Unassociated Document
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D. C. 20549
FORM
10-K
x
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ANNUAL REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For
the fiscal year ended July 31, 2009
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TRANSITION
REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT OF
1934
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For the
transition period from _____ to __________
Commission
file number 000-53353
CHINA
JO-JO DRUGSTORES, INC.
(Exact
name of registrant as specified in its charter)
Nevada
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98-0557852
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification No.)
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Room
507-513, 5th Floor A Building, Meidu Plaza
Gongshu
District
Hangzhou,
Zhejiang Province
People’s
Republic of China
(Address of Principal Executive
Offices)
+86
(571) 88077078
(Issuer
Telephone Number)
N/A
(Former
name or former address, if changed since last report)
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes o No þ
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes o No þ
Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes þ No o
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes o No o
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§229.405 of this chapter) is not contained herein, and will
not be contained herein, to the best of registrant’s knowledge, in definitive
proxy or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer” and
“smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer o
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Accelerated
filer o
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Non-accelerated
filer o
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Smaller
reporting company þ
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Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act). Yes o No þ
State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of the last business day of the
registrant’s most recently completed second fiscal quarter.
$0.00
The
registrant had a total of 4,200,000 shares of common stock outstanding as of
September 16, 2009.
Explanatory
Note
China
Jo-Jo Drugstores, Inc. (the “Registrant”) is filing this annual report on Form
10-K for the fiscal year ended July 31, 2009 of Kerrisdale Mining Corporation
(“Kerrisdale”), its corporate predecessor entity, in response to a comment from
the Staff of the Securities and Exchange Commission (“SEC”) in connection with
the Registrant’s registration statement on Form S-1 filed with the SEC (SEC File
Number 333-163879).
As
disclosed in the current report on Form 8-K filed with the SEC on September 24,
2009 (the “Form 8-K”), on September 17, 2009, Kerrisdale completed a share
exchange transaction with Renovation Investment (Hong Kong) Co., Ltd.
(“Renovation”) and its shareholders that resulted in Renovation becoming a
wholly-owned subsidiary and the new operating business of Kerrisdale. The share
exchange transaction was accounted for as a reverse acquisition and
recapitalization and, as a result, the consolidated financial statements of
Kerrisdale (the legal acquirer) have become, in substance, those of Renovation
(the accounting acquirer), with the assets and liabilities, and revenues and
expenses, of Kerrisdale being included effective from the date of the share
exchange transaction. Additionally, as disclosed in the Form 8-K, Kerrisdale
changed its fiscal year-end in connection with the share exchange transaction,
from July 31 to March 31. However, because the share exchange transaction was
not completed until after the end of Kerrisdale’s original fiscal year on July
31, 2009, the Staff is requiring the Registrant to file this Form 10-K to report
Kerrisdale’s business activities for such fiscal year period.
Accordingly,
this 10-K and the disclosures and financial statements contained herein speak to
the operations and financial conditions of Kerrisdale as of July 31, 2009, and
where indicated, as of September 16, 2009, immediately prior to its consummation
of the share exchange transaction with Renovation.
TABLE
OF CONTENTS
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Page
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PART
I
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Item
1.
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Business.
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2
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Item
1A.
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Risk
Factors.
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6
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Item
1B.
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Unresolved
Staff Comments.
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6
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Item
2.
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Properties.
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7
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Item
3.
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Legal
Proceedings.
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7
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PART
II
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Item
5.
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Market
For Common Stock and Related Stockholder Matters.
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7
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Item
6.
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Selected
Financial Data
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8
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Item
7.
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Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
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8
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Item
7A.
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Quantitative
and Qualitative Disclosures about Market Risk.
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9
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Item
8.
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Financial
Statements and Supplementary Data.
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9
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Item
9.
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Changes
In and Disagreements With Accountants on Accounting and
Financial Disclosure
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9
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Item
9A.
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Controls
and Procedures
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10
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Item
9B.
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Other
Information
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10
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PART
III
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Item
10.
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Directors,
Executive Officers and Corporate Governance
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11
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Item
11.
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Executive
Compensation
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12
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Item
12.
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Security
Ownership of Certain Beneficial Owners and Management
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13
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Item
13.
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Certain
Relationships and Related Transactions, and Director
Independence
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13
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Item
14
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Principal
Accountant Fees and Services
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13
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PART
IV
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Item
15.
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Exhibits,
Financial Statement Schedules.
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14
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PART
I
General
Kerrisdale
Mining Corporation (“Kerrisdale”) incorporated on December 19, 2006 under the
laws of the state of Nevada. Kerrisdale is an exploration stage company.
Kerrisdale does not own an interest in any property, but acquired the
right to conduct exploration activities on one property referred to herein as
the Kerrisdale Property, consisting of approximately 369.5 hectares
(approximately 910 acres) located in the south-center region of British
Columbia, Canada.
Kerrisdale’s
exploration right, in the form of a mineral claim, was acquired in April 2007 by
John Morita, who was at the time president, chief executive officer, and
director of Kerrisdale, by arranging the staking of the same through Percy Cox,
a non-affiliated third party. Mr. Cox is a self employed contract staker and
field worker residing in Kamloops, British Columbia. The property was
selected because copper, gold and platinum has been discovered in the
area.
As of
September 16, 2009, the Kerrisdale Property was unencumbered. Accordingly, there
were no claims, liens, charges or liabilities against the property as of such
date. In addition, there were no native land claims or other types of
competitive claims against the property through which an unaffiliated third
party could claim an interest in the property.
Subsequent
Events
On September
17, 2009, Kerrisdale consummated a share exchange transaction by which it
acquired a retail pharmacy chain business in the People’s Republic of China
(“China” or the “PRC”) pursuant to a share exchange agreement by and among
Kerrisdale, Renovation Investment (Hong Kong) Co., Ltd., a Hong Kong company
(“Renovation”), and the shareholders who, immediately prior to the
closing of share exchange transaction, collectively held 100% of Renovation’s
issued and outstanding share capital (the “Renovation
Shareholders”). Renovation is a holding company that, through its
wholly-owned subsidiary in China, Zhejiang Jiuxin Investment Management Co.,
Ltd., controls three PRC companies by a series of contractual arrangements: (1)
Hangzhou Jiuzhou Grand Pharmacy Chain Co., Ltd., (2) Hangzhou Jiuzhou Clinic of
Integrated Traditional and Western Medicine (General Partnership), and (3)
Hangzhou Jiuzhou Medical & Public Health Service Co., Ltd. (collectively
“Jo-Jo Drugstores”). All of the operations of the retail pharmacy chain
acquired by Kerrisdale through the share exchange transaction are conducted by
these three companies. The terms of the share exchange agreement and the share
exchange transaction, as well as a description of the business operations of
Jo-Jo Drugstores, were first disclosed in a current report on Form 8-K filed
with the SEC on September 24, 2009.
