OVERVIEW

Company Structure

JRSIS Health Care Corporation is a holding company that owns 100% of Runteng Medical Group Co., Ltd, a Hong Kong company. Runteng owns 100% of Laidian Technology in China. Until March 2022, Runteng also owned 70% of Harbin Jiarun Hospital in China, which it sold.

In November 2023, JRSIS acquired a 85.53% interest in Yongzhou Jumi Intelligent Technology Co., Ltd. (Yongzhou JIT) in China. This acquisition is accounted for as Yongzhou JIT acquiring JRSIS because Yongzhou JIT is the larger entity. The financial statements going forward represent the consolidated company.

Technology and Innovation

Yongzhou JIT focuses on developing intelligent machines and systems for smart medicine distribution and retail solutions in China. They own patents and software copyrights related to these technologies which are incorporated into their products and services. About 25% of their employees work in R&D.

Products and Services, Customers

The company sells intelligent terminals like medicine vending machines, as well as services like systems installation and maintenance. Their products incorporate their patented technologies. Customers include healthcare organizations, businesses, local governments and other service providers mainly in China.

GOING CONCERN UNCERTAINTIES

The company incurred significant losses and has an accumulated deficit. They relied on external financing and loans in the past. While they aim to improve performance, there is uncertainty around their ability to continue operations long-term.

Key Financial Results
Revenue: $500,420
Net Loss: $169,948
Cash: $323,611
Working Capital Deficit: $581,125

RESULTS OF OPERATIONS

Revenue

Q1 2024 revenue was $500,420, up 5% over Q1 2023, driven by increased sales volume. Growth was below expectations due to weaker macroeconomic conditions. The company aims to continue improving products to drive growth.

Expenses

Q1 2024 operating expenses were $218,128, up 195% vs Q1 2023. Selling expenses increased due to more marketing activities. General and admin costs rose due to professional services and listing fees that were absent last year.

Profitability

Gross margin declined from 32% to 11% due to discounts to drive revenue and increased labor costs. This led to a net loss of $169,948 compared to a profit last year. The company is taking measures to optimize costs and improve performance.

Cash Flow

The company used $204,937 in operating activities during Q1 2024 compared to $16,507 in Q1 2023. Cash from financing activities increased significantly year-over-year due to capital raises. Even with improved cash balances, liquidity remains a concern without consistent positive operating cash flow.

OUTLOOK

Demand for the company’s intelligent medicine products has not grown as quickly as expected due to economic weakness. However, the long-term opportunity remains attractive.

The company aims to drive growth by continuing to enhance its products and solutions leveraging in-house R&D capabilities and external partnerships. It is also focused on optimizing operations and managing costs to improve profitability and cash flow.

If operating performance does not improve as projected, the company may need to raise additional external capital or financing. Execution of the growth strategy in a capital efficient manner is key to the long-term sustainability of the business.