China Jo-Jo Drugstores Reports First Half of Fiscal Year 2022 Financial Results

China Jo-Jo Drugstores Reports First Half of

Fiscal Year 2022 Financial Results

HANGZHOU, China, January 21, 2022 /PRNewswire/

-- China Jo-Jo Drugstores, Inc. (NASDAQ: CJJD) ("Jo-Jo Drugstores" or the "Company"), a leading

online and offline retailer, wholesale distributor of pharmaceutical and other healthcare products, and healthcare provider in China,

today announced its financial results for the first half of fiscal year 2022 ended September 30, 2021.

Mr. Lei Liu, Chairman and CEO of Jo-Jo Drugstores,

commented, "We are pleased to have delivered a solid performance during the first half of fiscal year 2022 as we navigate through

a challenging operating environment affected by multiple COVID-19 surges. We achieved record revenue of $78.48 million, up 26.8% from

the same period of last year, and narrowed down 86% of net loss compared to the same period of last year. Revenue from online pharmacy

and wholesale segments increased by 33.5% and 63.6%, respectively, which reflects the efforts of our team as we continue to expand our

business. Our strong financial performance once again demonstrates the continuing momentum across the Company as the market recognizing

the quality of our products and the brand awareness of Jo-Jo Drugstores. Our unrivaled quality management, reliable supply chains, extensive

distribution network and industry-leading talent team are the reasons of the results."

Mr. Liu continued, "ESG, standing for Environment,

Society and Governance', is embedded in our core value and we are committed to improving the community we serve and protecting the

lives of our employees and customers. We received 2021 China ESG Golden Awards, a Sustainability Award from Sina Finance, which recognizes

our meaningful progress in delivering social and environmental benefits. The project "Healthy China 2030" will enhance the

reformation and innovation in the healthcare industry. To seize this opportunity, we will continue focusing on providing excellent in-store

services, accelerating digital transformation and upgrading our business model. We believe that our capability, operational performance

and diversified distribution channels will enable us to generate additional revenue and create greater value for our shareholders in the

First Six Months of Fiscal Year 2022 Financial

First Six Months of Fiscal Year 2022 Financial

Revenue for the six months ended September 30,

2021 increased by $16.58 million, or 26.8%, to $78.48 million from $61.90 million for the same period of last year. The increase in revenue

was primarily due to the growth in online pharmacy and wholesale business.

Revenue from the retail drugstores business increased

by $3.68 million, or 10.0%, to $40.42 million for the six months ended September 30, 2021 from $36.74 million for the same period of last

year. After excluding the impact of exchange rate fluctuation, the actual retail drugstores sales increased by 2.0%. The actual increase

in retail drugstore sales was primarily due to continuous adjustments of merchandises, better fitness to the market, improved store employee

incentive plan, and contribution from the new store sales.

Revenue from the online pharmacy business increased

by $3.44 million, or 33.5%, to $13.70 million for the six months ended September 30, 2021 from $10.26 million for the same period of last

year. The increase was primarily caused by an increase in sales to commercial insurance customers via the Company's official website

and an increase in sales of prescription drugs via e-commerce platforms such as Tmall. The sales via the Company's official website

were primarily made by certain pharmacy benefit management providers and insurance companies. For example, the Company has signed a service

contract with Yingda Taihe Life Insurance Co. Ltd. ("Yingda"), a national insurance company. Certain companies bought

private health insurances from Yingda for their employees. By linking the Company's online pharmacy platform with Yingda and training

Yingda's employees, they are able to buy health products on the Company's online stores. The sales from these customers contributed

significantly to the Company's official website sales. The Company's official website sales increased by 85.5% as compared

to the same period of last year. Prescription drugs used to be prohibited from online sales due to safety concern. After the nation has

lifted the ban order, online prescription drug sales become popular. As a result, the sale of prescription drugs was $4.93 million for

the six months ended September 30, 2021. For the same period of last year, it was $3.63 million.

Revenue from the wholesale business increased

by $9.47 million, or 63.6%, to $24.37 million for the six months ended September 30, 2021, from $14.90 million for the same period of

last year. In order to obtain rebates from its major suppliers, the Company is required to make more purchase from the suppliers. To quickly

resell these products, the Company chose to lower its sales price to local vendors, which in turn helped increase the sales significantly.