In
connection with the share exchange transaction, Kerrisdale changed its name to
“China Jo-Jo Drugstores, Inc.” on September 24, 2009.
Kerrisdale’s
Claim
The
following sets forth the tenure number, claim, date of recording and expiration
date of Kerrisdale’s claim to the Kerrisdale Property:
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Claim No.
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Document Description
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Recording
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Expiration
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550556
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KERRISDALE1
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1-29-2007
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1-29-2010
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Kerrisdale’s
claim consisted of 18 contiguous units comprising of a total of 369.5 hectares.
The amount of assessment work required to hold the claim in good standing is
$4.00 per hectare per year for the first 3 years, then $8.00 per hectare
thereafter. Thus, for the Kerrisdale Property, the amount required for the
first three years is 1478.00 Canadian Dollars (CND) (approximately $1,330.00)
per year minimum. In June 2007, Kerrisdale engaged Jamie Pardy, a
professional geologist, to carry out the first geological work on the claim. A
geological and geochemical report was written and submitted to the Ministry of
Energy & Mines in British Columbia, Canada. The total cost of the work was
CND3956.56. With the assessment work completed, Kerrisdale’s claim remained in
good standing until January 29, 2010.
Location
and Access
The
Kerrisdale Property is located approximately 12 km by road north-northwest of
the Village of Logan Lake, British Columbia, and approximately 42 km due
west-southwest of the City of Kamloops. Road access is made from Logan Lake by
driving 5.9 km north on Highway 97C then 7 km north-west on loose surface roads
to the western limits of the claim block. The tenure is located on BCGS
map sheet 092I056. The center of the property lies at UTM Zone 10, 0650006E,
5602359N. The property can be easily accessed for day trips from Logan Lake,
Kamloops or even the Lower Mainland area. An electric power transmission line
crosses the tenure at its eastern end and a larger higher capacity line also
transects the property, further improving road access with transmission line
trails. A Federal Corrections Canada camp facility and a homestead lie at the
eastern limits of the tenure.
MAP
2
Property
Geology
Kerrisdale
550556 lies across the northeastern boundary of the Late Triassic-Early Jurassic
age Guichon Creek batholith. The Kerrisdale Property is mapped by the BC
Geological Survey (Massey, MacIntrye, Desjardins, Cooney, 2005) as underlain by
the Border Phase of the Guichon Creek batholith and the Nicola Group volcanic
rocks; however, no outcrop is observed on the property. The thickness of the
evident glacial overburden deposits is not exactly known, but is exposed in a
number of road cuts through the property.
The
western 1/3 to 1/2 of the property is most interesting geologically based on
regional scale government maps that indicate that it is underlain by the rocks
of the Guichon Creek batholith, albeit the Border phase component that is not
known to host economically viable copper-molybdenum deposits that occur in the
interior phases of the pluton.
The most
significant mineral deposit model applicable to exploration in the area is large
calcalkalic type copper-molybdenum deposits. Diatomite is also
reported to occur approximately ½ km north of the property boundary (MINFILE
092INE163 Guichon Creek) in a meadow located just east of Guichon Creek about 4
kilometers south of Tunkwa Lake, but within the Tunkwa Provincial Park.
Initial
Exploration Program
The
initial work on the Kerrisdale Property was completed in June 2007 by Jamie
Pardy and a field assistant, and included prospecting and a soil geochemical
survey.
Property
orientation and initial prospecting for outcrop and mapping of overburden
boulders was conducted on day one, prospecting and soil sampling was completed
on day two, and further prospecting for outcrop and mineralization was completed
on day three. More detailed prospecting and the soil sampling focused on the
western half of the property where bedrock is mapped as Guichon Creek batholith.
One part of the claim was off limits to access due to the presence of a Federal
Corrections Canada camp and a homestead located in the low-lying Guichon Creek
watercourse, namesake of the plutonic rocks of the area. From vantage points to
the west and east, no outcrop was visible in the low-lying Guichon Creek
watercourse area.
No
outcrop or mineralized rock was found on the property. A mantle of glacial till
of undetermined thickness covers the property. Numerous well-rounded boulders of
medium-grained granodiorite and fine-grained, fresh mafic volcanic rocks occur
in the glacial till. A small number of intermediate to mafic volcanic rock
boulders also occur in the till and are interpreted to be Nicola Group volcanic
rocks. The granodiorite boulders are almost certainly part of the Guichon Breek
batholith Border phase.
In total
23 soil samples were collected along 3 separate soil lines along ridges.
Samples were taken approximately 100 meters apart. Soil samples were
collected as the only practical and applicable method to obtain some form of
geochemical data, although the effectiveness of the sampling method is unknown
in terms of ability to detect bedrock conditions at an unknown depth. One
sample with slightly anomalous copper geochemistry (93.3 ppm Cu) could be
attributable to mineralized float and the moisture and clay component of the
soil at the sample collection point could also be partially responsible for the
slightly elevated value. No outcrop or boulders with copper mineralization
were seen in the area. There were no soil samples with anomalous molybdenum or
anomalous gold geochemistry.
Soil
samples were treated with Acme Analytical Laboratories’ SS80 soil sample
preparation and Group 1DX analysis package. Soil samples dried at 60 degrees C,
then 100 grams was sieved to -80 mesh; a 15.0 gram sample was leached with 90 ml
2-2-2 HCL-HNO3-H2O at 95 degree Celsius for one hour, diluted to 300 ml and
analyzed by ICP-MS. In-house quality assurance and control of Acme Analytical
Laboratories was relied upon for this basic soil sampling
program.
There
were no significant results from this limited 2007 survey conducted on the
Kerrisdale Property.
Further
Exploration Program
As July 31, 2009 and through September
16, 2009, immediately prior to the consummation of the share exchange
transaction between Kerrisdale and Renovation, no further exploration program
had been undertaken due to the lack of funds.
