 | |||
Chronic Disease Costs [Member] | RMB [Member] | ||||
Intangible Assets (Textual) | ||||
Amortization expense | ¥ | ¥ 116,379 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Short-term Debt [Line Items] | |||
Notes payable | $ 26,605,971 | $ 25,951,673 | |
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 11/06/18 [Member] | |||
Short-term Debt [Line Items] | |||
Maturity date | [1] | May 6, 2019 | |
Notes payable | 500,857 | ||
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 12/12/18 [Member] | |||
Short-term Debt [Line Items] | |||
Maturity date | [1] | Jun. 12, 2019 | |
Notes payable | 2,236,559 | ||
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 12/20/18 [Member] | |||
Short-term Debt [Line Items] | |||
Maturity date | [1] | Jun. 20, 2019 | |
Notes payable | 1,072,606 | ||
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 12/29/18 [Member] | |||
Short-term Debt [Line Items] | |||
Maturity date | [1] | Jun. 29, 2019 | |
Notes payable | 5,504,943 | ||
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 02/14/18 [Member] | |||
Short-term Debt [Line Items] | |||
Maturity date | [1] | Aug. 14, 2019 | |
Notes payable | 2,587,331 | ||
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 03/06/18 [Member] | |||
Short-term Debt [Line Items] | |||
Maturity date | [1] | Sep. 6, 2019 | |
Notes payable | 6,600,727 | ||
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 01/06/20 [Member] | |||
Short-term Debt [Line Items] | |||
Maturity date | [1] | Jul. 6, 2020 | |
Notes payable | $ 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 | $ 5,105,096 | ||
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 03/10/20 [Member] | |||
Short-term Debt [Line Items] | |||
Maturity date | [1] | Sep. 10, 2020 | |
Notes payable | $ 5,324,871 | ||
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 10/09/19 [Member] | |||
Short-term Debt [Line Items] | |||
Maturity date | [1] | Apr. 9, 2020 | |
Notes payable | $ 3,478,259 | ||
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 11/06/19 [Member] | |||
Short-term Debt [Line Items] | |||
Maturity date | [1] | May 6, 2020 | |
Notes payable | $ 164,582 | ||
Hangzhou United Bank [Member] | Jiuzhou Pharmacy [Member] | 12/05/19 [Member] | |||
Short-term Debt [Line Items] | |||
Maturity date | [1] | Jun. 5, 2020 | |
Notes payable | $ 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 | $ 2,289,308 | ||
Hangzhou United Bank [Member] | Jiuxin Medicine [Member] | 10/11/18 [Member] | |||
Short-term Debt [Line Items] | |||
Maturity date | [1] | Apr. 11, 2019 | |
Notes payable | 4,461,531 | ||
Hangzhou United Bank [Member] | Jiuxin Medicine [Member] | 11/06/18 [Member] | |||
Short-term Debt [Line Items] | |||
Maturity date | [1] | May 6, 2019 | |
Notes payable | $ 2,987,119 | ||
Hangzhou United Bank [Member] | Jiuxin Medicine [Member] | 12/26/19 [Member] | |||
Short-term Debt [Line Items] | |||
Maturity date | [1] | Jun. 26, 2020 | |
Notes payable | $ 1,371,992 | ||
Hangzhou United Bank [Member] | Jiuxin Medicine [Member] | 12/31/19 [Member] | |||
Short-term Debt [Line Items] | |||
Maturity date | [1] | Jun. 30, 2020 | |
Notes payable | $ 3,943,776 | ||
Hangzhou United Bank [Member] | Jiuxin Medicine [Member] | 03/31/20 [Member] | |||
Short-term Debt [Line Items] | |||
Maturity date | [1] | Sep. 20, 2020 | |
Notes payable | $ 1,692,156 | ||
[1] | As of March 31, 2019, the Company had $25,951,673 (RMB 174,203,868) of notes payable from HUB. The Company is required to hold restricted cash in the amount of $15,114,740 (RMB 101,459,590) with HUB as collateral against these bank notes. Included in the restricted cash is a total of $10,446,381 three-year deposit (RMB 70,122,647) 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 $8,763,958 three-year deposit (RMB 62,150,000) deposited into HUB as a collateral for current and future notes payable from HUB. |
Notes Payable (Details Textual)
Notes Payable (Details Textual) | 12 Months Ended | |||
Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2020CNY (¥) | Mar. 31, 2019CNY (¥) | |
Notes Payable (Textual) | ||||
Notes payable | $ 26,610,000 | |||
Restricted cash | 5,830,000 | |||
Line of credit total | 27,140,000 | |||
Bank credit line facilities available for borrowing | $ 530,000 | |||
Term of deposit | 3 years | |||
Deposit amont | $ 8,760,000 | |||
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 | 26,605,971 | $ 25,951,673 | ||
Restricted cash | 14,596,179 | 15,114,740 | ||
Hangzhou United Bank [Member] | Notes Payable to Banks [Member] | RMB [Member] | ||||
Notes Payable (Textual) | ||||
Notes payable | ¥ | ¥ 188,677,437 | ¥ 174,203,868 | ||
Restricted cash | ¥ | 103,509,456 | 101,459,590 | ||
Hangzhou United Bank One [Member] | Notes Payable to Banks [Member] | ||||
Notes Payable (Textual) | ||||
Restricted cash | $ 8,763,958 | $ 10,446,381 | ||
Term of deposit | 3 years | 3 years | ||
Hangzhou United Bank One [Member] | Notes Payable to Banks [Member] | RMB [Member] | ||||
Notes Payable (Textual) | ||||
Restricted cash | ¥ | ¥ 62,150,000 | ¥ 70,122,647 |
Loan Payable (Details)
Loan Payable (Details) - USD ($) | Dec. 11, 2019 | Aug. 02, 2019 | Mar. 31, 2020 | Mar. 31, 2019 |
Loan Payable (Textual) | ||||
Loans payable, description | 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 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. | ||
Remaining loan balance | $ 6,403,700 | |||
Monthly repayment due | $ 2,287,742 |
Taxes (Details)
Taxes (Details) | 12 Months Ended |
Mar. 31, 2020 | |
Jo-Jo Drugstores [Member] | |
Income Taxes [Line Items] | |
Income Tax Jurisdiction | United States |
Renovation [Member] | |
Income Taxes [Line Items] | |
Income Tax Jurisdiction | Hong Kong, PRC |
All Other Entities [Member] | |
Income Taxes [Line Items] | |
Income Tax Jurisdiction | Mainland, PRC |
Taxes (Details 1)
Taxes (Details 1) - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Current: | ||
Federal | ||
State | ||
Foreign | 16,258 | 134,763 |
Total | 16,258 | 134,763 |
Deferred: | ||
Federal | ||
State | ||
Foreign | ||
Total | ||
Provision for income taxes | $ 16,258 | $ 134,763 |
Taxes (Details 2)
Taxes (Details 2) | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Income Tax Disclosure [Abstract] | |||
U.S. Statutory rates | 21.00% | 21.00% | |
Foreign income not recognized in the U.S. | (21.00%) | (21.00%) | |
China income taxes | 25.00% | 25.00% | |
Change in valuation allowance | [1] | (25.00%) | (25.00%) |
Non-deductible expenses-permanent difference | [2] | (0.30%) | (11.40%) |
Effective tax rate | (0.30%) | (11.40%) | |
[1] | Represents a non-taxable expense reversal due to overall decrease in allowance for accounts receivable and advances to suppliers. | ||
[2] | The (0.3)% and (11.4)% rate adjustments for the years ended March 31, 2020 and 2019 represent expenses that primarily include stock option expenses and other expenses incurred by the Company that are not deductible for PRC income tax. |
Taxes (Details 3)
Taxes (Details 3) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Allowance | $ 948,951 | $ 986,665 |
Long-lived assets impairment | 709,230 | 586,298 |
Accrued expense | 1,443,191 | 1,569,683 |
Net operating loss carry forward | 1,157,900 | 1,164,735 |
Foreign tax credit carryover | 195,000 | 195,000 |
Total deferred tax assets (liabilities): | 4,454,272 | 4,502,381 |
Valuation allowance | (4,454,272) | (4,502,381) |
Net deferred tax assets (liabilities) |
Taxes (Details Textual)
Taxes (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | |
Dec. 22, 2017 | Mar. 31, 2020 | Mar. 31, 2019 | |
Taxes (Textual) | |||
Effective tax rate | (0.30%) | (11.40%) | |
Foreign tax credit | $ 195,000 | ||
Income tax, description | The U.S. federal statutory rate from 35% to 21%, effective on January 1, 2018. ASC 740 requires companies to recognize the effect of tax law changes in the period of enactment, accordingly, the effects must be recognized on companies' calendar year-end financial statements, even though the effective date for most provisions is January 1, 2018. As a result, we re-measured our net U.S. deferred tax assets at the 21% future tax rate. | Audit periods remain open for review until the statute of limitations has passed, which in the PRC is usually 5 years as the Company's most significant tax jurisdiction. | |
