NEW YORK, Oct. 19, 2020 (GLOBE NEWSWIRE) -- BOQI International Medical Inc. (NASDAQ: BIMI) (“BIMI” or the “Company”) today announced its financial results for the second quarter and six months ended June 30, 2020.
Second Quarter 2020 Financial Highlights:
- Total revenues increased by 1026 % in the three months ended June 30, 2020 compared to the three months ended June 30, 2019.
- Gross profit margin increased to 22.77% during the three months ended June 30, 2020 compared to 4.35% for the three months ended June 30, 2019.
- Net income increased by 629% in the three months ended June 30, 2020 compared to the three months ended June 30, 2019.
“We are pleased with our results in the second quarter and the concerted efforts of our team across our wholesale business in medical devices and medicine,” said Mr. Tiewei Song, Chief Executive Officer and President of BOQI International Medical Inc. “We acquired Guanzan Group this year, which allows us to better align with the current environment and positions us for future growth. As more healthcare facilities re-opened for business and resumed patient treatment in the second half of the year, we believe our products can meet the expected rising customer demand, meanwhile bring benefit to our shareholders.”
Revenues
Revenues for the three months ended June 30, 2020 and 2019 were $3,790,847 and $336,690, respectively. The Company’s revenues for the three months ended June 30, 2020 were principally attributable to the newly acquired Guanzan Group’s wholesale sales of medical devices and generic drugs. The Company’s revenues for the three months ended June 30, 2019 were attributable to the sales of products manufactured by the NF Group and from energy saving technical services and product collaboration processing services performed by the NF Group, which the Company sold in June 2020. Revenues from the wholesale medical devices segment and the wholesale medicine segment for the three months ended June 30, 2020 were $2,059,189 and $1,730,175, respectively. During the second quarter of 2020, the Guanzan Group benefitted from the recovery from COVID-19 in the PRC.
Revenues for the six months ended June 30, 2020 and 2019 were $4,226,378 and $912,402, respectively. The 363% increase in revenues is attributable to the acquisition of the Guanzan Group in late March 2020. Revenues from the wholesale medicine segment for the six months ended June 30, 2020 were $2,307,311 and revenues from the wholesale medical device segment for the six months ended June 30, 2020 were $1,896,733. The Company’s revenue for the six months ended June 30, 2019 were attributable to the sales of products manufactured by the NF Group and from energy saving technical services and product collaboration processing services performed by the NF Group.
Cost of Revenues
Cost of revenues for the three months ended June 30, 2020 and 2019 were $2,941,955 and $319,172, respectively, reflecting the impact of the acquisition of the Guanzan Group. Cost of revenues for the three months ended June 30, 2019 consisted primarily of material costs, direct labor, depreciation, and manufacturing overhead, which were directly attributable to the manufacturing of products and the rendering of services by the NF Group.
Cost of revenues for the six months ended June 30, 2020 and 2019 were $3,407,169 and $749,848, respectively. Cost of revenues for the six months ended June 30, 2019 were attributable to the manufacturing of products and the rendering of services by the NF Group.
Gross Profit
For the three months ended June 30, 2020, the Company had a gross profit margin of 22.77% compared with a gross profit margin of 4.35% in the quarter ended June 30, 2019. The improvement in the gross profit margin in the three months ended June 30, 2020 is mainly due to the inclusion of a full quarter of revenues from the wholesale medical devices and wholesale medicine segments. The gross profit margin of the wholesale medical devices and wholesale medicine segments for three months ended June 30, 2020 were 23.22% and 25.56%, respectively. The gross profit for the Company in the three months ended June 30, 2019 was related to the operations of the NF Group. For the six months ended June 30, 2020, the Company had a gross profit margin of 19.38% compared with a gross profit margin of 17.82% in the first six months of 2019. The improvement in the gross profit margin in the six months ended June 30, 2020 is mainly due to the inclusion of the revenues from the wholesale medical devices and wholesale medicine segments since the acquisition in March 2020. The gross profit margin of the wholesale medical devices and wholesale medicine segments for six months ended June 30, 2020 were 22.78% and 25.16%, respectively. The gross profit for the Company in the six months ended June 30, 2019 was related to the operations of the NF Group.