Competition
The
copper and gold mining industry is fragmented. As of July 31, 2009 and
through September 16, 2009, immediately prior to the consummation of the share
exchange transaction between Kerrisdale and Renovation, Kerrisdale competed with
other exploration companies looking for copper and gold, and was one of the
smallest exploration companies in existence. There was no competition,
however, for the exploration or removal of mineral from the Kerrisdale Property
during such periods. Readily available markets exist in Canada and around
the world for the sale of gold and copper. Therefore, Kerrisdale should
have been able to sell such gold or copper that it was able to recover, if
any.
Government
Regulations
Mineral
exploration at the Kerrisdale Property is subject to the British Columbia
Mineral Tenure Act, which sets forth rules for:
Mineral
exploration at the Kerrisdale Property is also subject to the British Columbia
Mineral Exploration Code, which regulates how and where minerals can be
explored. Kerrisdale must comply with these laws to operate its business. As
Kerrisdale did not engage in any exploration activities as of July 31, 2009 and
through September 16, 2009, immediately prior to the closing of the share
exchange transaction between Kerrisdale and Renovation, Kerrisdale did not have
any compliance issue as of such periods.
Environmental
Laws
Kerrisdale
is also subject to the Health, Safety and Reclamation Code for Mines in British
Columbia, which deals with environmental matters relating to the exploration and
development of mineral properties. Its goals are to protect the
environment through a series of regulations affecting:
Kerrisdale
would be responsible to provide a safe working environment, not disrupt
archaeological sites, and conducts its activities to prevent unnecessary damage
to the property. As of July 31, 2009 and through September 16, 2009, immediately
prior to the consummation of the share exchange transaction between Kerrisdale
and Renovation, Kerrisdale did not have any compliance issue with such law as it
did not engage in any exploration activities during such
periods.
Employees
As of
July 31, 2009 and through September 16, 2009, immediately prior to the closing
of the share exchange transaction between Kerrisdale and Renovation, Kerrisdale
had no employees, other than its sole officer and director at such periods,
Mr. Huoqi Chen. Mr. Chen was a part-time employee and devoted about 10% of
his time to Kerrisdale’s operation. Kerrisdale did not have employment
agreements with Mr. Chen, nor did Kerrisdale have pension, health, annuity,
insurance, stock options, profit sharing or similar benefit plans.
Kerrisdale
is a smaller reporting company as defined by Rule 12b-2 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) and is not required to
provide the information under this item.
ITEM
1B.
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UNRESOLVED
STAFF COMMENTS
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Not applicable
Through
September 16, 2009, immediately prior to the closing of the share exchange
transaction between Kerrisdale and Renovation, Kerrisdale’s executive offices
were located at 750 Floor 8, Xueyuan Tower, No. 1 Zhichun Road, Beijing, PRC.
Mr. Huoqi Chen, Kerrisdale’s then sole officer and director, provided
this office space free of charge and Kerrisdale had no lease.
Subsequent
Event
Kerrisdale
continued to maintain the foregoing address until September 17, 2009, when it
consummated the share exchange transaction with Renovation and acquired the
business operations of Jo-Jo Drugstores. A description of the offices and
facilities of Jo-Jo Drugstores is set forth in the registration statement on
Form S-1 first filed with the SEC on December 21, 2009, and the amendments
thereto.
ITEM
3.
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LEGAL
PROCEEDINGS
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None
PART
II
ITEM
5.
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MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
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On May 1,
2008, Kerrisdale’s shares of common stock commenced trading on the
Over-The-Counter Bulletin Board (the “OTCBB”) under the symbol
“KMNG.OB”.
The
following table sets forth the high and low bid information for Kerrisdale’s
common stock for each quarter within the last two fiscal years ended July 31,
2009 and interim periods, as reported by the OTC Bulletin Board. The bid prices
reflect inter-dealer quotations, do not include retail markups, markdowns, or
commissions, and do not necessarily reflect actual transactions.
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Low
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High
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2009
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Quarter
ended September 30, 2009 (1)
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0.00 |
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0.00 |
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Quarter
ended June 30, 2009
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0.00 |
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0.00 |
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Quarter
ended March 31, 2009
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0.00 |
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0.00 |
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2008
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Quarter
ended December 31, 2008
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$ |
0.15 |
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$ |
0.55 |
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Quarter
ended September 30, 2008
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0.25 |
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1.12 |
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Quarter
ended June 30, 2008 (2)
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0.00 |
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1.11 |
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(1)
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Reflect
prices through September 16, 2009, immediately prior to the closing of the
share exchange transaction between Kerrisdale and
Renovation.
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(2)
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Reflect
prices beginning May 1, 2008
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Holders
As of
September 16, 2009, immediately prior to the closing of the share exchange
transaction between Kerrisdale and Renovation, there were 18 stockholders
of record of Kerrisdale’s common stock (not including beneficial owners who hold
shares at broker/dealers in “street name”).
Dividend
Through
September 16, 2009, Kerrisdale had not paid cash dividends in the past, nor are
cash dividends expected to be paid for the foreseeable future. Earnings, if any,
will be retained for the development of business.
ITEM 6.
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SELECTED FINANCIAL
DATA
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Not
applicable
ITEM 7.
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MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION
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SPECIAL
NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS
CERTAIN
STATEMENTS IN THIS REPORT, INCLUDING STATEMENTS IN THE FOLLOWING DISCUSSION ARE
WHAT ARE KNOWN AS “FORWARD-LOOKING STATEMENTS,” WHICH ARE BASICALLY STATEMENTS
ABOUT THE FUTURE. FOR THAT REASON, THESE STATEMENTS INVOLVE RISK AND
UNCERTAINTY SINCE NO ONE CAN ACCURATELY PREDICT THE FUTURE. WORDS SUCH AS
“PLANS,” “INTENDS,” “WILL,” “HOPES,” “SEEKS,” “ANTICIPATES,” “EXPECTS,” AND THE
LIKE, OFTEN IDENTIFY SUCH FORWARD-LOOKING STATEMENTS, BUT ARE NOT THE ONLY
INDICATION THAT A STATEMENT IS A FORWARD-LOOKING STATEMENT. SUCH
FORWARD-LOOKING STATEMENTS INCLUDE STATEMENTS CONCERNING OUR PLANS AND
OBJECTIVES WITH RESPECT TO THE PRESENT AND FUTURE OPERATIONS OF THE COMPANY, AND
STATEMENTS WHICH EXPRESS OR IMPLY THAT SUCH PRESENT AND FUTURE OPERATIONS WILL
OR MAY PRODUCE REVENUES, INCOME OR PROFITS. NUMEROUS FACTORS AND FUTURE
EVENTS COULD CAUSE THE COMPANY TO CHANGE SUCH PLANS AND OBJECTIVES, OR FAIL TO
SUCCESSFULLY IMPLEMENT SUCH PLANS OR ACHIEVE SUCH OBJECTIVES, OR CAUSE SUCH
PRESENT AND FUTURE OPERATIONS TO FAIL TO PRODUCE REVENUES, INCOME OR PROFITS.