Gross profit and gross margin

Total cost of goods sold increased by $16.19 million,

or 34.5%, to $63.09 million for the six months ended September 30, 2021, from $46.90 million for the same period of last year. Gross profit

increased by $0.41 million, or 2.7%, to $15.40 million for six months ended September 30, 2021 from $14.99 million for the same period

of last year. Overall gross margin decreased by 4.6 percentage points to 19.6% for the six months ended September 30, 2021, from 24.2%

for the same period of last year.

Gross margins for retail drugstores, online pharmacy

and wholesale were 28.5%, 10.3%, and 10.1%, respectively, for the six months ended September 30, 2021, compared to gross margins for retail

drugstores, online pharmacy and wholesale of 32.7%, 12.5%, and 11.4%, respectively, for the same period of last year.

Loss from operations

Selling and marketing expenses increased by $0.54

million, or 4.3%, to $13.29 million for the six months ended September 30, 2021 from $12.75 million for the same period of last year.

The increase in selling and marketing expenses was primarily due to increase in fees charged by various platforms as a result of sales

increase in the Company's online pharmacy.

General and administrative expenses decreased

by $1.58 million, or 37.9%, to $2.60 million for the six months ended September 30, 2021 from $4.18 million for the same period of last

year. The decrease in general and administrative expenses was primarily due to the decrease in labor cost. In response to the government

insurance budget control, the Company cut off certain administration staff and combined several administrative duties. Additionally, in

the six months ended September 30, 2021, the Company provided bonus to certain key staff. Such expenses, as a percentage of revenue, decreased

to 3.3% from 6.8% for the same period of last year.

Loss from operations was $0.49 million for the

six months ended September 30, 2021, compared to $1.94 million for the same period of last year. Operating margin was (0.6) % and (3.1)%

for the six months ended September 30, 2021 and 2020, respectively.

Net loss was $0.27 million, or $0.01 per basic

and diluted share for the six months ended September 30, 2021, compared to net loss of $1.92 million, or $0.05 per basic and diluted share

for the same period of last year.

As of September 30, 2021, the Company has cash

of $24.61 million, compared to $22.05 million as of March 31, 2021. Net cash provided by operating activities is $0.50 million for the

six months ended September 30, 2021, compared to net cash used in operating activities of $0.35 million for the same period of last year.

Net cash used in investing activities is $0.19 million for the six months ended September 30, 2021, compared to $1.76 million for the

same period of last year. Net cash provided by financing activities is $3.43 million for the six months ended September 30, 2021, compared

to $4.55 million for the same period of last year.

About China Jo-Jo Drugstores, Inc.

China Jo-Jo Drugstores, Inc. ("Jo-Jo

Drugstores" or the "Company"), is a leading online and offline retailer and wholesale distributor of pharmaceutical

and other healthcare products and a provider of healthcare services in China. Jo-Jo Drugstores currently operates an online pharmacy

and retail drugstores with licensed doctors on site for consultation, examination and treatment of common ailments at scheduled hours.

It is also a wholesale distributor of products similar to those carried in its pharmacies. For more information about the Company, please

visit http://jiuzhou360.com. The Company routinely posts important information on its website.

Forward-Looking Statements

This press release contains information about

the Company's view of its future expectations, plans and prospects that constitute forward-looking statements. Actual results may

differ materially from historical results or those indicated by these forward-looking statements as a result of a variety of factors including,

but not limited to, risks and uncertainties associated with its ability to raise additional funding, its ability to maintain and grow

its business, variability of operating results, its ability to maintain and enhance its brand, its development and introduction of new

products and services, the successful integration of acquired companies, technologies and assets into its portfolio of products and services,

marketing and other business development initiatives, competition in the industry, general government regulation, economic conditions,

dependence on key personnel, the ability to attract, hire and retain personnel who possess the technical skills and experience necessary

to meet the requirements of its clients, and its ability to protect its intellectual property. The Company's encourages you to review

other factors that may affect its future results in the Company's annual reports and in its other filings with the Securities and Exchange

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