Net unrecognized tax benefits | $ 0 | ||
Hong Kong Income Tax [Member] | |||
Taxes (Textual) | |||
Estimated net operating loss carry forwards for U.S. income tax purposes | 2,248,203 | $ 1,960,933 | |
Us Income Tax [Member] | |||
Taxes (Textual) | |||
Estimated net operating loss carry forwards for U.S. income tax purposes | $ 816,908 | 816,908 | |
Expiration date | Mar. 31, 2032 | ||
China Income Tax [Member] | |||
Taxes (Textual) | |||
Estimated net operating loss carry forwards for U.S. income tax purposes | $ 2,461,582 | $ 2,678,523 |
Postretirement Benefits (Detail
Postretirement Benefits (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Employee Social Benefits (Textual) | ||
Employment benefits and pension contribution | $ 1,341,167 | $ 1,423,449 |
Related Party Transactions an_3
Related Party Transactions and Arrangements (Details) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 | |
Due to a director and CEO [Member] | |||
Related Party Transaction [Line Items] | |||
Total | [1] | $ 490,218 | $ 795,179 |
[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. |
Related Party Transactions an_4
Related Party Transactions and Arrangements (Details Textual) | 1 Months Ended | 12 Months Ended | ||
Apr. 28, 2018USD ($) | Apr. 28, 2018CNY (¥) | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | |
Chief Executive Officer [Member] | ||||
Related Party Transactions and Arrangements (Textual) | ||||
Lease expiration date | Sep. 30, 2020 | |||
Rent expenses | $ 26,582 | $ 27,605 | ||
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 |
Warrants (Details)
Warrants (Details) - Common Stock Warrants [Member] - $ / shares | 12 Months Ended | ||
Mar. 31, 2020 | [1] | Mar. 31, 2019 | |
Class of Warrant or Right [Line Items] | |||
Stock price | $ 1.77 | $ 2.62 | |
Exercise price | $ 3.10 | $ 3.10 | |
Annual dividend yield | |||
Expected term (years) | 9 months 22 days | 1 year 9 months 18 days | |
Risk-free interest rate | 0.71% | 2.27% | |
Expected volatility | 62.08% | 67.69% | |
[1] | As of March 31, 2020, the warrants had not been exercised. |
Warrants (Details Textual)
Warrants (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jul. 19, 2015 | Mar. 31, 2020 | Mar. 31, 2019 | |
Warrants (Textual) | |||
Fair value estimation method | Binominal pricing model | ||
Purchase of warrants investors | 672,000 | ||
Purchase option and warrants liability | $ 64,090 | $ 465,248 | |
Warrant [Member] | |||
Warrants (Textual) | |||
Stock purchase price per share (in dollars per share) | $ 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 | $ 64,090 | $ 465,248 | |
Issuance of warrants to placement agent | 72,000 | ||
Percentage of stock sold in offering | 6.00% | ||
Change in Fair Value of Warrants Liability | $ 401,158 |
Employee Deposits (Details)
Employee Deposits (Details) - Mar. 31, 2020 | USD ($) | CNY (¥) |
Financial Liability (Textual) | ||
Reclassifies deposits financial liability | $ | $ 70,507 | |
RMB [Member] | ||
Financial Liability (Textual) | ||
Reclassifies deposits financial liability | ¥ | ¥ 500,000 |
Stockholder's Equity (Details)
Stockholder's Equity (Details) | Nov. 18, 2014Individuals$ / sharesshares | Apr. 15, 2019$ / sharesshares | Jun. 28, 2018shares | Mar. 30, 2018shares | Jan. 23, 2017USD ($)$ / shares | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) |
Stockholder's Equity (Textual) | ||||||||
Reserve fund percentage | 50.00% | |||||||
Statutory accounts percentage | 10.00% | |||||||
Compensation committee cancelled shares | 225,000 | |||||||
Chief Executive Officer [Member] | ||||||||
Stockholder's Equity (Textual) | ||||||||
Aggregate issuances shares | 675,000 | |||||||