THEREFORE, THE READER IS ADVISED THAT THE FOLLOWING DISCUSSION SHOULD BE
CONSIDERED IN LIGHT OF THE DISCUSSION OF RISKS AND OTHER FACTORS CONTAINED IN
THIS REPORT ON FORM 10-K AND IN THE COMPANY’S OTHER FILINGS WITH THE SECURITIES
AND EXCHANGE COMMISSION. NO STATEMENTS CONTAINED IN THE FOLLOWING
DISCUSSION SHOULD BE CONSTRUED AS A GUARANTEE OR ASSURANCE OF FUTURE PERFORMANCE
OR FUTURE RESULTS.
Overview
Kerrisdale
was incorporated December 19, 2006 under the laws of the State of Nevada.
Since inception and until the consummation of the share exchange
transaction with Renovation on September 17, 2009, Kerrisdale was a start-up,
exploration-stage, company and did not generate or realize any revenues from its
business activities. Kerrisdale did not own any interest in any
property, but merely had the right to conduct exploration activities on the
Kerrisdale Property, to which limited initial geological work was completed
in June 2007.
During
fiscal year ended July 31, 2009, Kerrisdale continued as a start-up company, and
did not generate or realize any revenues from its business operations during
such period. As a result, the
auditors that have audited Kerrisdale’s financial statements for its fiscal year
ended July 31, 2009 have
issued a going concern opinion that there is substantial doubt that Kerrisdale
could continue as an on-going business for the twelve months following July 31,
2009, unless additional capital could be raised to pay its operating
expenses.
Plan
of Operations
In June,
2007, the initial geological work on the Kerrisdale Property was completed and a
preliminary geological report was produced. As of fiscal year ended July 31,
2009, there was no plan to commence initial exploration due to the lack of funds
for such endeavor, estimated at approximately $15,000. At July 31, 2009,
Kerrisdale had approximately $691 of cash on hand, insufficient to cover basic
operating expenses and costs associated with preparation and filing of required
periodic reports for its next fiscal year.
As of
July 31, 2009, Kerrisdale did not have a specific plan to obtain additional
funding, and there was no assurance that it would have been able to do so.
Because of such uncertainties, Kerrisdale was seeking other business
opportunities as of July 31, 2009. Given that it had not generated any revenues
since inception, Kerrisdale’s plan of operations for the twelve months following
July 31, 2009 was to raise capital to fund its immediate working capital needs
and to seek a merger or acquisition candidate for a reverse acquisition
transaction.
Subsequent
Event
On
September 17, 2009, Kerrisdale completed the share exchange transaction with
Renovation and thus acquired the business of Jo-Jo Drugstores, a retail pharmacy
chain in the PRC. No assurance can be provided, however, that Jo-Jo Drugstores
will be successful in its business operations. For full disclosure on all the
risk factors involved in the business operations of Jo-Jo Drugstores, please
refer to the registration statement on Form S-1 first filed with the SEC on
December 21, 2009, and the amendments thereto.
Results
of Activities
From
Inception on December 19, 2006 to July 31, 2009
Kerrisdale
acquired the right to explore the Kerrisdale Property from John Morita, a former
officer and director, but did not own any interest in the Kerrisdale Property.
Initial geological work on the property was completed in June 2007, but no
further exploration had been carried out as of July 31, 2009, due to the lack of
funds available to do so.
Since
inception, Kerrisdale spent a total of $3,737 on staking and initial geological
work on the Kerrisdale Property.
Liquidity and Capital
Resources
As of
July 31, 2009, Kerrisdale had yet to generate any revenues from its business
activities.
In
January 2007, Kerrisdale issued 2,000,000 shares of common stock through a
private placement pursuant to Regulation S promulgated under the Securities Act
of 1933, as amended, to its then officers and directors, John Morita and John Y.
L. He, for total consideration of $4,000.00.
In March
2007, Kerrisdale completed a private placement of 1,200,000 restricted shares of
common stock to six individuals pursuant to Regulation S and raised $9,600.00.
In July
2007, Kerrisdale completed a private placement of 1,000,000 restricted shares of
common stock to 25 individuals pursuant to Regulation S and raised $20,000.
A July
31, 2009, Kerrisdale’s total current assets were $691, all in the form of cash,
and its total current liabilities were $8,800, in the form of accounts
payable.
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET
RISK
|
Not
applicable
ITEM
8.
|
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
|
The
financial statements and financial statement schedule are included in Part III,
Item 15 (a) (1) and (2) of this annual report.
ITEM
9.
|
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
|
None
ITEM
9A.
|
CONTROLS
AND PROCEDURES
|
Evaluation
of Disclosure Controls and Procedures
The
Registrant maintains a set of disclosure controls and procedures designed to
ensure that information required to be disclosed by it in the reports filed
under the Securities Exchange Act, is recorded, processed, summarized and
reported within the time periods specified by the SEC's rules and forms.
Disclosure controls are also designed with the objective of ensuring that this
information is accumulated and communicated to the Registrant’s management,
including its chief executive officer and chief financial officer, as
appropriate, to allow timely decisions regarding required
disclosure.
Based
upon their evaluation as of the end of the period covered by this report, the
Registrant’s chief executive officer and chief financial officer concluded that,
Kerrisdale’s disclosure controls and procedures were effective to ensure that
information required to be included in its periodic SEC filings is recorded,
processed, summarized, and reported within the time periods specified in the SEC
rules and forms.
Management’s
Report on Internal Control over Financial Reporting
The
Registrant’s management is responsible for establishing and maintaining adequate
internal control over financial reporting. The Registrant’s internal control
system is designed to provide reasonable assurance to its management and board
of directors regarding the preparation and fair presentation of published
financial statements.
The
Registrant’s management assessed the effectiveness of Kerrisdale’s internal
control over financial reporting as of July 31, 2009. In making this assessment,
it used the criteria set forth by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO) in Internal Control—Integrated
Framework. Based on its assessment the Registrant’s management believes
that, as of July 31, 2009, Kerrisdale’s internal control over financial
reporting was effective based on those criteria.