Operating Expenses
Operating expenses were $2,922,868 for the three months ended June 30, 2020 compared to $726,940 for the same period in 2019, an increase of $2,195,928. The increase is mainly due to the additional amortization of the discounted convertible notes, meeting and promotional expenses, pharmaceutical and medical device industry compliance management expenses and professional expenses. The Company’s operating expenses for the three months ended June 30, 2019 consisted primarily of general and administrative expenses, and selling and marketing expenses of the NF Group.
Operating expenses were $4,893,723 for the six months ended June 30, 2020 compared to $1,248,456 for the same period in 2019, an increase of $3,645,267, or 292%. The Company’s operating expenses for the six months ended June 30, 2019 consisted primarily of general and administrative expenses, and selling and marketing expenses of the NF Group.
Other Income
For the three months ended June 30, 2020, the Company reported other income of $6,986,587 and other interest expense of $195,486. For the six months ended June 30, 2020, the Company reported other income of $6,944,469 and other interest expense of $377,466. Other income in both periods includes the gain generated from the disposal of the NF Group. Other expense in both periods consisted of interest expense.
Net Profit
For the three months ended June 30, 2020, the Company reported a net profit of $4,673,854 compared to a net loss of $883,245 for the same period of 2019. For the six months ended June 30, 2020 the Company reported a net profit of $2,471,663 compared to a net loss of $1,425,693 for the same period of 2019. The net profit in both periods is attributable to the gain generated from the disposal of the NF Group.
Liquidity and Capital Resources
At June 30, 2020, the Company had cash of $109,402 and negative working capital of $0.59 million as compared to cash of $36,674 and negative working capital of $500,765 at December 31, 2019.
About BOQI International Medical Inc.
BOQI International Medical Inc. (formerly known as NF Energy Saving Corporation) (NASDAQ: BIMI) was founded in 2006. In February 2019, the Board of Directors of the company was reorganized with a focus on the health industry. The Company is now exclusively a healthcare products provider, offering a broad range of healthcare products and related services. For more information about BOQI International Medical, please visit www.usbimi.com.
Safe Harbor Statement
Certain matters discussed in this news release are forward-looking statements that involve a number of risks and uncertainties including, but not limited to, the Company’s ability to achieve profitable operations, its ability to continue to operate as a going concern, its ability to continue to meet NASDAQ continued listing requirements, the effects of the spread of the Coronavirus (COVID-19), the demand for the Company’s products and the Company’s customers’ economic condition, risk of operations in the People’s Republic of China, general economic conditions and other risk factors detailed in the Company’s annual report and other filings with the United States Securities and Exchange Commission. Investors are urged to read the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2020 for further information about the Company’s financial results, liquidity and capital resources.
IR Contact:
Dragon Gate Investment Partners LLC
Tel: +1(646)-801-2803
Email: BIMI@dgipl.com
BOQI INTERNATIONAL MEDICAL, INC. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| June 30, | December 31, | |||||||
| 2020 | 2019 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | 96,312 | $ | 36,363 | ||||
| Restricted cash | 13,090 | 311 | ||||||
| Accounts receivable, net | 3,118,402 | 24,840 | ||||||
| Advances to suppliers | 2,197,249 | 1,252 | ||||||
| Amount due from related parties | 49,776 | 1,350 | ||||||