Performance based compensation exemption, description | The Tax Cuts and Jobs Act of 2017 removed the 162(m) qualified performance based compensation exemption to the $1 million cap on deductions for compensation to covered executives. | |||||||
Common Stock [Member] | ||||||||
Stockholder's Equity (Textual) | ||||||||
Exercise price of stock option | $ / shares | $ 3.125 | |||||||
Warrants to purchase | 240,000 | |||||||
Common Stock [Member] | Investor [Member] | ||||||||
Stockholder's Equity (Textual) | ||||||||
Common stock, par value | $ / shares | $ 0.001 | |||||||
Proceeds from private placement | $ | $ 10,648,000 | |||||||
Warrants to purchase | 3,000,006 | |||||||
Aggregate purchase of number of shares | 6.00% | 484000000.00% | ||||||
Purchase price per share | $ / shares | $ 2.20 | |||||||
Employee Stock Option [Member] | ||||||||
Stockholder's Equity (Textual) | ||||||||
Number of granted shares | 967,000 | |||||||
Share based compensation expense | $ | $ 0 | $ 0 | ||||||
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 | |||||||
Stock Compensation Plan Three [Member] | ||||||||
Stockholder's Equity (Textual) | ||||||||
Number of granted shares | 3,947,100 | |||||||
Share based compensation expense | $ | $ 5,328,585 |
Loss Per Share (Details)
Loss Per Share (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
LOSS PER SHARES: | ||
Net income attributable to controlling interest | $ (5,813,369) | $ (926,278) |
Weighted average shares used in basic computation | 32,816,567 | 28,936,778 |
Diluted effect of stock options and warrants | ||
Weighted average shares used in diluted computation | 32,816,567 | 28,936,778 |
Income per share - Basic: | ||
Net income before noncontrolling interest | $ (0.18) | $ (0.03) |
Add: Net loss attributable to noncontrolling interest | ||
Net income attributable to controlling interest | (0.18) | (0.03) |
Loss per share - Diluted: | ||
Net income before noncontrolling interest | (0.18) | (0.03) |
Add: Net income attributable to noncontrolling interest | ||
Net income attributable to controlling interest | $ (0.18) | $ (0.03) |
Loss Per Share (Details Textual
Loss Per Share (Details Textual) - Employee Stock Option [Member] | 12 Months Ended |
Mar. 31, 2020shares | |
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 | 600,000 |
Segments (Details)
Segments (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue | $ 117,327,689 | $ 107,551,012 |
Cost of goods | 91,801,259 | 82,442,969 |
Gross profit | 25,526,430 | 25,108,043 |
Selling expenses | 23,793,603 | 24,265,184 |
General and administrative expenses | 8,108,377 | 1,718,989 |
Impairment of long-lived assets | 628,192 | |
Loss from operations | (7,003,742) | (876,130) |
Depreciation and amortization | 2,082,817 | 1,484,547 |
Total capital expenditures | 1,409,646 | 7,269,281 |
Retail drugstores [Member] | ||
Revenue | 74,081,237 | 72,334,409 |
Cost of goods | 53,244,302 | 51,246,983 |
Gross profit | 20,836,935 | 21,087,426 |
Selling expenses | 19,434,860 | 18,930,118 |
General and administrative expenses | 5,505,303 | 4,072,500 |
Impairment of long-lived assets | 628,192 | |
Loss from operations | (4,731,420) | (1,915,192) |
Depreciation and amortization | 2,042,951 | 1,476,903 |
Total capital expenditures | 1,406,470 | 7,267,847 |
Online Pharmacy [Member] | ||
Revenue | 13,541,215 | 8,784,459 |
Cost of goods | 12,106,510 | 7,748,519 |
Gross profit | 1,434,705 | 1,035,940 |
Selling expenses | 2,148,709 | 1,735,966 |
General and administrative expenses | 243,283 | 347,516 |
Impairment of long-lived assets | ||
Loss from operations | (957,287) | (1,047,542) |
Depreciation and amortization | ||
Total capital expenditures | ||
Drug Wholesale [Member] | ||
Revenue | 29,705,237 | 72,334,409 |
Cost of goods | 26,450,447 | 23,447,467 |
Gross profit | 3,254,790 | 2,984,677 |
Selling expenses | 2,210,034 | 3,599,100 |
General and administrative expenses | 2,359,791 | (2,701,027) |
Impairment of long-lived assets | ||
Loss from operations | (1,315,035) | 2,086,604 |