This
annual report does not include an attestation report of Kerrisdale’s registered
accounting firm regarding internal control over financial reporting. The
management’s report was not subject to attestation by Kerrisdale’s registered
public accounting firm pursuant to temporary rules of the SEC.
Changes
in Internal Control over Financial Reporting
No
changes in Kerrisdale's internal control over financial reporting have come to
management's attention during its fiscal quarter ended July 31, 2009 that have
materially affected, or are likely to materially affect, its internal control
over financial reporting.
Limitations
on Controls
Management
does not expect that the Registrant’s disclosure controls and procedures or
internal control over financial reporting will prevent or detect all error and
fraud. Any control system, no matter how well designed and operated, is based
upon certain assumptions and can provide only reasonable, not absolute,
assurance that its objectives will be met. Further, no evaluation of controls
can provide absolute assurance that misstatements due to error or fraud will not
occur or that all control issues and instances of fraud, if any, within the
Registrant have been detected.
ITEM
9B.
|
OTHER
INFORMATION
|
None
PART
III
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS,
AND CORPORATE GOVERNANCE
|
As of
September 16, 2009, immediately prior to the closing of the share exchange
transaction between Kerrisdale and Renovation, Kerrisdale’s executive officers
and directors and their respective ages and positions were as
follows:
Name
|
|
Age
|
|
Position
|
Houqi
Chen
|
|
61
|
|
President,
CEO, CFO, Secretary, Treasurer and Director
|
|
|
|
|
|
Biographical
Information
Huoqi
Chen
Mr. Huoqi
Chen has been Kerrisdale’s director, chief financial officer, principal
accounting officer, secretary and treasurer since August 2008, and its president
and chief executive officer since September, 2008. Mr. Chen is also currently
the president of Beijing Green Source Technology Corp (“Beijing Green Source”)
and Beijing CNC Technology Corp (“CNC”). Beijing Green Source is a
wastewater treatment company. CNC Technology develops composite
reverse osmosis membrane technologies for application in the wastewater
treatment industries. Mr. Chen has acted as president for these two
companies since 1995. From May 1992 to August 1995, Mr. Chen served
as president of Beijing Yuanquan New Technology Corp. Mr. Chen
received his degree in Industrial Enterprise Management from the Beijing
Institute of Economics in 1982. Mr. Chen also received his degree in
Industrial Economy Management from the China Academy of Social Sciences in
1985.
Family
Relationships
None
Involvement
in Certain Legal Proceedings
None
Compliance
with Section 16(a) of the Exchange Act
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires a company’s
officers and directors, and persons who own more than 10% of a registered class
of such company’s equity securities, to file reports of ownership of Form 3 and
changes in ownership on Form 4 or Form 5 with the SEC. Such officers,
directors and 10% stockholders are also required by SEC rules to furnish the
company with copies of all Section 16(a) forms they file. Based solely on
its review of the copies of such forms received by it, Kerrisdale believes that,
as of July 31, 2009, all Section 16(a) filing requirements applicable to its
officers, directors and 10% stockholders were satisfied.
Code
of Ethics
Through
September 16, 2009, Kerrisdale had not adopted a code of ethics.
Audit
Committee Expert
Through
September 16, 2009, Kerrisdale did not have an audit committee. As such,
it also did not have an “audit committee financial expert” designated during
such periods.
ITEM
11.
|
EXECUTIVE
COMPENSATION
|
The
following summary compensation table indicates the cash and non-cash
compensation earned during the fiscal years ended July 31, 2009 and 2008 by (i)
Kerrisdale’s chief executive officer (principal executive officer), (ii) the two
most highly compensated executive officers other than its chief executive
officer who were serving as executive officers at the end of the fiscal year
ended July 31, 2009, whose total compensation exceeded $100,000 during such
fiscal year ends, and (iv) up to two additional individuals for whom disclosure
would have been provided but for the fact that the individual was not serving as
an executive officer at the end of the fiscal year ended July 31, 2009, whose
total compensation exceeded $100,000 during such fiscal year ends.
Summary
Compensation
SUMMARY COMPENSATION TABLE
|
|
Name
|
|
Fiscal
Year
ended
July 31,
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards
( $)
|
|
|
Option
Awards
($)
|
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
|
Nonqualified
Deferred
Compensation
Earnings
($)
|
|
|
All Other
Compensation
( $)
|
|
|
Total
($)
|
|
Huoqi
|
|
2009
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
Chen
(1)
|
|
2008
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
John
S.
|
|
2009
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
Morita
(2)
|
|
2008
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
John
Yinglong
|
|
2009
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
He
(3)
|
|
2008
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
______________________
(1) Mr.
Chen was appointed as Kerrisdale’s president and chief executive officer on
September 4, 2008, and as its chief financial officer, treasurer and secretary
on August 12, 2008. Mr. Chen resigned from all of these positions on September
17, 2009 in connection with the share exchange transaction between Kerrisdale
and Renovation, as disclosed elsewhere in this report.
(2) Mr.
Morita was appointed as Kerrisdale’s president and chief executive officer on
December 19, 2006, and resigned from these positions on September 4, 2008.
Accordingly, the compensation for Mr. Morita for the fiscal year ended July 31,
2009 reported above reflects up to his date of resignation.
(3) Mr.
He was appointed as Kerrisdale’s chief financial officer, treasurer and
secretary on December 19, 2006, and resigned from these positions on August 12,
2008. Accordingly, the compensation for Mr. He for the fiscal year ended July
31, 2009 reported above reflects up to his date of resignation.
Outstanding
Equity Awards at Fiscal Year-End
There
were no unexercised options, unvested stock awards or equity incentive plan
awards for any of the above-named executive officers outstanding as of July 31,
2009.
Employment
Agreements, Termination of Employment and Change-in-Control Arrangements with
our Executive Officers
As of
July 31, 2009, Kerrisdale did not have employment agreements with any of its
executive officers, nor any compensatory plans or arrangements resulting from
the resignation, retirement or any other termination of any of its executive
officers, from a change-in-control, or from a change in any executive officer’s
responsibilities following a change-in-control.
Compensation
of Directors
Kerrisdale
paid no compensation to its directors for any services provided as a director
during the fiscal year ended July 31, 2009. There were no other formal or
informal understandings or arrangements relating to
compensation.