| Inventories, net | 2,523,075 | 707,526 | ||||||
| Prepayments and other receivables | 14,407,373 | 59,333 | ||||||
| Assets from discontinued operations | - | 21,218,983 | ||||||
| Total current assets | 22,405,277 | 22,049,958 | ||||||
| NON-CURRENT ASSETS | ||||||||
| Deferred tax assets | 244,351 | - | ||||||
| Property, plant and equipment, net | 756,712 | 38,641 | ||||||
| Intangible assets, net | 7,458,486 | 7,973,179 | ||||||
| Goodwill | 6,443,170 | - | ||||||
| Total non-current assets | 14,902,719 | 8,011,820 | ||||||
| TOTAL ASSETS | $ | 37,307,996 | $ | 30,061,778 | ||||
| LIABILITIES AND EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Short-term loans | $ | 834,028 | $ | - | ||||
| Long-term loans due within one year | 219,554 | - | ||||||
| Convertible promissory notes, net | 3,852,890 | 107,383 | ||||||
| Derivative liability | 1,329,842 | 1,272,871 | ||||||
| Accounts payable, trade | 3,757,567 | 641,927 | ||||||
| Advances from customers | 828,939 | 67,975 | ||||||
| Amount due to related parties | 649,059 | 305,760 | ||||||
| Taxes payable | 317,010 | 861 | ||||||
| Other payables and accrued liabilities | 11,208,548 | 6,044,378 | ||||||
| Liabilities from discontinued operations | - | 13,108,038 | ||||||
| Total current liabilities | 22,997,437 | 21,549,193 | ||||||
| Long-term loans - noncurrent portion | 163,920 | - | ||||||
| TOTAL LIABILITIES | 23,161,357 | 21,549,193 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| EQUITY | ||||||||
| Common stock, $0.001 par value; 50,000,000 shares authorized; 10,384,433 and 9,073,289 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively | 10,384 | 9,073 | ||||||
| Additional paid-in capital | 22,626,434 | 15,643,825 | ||||||
| Statutory reserves | - | 2,227,634 | ||||||
| Accumulated deficit | (8,436,279 | ) | (10,881,667 | ) | ||||
| Accumulated other comprehensive income (loss) | (128,737 | ) | 1,683,770 | |||||
| Total BOQI International Medical Inc.’s equity | 14,071,802 | 8,682,635 | ||||||
| NON-CONTROLLING INTERESTS | 74,837 | (170,050 | ) | |||||
| Total equity | 14,146,639 | 8,512,585 | ||||||
| Total liabilities and equity | $ | 37,307,996 | $ | 30,061,778 | ||||
BOQI INTERNATIONAL MEDICAL, INC. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (GAIN)/LOSS
(UNAUDITED)
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| REVENUES | 3,790,847 | 336,690 | 4,226,378 | 912,402 | ||||||||||||
| COST OF REVENUES | 2,941,955 | 319,172 | 3,407,169 | 749,848 | ||||||||||||
| GROSS PROFIT | 848,892 | 14,518 | 819,209 | 162,554 | ||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Sales and marketing | 531,923 | 48,851 | 650,769 | 86,724 | ||||||||||||
| General and administrative | 2,390,945 | 678,089 | 4,242,954 | 1,161,732 | ||||||||||||
| Total operating expenses | 2,922,868 | 726,940 | 4,893,723 | 1,248,456 | ||||||||||||
| LOSS FROM OPERATIONS | (2,073,976 | ) | (712,422 | ) | (4,074,514 | ) | (1,085,902 | ) | ||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||||||
| Interest expense | (195,486 | ) | (173,526 | ) | (377,446 | ) | (292,094 | ) | ||||||||
| Other income (expense) | 6,986,587 | 2,703 | 6,968,162 | (47,697 | ) | |||||||||||
| Total other income (expense), net | 6,791,101 | (170,823 | ) | 6,590,716 | (339,791 | ) | ||||||||||
| INCOME (LOSS) BEFORE INCOME TAXES | 4,717,125 | (883,245 | ) | 2,516,202 | (1,425,693 | ) | ||||||||||
| PROVISION FOR INCOME TAXES | 43,271 | — | 44,539 | — | ||||||||||||
| NET INCOME (LOSS) | 4,673,854 | (883,245 | ) | 2,471,663 | (1,425,693 | ) | ||||||||||
| Less: net income (loss) attributable to non-controlling interest | 33,590 | (21,149 | ) | 26,274 | 3,997 | |||||||||||
| NET INCOME (LOSS) ATTRIBUTE TO BOQI INTERATIONAL MEDICAL INC. | $ | 4,640,264 | $ | (862,096 | ) | $ | 2,445,389 | $ | (1,429,690 | ) | ||||||
| OTHER COMPREHENSIVE INCOME(LOSS) | ||||||||||||||||