Depreciation and amortization | 39,866 | 7,644 |
Total capital expenditures | 3,176 | 1,434 |
Herbs Farming [Member] | ||
Revenue | ||
Cost of goods | ||
Gross profit | ||
Selling expenses | ||
Impairment of long-lived assets | ||
Depreciation and amortization | ||
Total capital expenditures |
Segments (Details 1)
Segments (Details 1) - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Net revenue from external customers | $ 117,327,689 | $ 107,551,012 |
Retail Drugstores [Member] | ||
Net revenue from external customers | 29,705,237 | 72,334,409 |
Retail Drugstores [Member] | Prescription Drugs [Member] | ||
Net revenue from external customers | 26,045,423 | 23,516,046 |
Retail Drugstores [Member] | OTC Drugs [Member] | ||
Net revenue from external customers | 31,532,248 | 31,401,328 |
Retail Drugstores [Member] | Nutritional Supplements [Member] | ||
Net revenue from external customers | 6,013,622 | 6,354,108 |
Retail Drugstores [Member] | TCM [Member] | ||
Net revenue from external customers | 5,325,008 | 6,529,790 |
Retail Drugstores [Member] | Sundry Products [Member] | ||
Net revenue from external customers | 1,312,293 | 941,491 |
Retail Drugstores [Member] | Medical Devices [Member] | ||
Net revenue from external customers | 3,852,643 | 3,591,646 |
Online Pharmacy [Member] | ||
Net revenue from external customers | 13,541,215 | 8,784,459 |
Online Pharmacy [Member] | Prescription Drugs [Member] | ||
Net revenue from external customers | 1,447,469 | |
Online Pharmacy [Member] | OTC Drugs [Member] | ||
Net revenue from external customers | 5,721,638 | 3,127,976 |
Online Pharmacy [Member] | Nutritional Supplements [Member] | ||
Net revenue from external customers | 742,809 | 737,315 |
Online Pharmacy [Member] | TCM [Member] | ||
Net revenue from external customers | 266,638 | 74,262 |
Online Pharmacy [Member] | Sundry Products [Member] | ||
Net revenue from external customers | 2,082,601 | 2,736,070 |
Online Pharmacy [Member] | Medical Devices [Member] | ||
Net revenue from external customers | 3,280,060 | 2,108,836 |
Wholesale [Member] | ||
Net revenue from external customers | 29,705,237 | 26,432,144 |
Wholesale [Member] | Prescription Drugs [Member] | ||
Net revenue from external customers | 24,857,708 | 16,745,862 |
Wholesale [Member] | OTC Drugs [Member] | ||
Net revenue from external customers | 4,196,841 | 8,964,587 |
Wholesale [Member] | Nutritional Supplements [Member] | ||
Net revenue from external customers | 205,881 | 290,534 |
Wholesale [Member] | TCM [Member] | ||
Net revenue from external customers | 314,769 | 271,280 |
Wholesale [Member] | Sundry Products [Member] | ||
Net revenue from external customers | 43,854 | 24,846 |
Wholesale [Member] | Medical Devices [Member] | ||
Net revenue from external customers | $ 86,184 | $ 24,846 |
Segments (Details Textual)
Segments (Details Textual) | 12 Months Ended |
Mar. 31, 2020Segment | |
Segments (Textual) | |
Number of operating segments | 4 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jun. 03, 2020 | May 29, 2020 | Mar. 31, 2020 | |
H.C. Wainwright & Co.LLC [Member] | |||
Subsequent Events (Textual) | |||
Warrant exercise price | $ 2.57 | ||
Percentage shares of common stock | 6.50% | ||
Warrants expiry date | Jun. 1, 2025 | ||
Warrant | 300,000 | ||
Forecast [Member] | |||
Subsequent Events (Textual) | |||
Aggregate of common stock, shares | 5,000,004 | ||
Common stock, par value | $ 2 | ||
Forecast [Member] | Securities Purchase Agreement [Member] | |||
Subsequent Events (Textual) | |||
Warrants expiry date | Jun. 1, 2020 | ||
Proceeds of common stock | $ 10,000,008 | ||
Warrant [Member] | Forecast [Member] | |||
Subsequent Events (Textual) | |||
Aggregate of common stock, shares | 3,750,003 | ||
Warrant exercise price | $ 2.60 | ||
Warrant [Member] | Subsequent Event [Member] | |||
Subsequent Events (Textual) | |||
Aggregate of common stock, shares | 25,000 | ||
Common stock, par value | $ 3.10 | ||
Proceeds of common stock | $ 77,500 |