ITEM
12.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDERS MATTERS
|
The
following table sets forth information regarding the beneficial ownership of our
common stock as of September 16, 2009, immediately prior to the closing of the
share exchange transaction between Kerrisdale and Renovation. The information in
this table provides the ownership information as of such date for (i) each
person known by Kerrisdale to be the beneficial owner of more than 5% of
Kerrisdale’s common stock; (ii) each of its executive officers and directors;
(iii) and such executive officers and directors as a group.
Beneficial
ownership has been determined in accordance with the rules and regulations of
the SEC and includes voting or investment power with respect to the shares.
Unless otherwise indicated, the persons named in the table below have sole
voting and investment power with respect to the number of shares indicated as
beneficially owned by them. Common stock beneficially owned and percentage
ownership is based on 4,200,000 shares outstanding as of September 16, 2009.
There are no outstanding options which are exercisable or will be exercisable
within 60 days of September 16, 2009.
Name and Address
|
|
Number of Shares
Beneficially Owned
|
|
|
Percent of Class (1)
|
|
Huoqi
Chen (2)
Floor
8, Xuequan Tower
No.
1 Zhichun Road
Beijing,
PRC 100083
|
|
|
0 |
|
|
|
0 |
|
John
S. Morita
145
West 44th Avenue
Vancouver,
BC V5Y 2V3
Canada
|
|
|
1,000,000 |
|
|
|
23.81 |
% |
John
Yinglong He
4620
Coventry Drive
Richmond,
BC V7C 4R2
Canada
|
|
|
1,000,000 |
|
|
|
23.81 |
% |
All
Officers and Directors as a Group (1 total)
|
|
|
0 |
|
|
|
0 |
|
(1)
|
Unless
otherwise noted, the percentage of outstanding shares of common stock is
based upon 4,200,000 shares outstanding as of September 16,
2009.
|
(2)
|
Mr.
Chen was Kerrisdale’s sole officer and director as of September 16, 2009,
immediately prior to the closing of the share exchange transaction with
Renovation.
|
ITEM
13.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE
|
Transactions
with Related Persons
In
January 2007, Kerrisdale issued 1,000,000 shares each to John Morita and
John Y.L. He, who were at that time serving as Kerrisdale’s officers and
directors. The total consideration for issuance of such shares
was $4,000. The shares were sold in a private placement transaction
pursuant to Regulation S promulgated under the Securities Act of 1933, as
amended.
Director
Independence
As of
September 16, 2009, immediately prior to the closing of the share exchange
transaction between Kerrisdale and Renovation, Kerrisdale’s sole director at
that time, Mr. Huoqi Chen, did not qualify as an independent director as
determined under the Rule IM-5605(a)(2) of the NASDAQ Listing
Rules.
ITEM
14.
|
PRINCIPAL
ACCOUNTING FEES AND SERVICES
|
Audit
Fees
The
aggregate fees billed by Madsen & Associates, CPA’s Inc. (“Madsen”) for
audit of Kerrisdale’s financial statements for the fiscal years ended July 31,
2009 and 2008 were $3,625.00 and $3,885.00, respectively.
Audit
Related Fees
Madsen
did not bill Kerrisdale any amounts for assurance and related services that were
related to its audit or review of Kerrisdale’s financial statements during the
fiscal years ended July 31, 2009 and 2008.
Tax
Fees
Madsen
did not bill Kerrisdale any amounts for tax compliance, advice and planning for
the fiscal years ended July 31, 2009 and 2008.
All
Other Fees
Madsen
did not bill Kerrisdale for any products and services other than the foregoing
during the fiscal years ended July 31, 2009 and 2008.
ITEM
15.
|
EXHIBITS,
FINANCIAL STATEMENT SCHEDULES
|
(1) Financial
Statements
The
following financial statements of Kerrisdale are included in Part II, Item 8 of
this report:
Report of
Independent Registered Public Accounting Firm
Balance
Sheets at July 31, 2009 and 2008
Statement
of Operations for the Years Ended July 31, 2009 and 2008 and from December 19,
2006 (date of inception) to July 31, 2009
Statement
of Changes in Stockholders’ Equity from December 19, 2006 (date of inception) to
July 31, 2009
Statement
of Cash Flows for the Years Ended July 31, 2009 and 2008 and from December 19,
2006 (date of inception) to July 31, 2009
Notes to
Financial Statements
(2)
Financial Statement Schedules
Schedules
are omitted because the required information is not present or is not present in
amounts sufficient to require submission of the schedule or because the
information required is given in the consolidated financial statements or the
notes thereto.
(3)
Exhibits
Exhibit
Index
Exhibit
Number
|
|
Description
|
3.1
|
|
Articles
of Incorporation of Kerrisdale (1)
|
3.2
|
|
Certificate
of Amendment to Articles of Incorporation of Kerrisdale filed with the
Nevada Secretary of State on July 14, 2008 (2)
|
3.2
|
|
Bylaws
(1)
|
3.3
|
|
Text
of Amendments to the Bylaws (2)
|
4.1
|
|
Specimen
of Common Stock Certificate (1)
|
31.1
|
|
Certifications
pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act
of 1934, as amended, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*
|
31.2
|
|
Certifications
pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act
of 1934, as amended, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*
|
32.1
|
|
Certifications
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.*
|
32.2
|
|
Certifications
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of
2002.*
|
* Filed
Herewith
(1)
|
Incorporated
by reference from the Registrant’s Registration Statement on Form SB-2
filed on November 28, 2007.