| Foreign currency translation adjustment | 263,239 | (205,602 | ) | 143,038 | 26,325 | |||||||||||
| TOTAL COMPREHENSIVE INCOME(LOSS) | 4,937,093 | (1,088,847 | ) | 2,614,701 | (1,339,368 | ) | ||||||||||
| Less: comprehensive income (loss) attributable to non-controlling interests | 2,334 | (8,831 | ) | (2,601 | ) | 4,546 | ||||||||||
| COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO BOQI INTERNATIONAL MEDICAL INC. | $ | 4,934,759 | $ | (1,080,016 | ) | $ | 2,617,302 | $ | (1,403,914 | ) | ||||||
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES | ||||||||||||||||
| Basic and diluted | 10,203,861 | 7,831,531 | 9,728,861 | 7,703,123 | ||||||||||||
| INCOME (LOSS) PER SHARE | ||||||||||||||||
| Basic and diluted | $ | 0.46 | $ | (0.11 | ) | $ | 0.25 | $ | (0.19 | ) | ||||||
BOQI INTERNATIONAL MEDICAL, INC. AND ITS SUBSIDIARIES
(CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| For the Six Months Ended June 30, | ||||||||
| 2020 | 2019 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net Income (Loss ) | $ | 2,471,663 | $ | (1,425,693 | ) | |||
| Adjustments to reconcile net loss to cash used in operating activities: | ||||||||
| Depreciation and amortization | 512,460 | 497,476 | ||||||
| (Profit) on disposal of NF Group | (6,944,469 | ) | - | |||||
| Allowance for doubtful accounts | 79,061 | 157,310 | ||||||
| Amortization of discount of convertible promissory notes | 1,075,171 | - | ||||||
| Change in derivative liabilities | 107,340 | - | ||||||
| Impairment loss from construction in progress | - | 25,071 | ||||||
| Allowance for inventory provision | 187,942 | - | ||||||
| Change in operating assets and liabilities | ||||||||
| Accounts receivable | (1,301,929 | ) | 942,687 | |||||
| Advances to suppliers | (958,804 | ) | - | |||||
| Inventories | (1,012,881 | ) | (214,739 | ) | ||||
| Prepayments and other receivables | 930,314 | (74,919 | ) | |||||
| Accounts payable, trade | 1,760,102 | (318,384 | ) | |||||
| Advances from customers | (602,416 | ) | ||||||
| Taxes payable | (80,818 | ) | 19,339 | |||||
| Other payables and accrued liabilities | 347,751 | 365,443 | ||||||
| Net cash provided by (used in) operating activities | (3,429,513 | ) | (26,409 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Cash received from acquisition of Guanzan Group | 95,220 | - | ||||||
| Net cash provided by investing activities | 95,220 | - | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Issuance of common stock | 126,841 | |||||||
| Net proceeds from issuance of convertible promissory notes | 3,457,325 | - | ||||||
| Proceeds from short-term loans | 5,899,009 | |||||||
| Repayment of short-term loans | (34,100 | ) | (5,900,484 | ) | ||||
| Repayment of long-term loans | (21,497 | ) | ||||||
| Amount financed by related parties | 598,803 | |||||||
| Net cash provided by financing activities | 4,000,531 | 125,366 | ||||||
| EFFECT OF EXCHANGE RATE ON CASH | (593,510 | ) | 20,569 | |||||
| INCREASE IN CASH | 72,728 | 78,388 | ||||||
| CASH AND CASH EQUIVALENTS, beginning of period | 36,674 | 197,356 | ||||||
| CASH AND CASH EQUIVALENTS, end of period | $ | 109,402 | $ | 275,744 | ||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
| Cash paid for income tax | $ | 56,396 | $ | - | ||||
| Cash paid for interest expense, net of capitalized interest | $ | 34,902 | $ | 284,092 | ||||
| NON-CASH TRANSACTIONS OF INVESTING AND FINANCING ACTIVITIES | ||||||||
| Issuance of common shares for the equity acquisition of Chongqing Guanzan Technology Co., Ltd. | $ | 2,717,000 | $ | - | ||||
| Goodwill recognized from the equity acquisition of the Boqi Group | $ | 6,443,170 | $ | - | ||||
| Outstanding payment for the equity acquisition of Chongqing Guanzan Technology Co., Ltd. | $ | 4,414,119 | $ | - | ||||
| Outstanding receivable for disposal of NF Group | $ | 10,000,000 | $ | - | ||||
| Issuance of common shares upon conversion of convertible notes | $ | 1,008,067 | $ | - | ||||