JRSIS Health Care Corporation Reports 55% Revenue Decline and Significant Net Loss in Latest Quarter

JRSIS Health Care Corporation reported significant financial challenges in its latest 10-Q filing for the quarter ending September 30, 2024. The company generated total revenue of $222,922 for the three months ended September 30, 2024, a decrease of approximately 55% compared to $497,361 in the same period last year. For the nine months ended September 30, 2024, revenue increased slightly to $1,320,738, up 1% from $1,311,750 in the prior year. The company incurred a net loss of $219,977 for the third quarter, a stark contrast to a net income of $39,407 in the same quarter of 2023. The nine-month net loss also widened to $509,680 from $31,415 year-over-year.

The financial performance reflects a substantial increase in operating expenses, which rose to $233,075 for the third quarter, up 237% from $69,098 in the prior year. This increase was driven by heightened sales and marketing costs, which surged to $106,876 from $10,358, and general and administrative expenses, which rose to $97,359 from $22,538. The company's gross profit for the third quarter fell to $26,885, representing a gross margin of 12%, down from 24% in the same quarter of 2023. The decline in revenue and profitability was attributed to a cautious investment climate in the Chinese medical and health industry, exacerbated by the lack of government stimulus.

In terms of strategic developments, JRSIS completed a reverse acquisition of Yongzhou Jumi Intelligent Technology Co., Ltd. on November 30, 2023, which has shifted the company's operational focus. The company now holds an 85.53% variable interest in Yongzhou JIT, which is engaged in developing medical technology and producing smart equipment. This acquisition is expected to enhance JRSIS's product offerings and market position in the smart healthcare sector.

Operationally, JRSIS reported a working capital deficit of $512,474 as of September 30, 2024, compared to $404,105 a year earlier. The company’s cash position also deteriorated, with cash balances dropping to $1,372 from $741 year-over-year. The filing indicated that the company is actively seeking additional financing through bank loans and potential equity issuance to support its operations and growth strategy. Management expressed optimism about the potential for revenue growth through improved marketing efforts and product innovation, although they acknowledged the ongoing economic challenges in the PRC.

Looking ahead, JRSIS's management emphasized the need for continued financial support and operational improvements to navigate the current economic landscape. The company is focused on enhancing its product offerings and expanding its market reach, but it faces significant uncertainties regarding its ability to sustain operations without additional funding. The management's outlook remains cautious, with a clear acknowledgment of the risks associated with the current market conditions and the company's financial health.