|
(2)
|
Incorporated
by reference from the Registrant’s Current Report on Form 8-K filed on
July 15, 2008
|
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
|
CHINA
JO-JO DRUGSTORES, INC. (formerly known as KERRISDALE MINING
CORPORATION)
|
|
|
|
Date:
April 11, 2010
|
By:
|
/s/
Lei Liu
|
|
|
Lei
Liu
|
|
|
Chief
Executive Officer
|
|
|
(Principal
Executive Officer)
|
|
|
|
Date:
April 11, 2010
|
By:
|
/s/
Bennet P. Tchaikovsky
|
|
|
Bennet
P. Tchaikovsky
|
|
|
Chief
Financial Officer
|
|
|
(Principal
Accounting
Officer)
|
In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Name
|
|
Title
|
|
Date
|
|
|
Chief
Executive Officer and Director
|
|
April
11, 2010
|
/s/ Lei Liu
|
|
(Principal
Executive Officer)
|
|
|
Lei
Liu
|
|
|
|
|
|
|
Chief
Financial Officer
|
|
April
11, 2010
|
/s/ Bennet P. Tchaikovsky
|
|
(Principal
Financial and Accounting Officer)
|
|
|
Bennet
P. Tchaikovsky
|
|
|
|
|
|
|
|
|
|
/s/ Li Qi
|
|
Secretary
and Director
|
|
April
11, 2010
|
Li
Qi
|
|
|
|
|
|
|
|
|
|
/s/ Chong’an Jin
|
|
Director
|
|
April
11, 2010
|
Chong’an
Jin
|
|
|
|
|
|
|
|
|
|
/s/ Shike Zhu
|
|
Director
|
|
April
11, 2010
|
Shike
Zhu
|
|
|
|
|
|
|
|
|
|
/s/ Yuehai Ke
|
|
Director
|
|
April
11, 2010
|
Yuehai
Ke
|
|
|
|
|
|
|
|
|
|
/s/ Marc Thomas Serrio
|
|
Director
|
|
April
11, 2010
|
Marc
Thomas Serrio
|
|
|
|
|
|
|
|
|
|
/s/ Shuizhen Wu
|
|
Director
|
|
April
11, 2010
|
Shuizhen
Wu
|
|
|
|
|
|
|
|
|
|
/s/ Xiaomeng Yu
|
|
Director
|
|
April
11, 2010
|
Xiaomeng
Yu
|
|
|
|
|
|
|
|
|
|
/s/ Bowen Zhao
|
|
Director
|
|
April
11, 2010
|
Bowen
Zhao
|
|
|
|
|
KERRISDALE
MINING CORPORATION
Pre-Exploration
Stage Company
AUDITED
FINANCIAL STATEMENTS
FOR
THE FISCAL YEAR ENDED July 31, 2009
|
Page
|
Report
of Independent Registered Public Accounting Firm
|
18
|
Balance
sheet
|
19
|
Statements
of operations
|
20
|
Statements
of stockholder’s (deficit)/ equity
|
21
|
Statements
of cash flows
|
22
|
Notes
to financial statements
|
23
|
MADSEN
& ASSOCIATES, CPA’s INC.
|
|
|
684
East Vine St. #3
|
Certified
Public Accountants and Business Consultants
|
|
Murray,
Utah 84107
|
|
|
Telephone
801-268-2632
|
|
|
Fax
801-262-3978
|
Board of
Directors
China
Jo-Jo Drugstores, Inc.
(formerly
Kerrisdale Mining Corporation)
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have
audited the accompanying balance sheets of Kerrisdale
Mining Corporation (pre-exploration
stage company) at July 31, 2009 and 2008, and the related statements
of operations, stockholders' equity, and cash flows for the years ended July 31,
2009 and 2008 and the period December 19, 2006
(date of inception) to July 31, 2009. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The company is not
required to nor were we engaged to perform an audit of its internal control over
financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness for the company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Kerrisdale
Mining Corporation (pre-exploration
stage company) at July 31, 2009 and 2008, and the related statements
of operations, and cash flows for the years ended July 31, 2009 and
2008 and the period December 19, 2006 (date of
inception) to July 31, 2009 in conformity with accounting
principles generally accepted in the United States of America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. The Company will
need additional working capital for its planned activity
and to service any debt, which raises substantial doubt about its
ability to continue as a going concern. Management's plans in regard to these
matters are described in the notes to the financial statements. These financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
Murray,
Utah
April 6,
2010
s/Madsen
& Associates, CPA’s Inc.
KERRISDALE
MINING CORPORATION
Pre-Exploration
Stage Company
BALANCE
SHEETS
July
31, 2009 and 2008
|
|
July 31,
2009
|
|
|
July 31,
2008
|
|
ASSETS
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$ |
691 |
|
|
$ |
1,606 |
|
|
|
|
|
|
|
|
|
|
Total
Current Assets
|
|
$ |
691 |
|
|
$ |
1,606 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY - deficit
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$ |
8,800 |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
Total
Current Liabilities
|
|
$ |
8,800 |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY - deficit
|
|
|
|
|
|
|
|
|
Preferred
stock
|
|
|
|
|
|
|
|
|
10,000,000
shares authorized, at $.001 par value, none outstanding
|
|
|
- |
|
|
|
- |
|
Common
stock
|
|
|
|
|
|
|
|
|
500,000,000
shares authorized, at $.001 par value, 4,200,000 shares issued and
outstanding
|
|
|
4,200 |
|
|
|
4,200 |
|
Capital
in excess of par value
|
|
|
29,891 |
|
|
|
29,891 |
|
Accumulated
deficit during pre-exploration stage
|
|
|
(42,200 |
) |
|
|
(32,485 |
) |
|
|
|
|
|
|
|
|
|
Total
Stockholders' Equity
|
|
$ |
691 |
|
|
$ |
1,606 |
|
The
accompanying notes are an integral part of these financial
statements
KERRISDALE
MINING CORPORATION
Pre-Exploration
Stage Company
STATEMENT
OF OPERATIONS
For
the Years Ended July 31, 2009 and 2008
And
the Period December 19, 2006 (date of inception) to July 31,
2009
|
|
July 31,
2009
|
|
|
July 31,
2008
|
|
|
Dec 19, 2006 to
July 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
$ |
- |
|
|
$ |
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative
expenses
|
|
|
9,715 |
|
|
|
28,748 |
|
|
|
42,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET OPERATING
LOSS
|
|
$ |
(9,715 |
) |
|
$ |
(28,748 |
)
|
|
$ |
(42,200 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
PROFIT PER COMMON SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted
|
|
$ |
- |
|
|
$ |
(.01 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVERAGE
OUTSTANDING SHARES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
(stated in 1,000's)
|
|
|
4,200 |
|
|
|
4,200 |
|
|
|
|
|
The
accompanying notes are an integral part of these financial
statements
KERRISDALE
MINING CORPORATION
Pre-Exploration
Stage Company
STATEMENT
OF CHANGES IN STOCKHOLDERS' EQUITY
Period
December 19, 2006 (date of inception) to July 31, 2009
|
|
Common Stock
|
|
|
Contributed
|
|
|
Accumulated
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
December 19, 2006
|
|
|
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common stock for cash
|
|
|
4,200,000 |
|
|
|
4,200 |
|
|
|
29,891 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
operating loss inception to July 31, 2007
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(3,737 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
operating loss for year ended July 31, 2008
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(28,748 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
July 31, 2008
|
|
|
4,200,000 |
|
|
|
4,200 |
|
|
|
29,891 |
|
|
|
(32,485 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
operating loss for year ended July 31, 2009
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(9,715 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
July 31, 2009
|
|
|
4,200,000 |
|
|
$ |
4,200 |
|
|
$ |
29,891 |
|
|
$ |
(42,200 |
) |
The
accompanying notes are an integral part of these financial
statements
KERRISDALE
MINING CORPORATION
Pre-Exploration
Stage Company
STATEMENT
OF CASH FLOWS
For
the Years Ended July 31, 2009 and 2008
And
the Period December 19, 2006 (date of inception) to July 31, 2009
|
|
July 31,
2009
|
|
|
July 31,
2008
|
|
|
Dec 19, 2006 to
July 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$ |
(9,715 |
) |
|
$ |
(28,748 |
) |
|
$ |
(42,200 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
to reconcile net loss to net cash provided by operating
activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes
in accounts payable
|
|
|
8,800 |
|
|
|
- |
|
|
|
8,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Change in Cash from Operations
|
|
|
(915 |
) |
|
|
(28,748 |
) |
|
|
(33,400 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from issuance of common stock
|
|
|
- |
|
|
|
- |
|
|
|
34,091 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Change in Cash
|
|
|
(915 |
) |
|
|
(28,748 |
) |
|
|
691 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
at Beginning of Period
|
|
|
1,606 |
|
|
|
30,354 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
at End of Period
|
|
$ |
691 |
|
|
$ |
1,606 |
|
|
$ |
691 |
|
The
accompanying notes are an integral part of these financial
statements
KERRISDALE
MINING CORPORATION
Pre-Exploration
Stage Company
NOTES
TO FINANCIAL STATEMENTS
July
31, 2009
1. ORGANIZATION
Kerrisdale
Mining Corporation (the “Company”) was incorporated under the laws of the state
of Nevada on December 19, 2006, with authorized common stock of 75,000,000
shares with a par value of $.001. The Company increased the authorized common
stock to 500,000,000 shares and added authorized preferred stock of 10,000,000
shares, all with a par value of $.001, on July 14, 2008. The terms of
the preferred shares have not been determined.
The
Company was organized for the purpose of acquiring and developing mineral
properties. A mineral claim with unknown reserves had been acquired,
although the Company has not established the existence of a commercially minable
ore deposit and therefore is considered to be in the pre-exploration
stage.
2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
Accounting
Methods
The
Company recognizes income and expenses based on the accrual method of
accounting.
Dividend
Policy
The
Company has not yet adopted a policy regarding payment of
dividends.
Income
Taxes
The
Company utilizes the liability method of accounting for income
taxes. Under the liability method deferred tax assets and liabilities
are determined based on the differences between financial reporting and the tax
bases of the assets and liabilities and are measured using the enacted tax rates
and laws that will be in effect, when the differences are expected to
reverse. An allowance against deferred tax assets is recorded, when
it is more likely than not, that such tax benefits will not be
realized.
On July
31, 2009, the Company had a net operating loss available for carry forward of
$42,200. The income tax benefit of approximately $13,000 from the carry forward
has been fully offset by a valuation reserve because the use of the future tax
benefit is doubtful since the Company has been unable to project a reliable
estimated net income for the future. The net operating loss will
expire starting in 2027 through 2029.
Financial and Concentrations
Risk
The
Company does not have any concentration or related financial credit
risk.
Basic and Diluted Net Income
(Loss) Per Share
Basic net
income (loss) per share amounts are computed based on the weighted average
number of shares actually outstanding. Diluted net income (loss) per share
amounts are computed using the weighted average number of common shares and
common equivalent shares outstanding as if shares had been issued on the
exercise of any common share rights unless the exercise becomes antidilutive and
then only the basic per share amounts are shown in the report.
Statement of Cash
Flows
For the
purposes of the statement of cash flows, the Company considers all highly liquid
investments with a maturity of three months or less to be cash
equivalents.
Revenue
Recognition
Revenue
is recognized on the sale and delivery of a product or the completion of a
service provided.
Advertising and Market
Development
Advertising
and market development costs are expensed as incurred.
Estimates and
Assumptions
Management
uses estimates and assumptions in preparing financial statements in accordance
with accounting principles generally accepted in the United States of
America. Those estimates and assumptions affect the reported amounts
of the assets and liabilities, the disclosure of contingent assets and
liabilities, and the reported revenues and expenses. Actual results
could vary from the estimates that were assumed in preparing these financial
statements.
Financial
Instruments
The
carrying amounts of financial instruments are considered by management to be
their estimated fair values due to their short term maturities.
Recent Accounting
Pronouncements
The
Company does not expect that the adoption of other recent accounting
pronouncements will have a material impact on its financial
statements.
3.
ACQUISITION OF MINING CLAIMS
The
Company was organized for the purpose of exploring and developing the mineral
potential of the Kerrisdale Property located in south-central British Columbia,
Canada. The Kerrisdale Property consists of 1 Cell claim totaling 369.5 hectares
registered on January 29, 2007 with an expiration date of January 29,
2010.
The claim
has not been proven to have commercially recoverable reserves and therefore the
acquisition and exploration costs have been expensed.
4. CAPITAL
STOCK
During
the period from December 19, 2006 (date of inception) to July 31, 2009, the
Company issued 4,200,000 shares of common stock in private placements for net
proceeds of $ 34,091.
5.
SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
The
Company’s sole officer- director does not have any of the outstanding common
capital stock.
6. GOING
CONCERN
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. The Company does not have sufficient working
capital for its planned activity and to service any future debt, which raises
substantial doubt about its ability to continue as a going concern.
Continuation
of the Company as a going concern is dependent upon obtaining additional working
capital and the management of the Company has developed a strategy, which it
believes will accomplish this objective through short term loans from an
officer-director, and additional equity investment, which will enable the
Company to continue operations for the coming year.
7. SUBSEQUENT
EVENTS
Effective
September 17, 2009, the Company entered into a share exchange agreement by
issuing 15,800,000 shares of common stock for 100% of the equity ownership in
Renovation Investment (Hong Kong) Co., Ltd., a Hong Kong company (“Renovation”).
The transaction is treated as a reverse acquisition with Renovation deemed as
the accounting acquirer. The specifics of this transaction are
available on the Form 8-K filed with the Securities and Exchange Commission on
September 24, 2009.
The name
of the Company was changed from “Kerrisdale Mining Corporation” to “China Jo-Jo
Drugstores, Inc.” on September 24, 2009, as a result of the foregoing reverse
acquisition.
No
material subsequent events have been found to the date of this
report.