10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission File Number: 000-56013

JRSIS HEALTH CARE CORPORATION.  

(Exact name of Registrant as specified in its charter)

Florida	46-4562047
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)

No. 38 South Street 

Hulan District, Harbin City, 

Heilongjiang Province, China 150025

(Address, including zip code, and telephone number, including area code, 

of Registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered

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 (Exchange Act) 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  ☒  No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).    Yes  ☒  No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ☐  No  ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of the date of filing of this report, there were outstanding 18,056,331 shares of the issuer’s common stock, par value $0.001 per share.

TABLE OF CONTENTS

		Page
PART I – FINANCIAL INFORMATION		1
Item 1	Consolidated Financial Statements	F-1
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2
Item 3	Quantitative and Qualitative Disclosures About Market Risk	9
Item 4	Controls and Procedures	9
PART II – OTHER INFORMATION		10
Item 1	Legal Proceedings	10
Item 1A	Risk Factors	10
Item 2	Unregistered Sale of Equity Securities and Use of Proceeds	10
Item 3	Defaults Upon Senior Securities	10
Item 4	Mine Safety Disclosures	10
Item 5	Other Information	10
Item 6	Exhibits	11
	Signatures	12

i

PART I – FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Item Regulation S-X, Rule 10-01(c) Interim Financial Statements, and, therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders’ equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the nine months ended September 30, 2020 are not necessarily indicative of the results that can be expected for the year ended December 31, 2020.

1

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
JRSIS HEALTH CARE CORPORATION
Consolidated Balance Sheets — September 30, 2020 (Unaudited) and December 31, 2019	F-2
Consolidated Statements of Operations and Comprehensive Income for the Three and Nine Months Ended September 30, 2020 and 2019 (Unaudited)	F-3
Consolidated Statements of Shareholders’ Equity for the Three and Nine Months Ended September 30, 2020 and 2019 (Unaudited)	F-4
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2020 and 2019 (Unaudited)	F-5
Notes to Consolidated Financial Statements (Unaudited)	F-6 - F-22

F-1

JRSIS HEALTH CARE CORPORATION

CONSOLIDATED BALANCE SHEETS

(AMOUNTS IN USD, EXCEPT SHARES)

	September 30,			December 31,
	2020			2019
	(Unaudited)
Assets
Current Assets:
Cash and cash equivalents	$	812,102		$	1,971,129
Accounts receivable, net		2,933,622			4,583,835
Inventories		1,425,682			1,072,741
Other receivables		52,827			47,385
Prepayments		784,097			1,301,351
Deferred expenses		435,881			257,203
Deposits for capital leases-current portion		-			280,422
Total current assets		6,444,211			9,514,066
Construction in progress		658,473			-
Property and equipment, net		28,663,983			22,838,622
Long term deferred expenses		2,519,141			2,978,936
Deposits for capital leases		671,439			655,569
Right-of-use assets		14,058,988			15,641,489
Total assets	$	53,016,235		$	51,628,682
Liabilities and shareholders’ equity
Current Liabilities:
Accounts payable	$	5,847,335		$	3,619,442
Notes payable		528,441			358,382
Deposits received		13,560			24,487
Amount due to related parties		438,246			1,794,540
Other payable		52,694			10,752
Deferred tax payable-current		271,421			245,943
Tax payable		-			12,047
Payroll payable		490,238			1,395,034
Lease obligation-current portion		1,753,200			2,680,421
Convertible note		-			774,567
Total current liabilities		9,395,135			10,915,615
Deferred tax payable		2,888,346			1,702,752
Warrant liabilities		42,818			110,840
Lease obligation		12,391,531			13,295,933
Other capital lease payable		2,680,038			2,616,691
Total liabilities	$	27,397,868		$	28,641,831
Shareholders’ equity
Common stock: $0.001 par value, 100,000,000 shares authorized; 18,056,331 and 17,975,999 issued and outstanding at September 30, 2020 and December 31, 2019, respectively		18,056			17,976
Additional Paid-in capital		23,165,865			22,825,787
Retained earnings		(5,575,971	)		(6,788,652	)
Other comprehensive income		(875,112	)		(1,236,873	)
Total shareholders’ equity of the Company		16,732,838			14,818,238
Non-controlling interest		8,885,529			8,168,613
Total shareholders’ equity		25,618,367			22,986,851
Total liabilities and shareholders’ equity	$	53,016,235		$	51,628,682

See notes to consolidated financial statements

F-2

JRSIS HEALTH CARE CORPORATION 

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME 

(AMOUNTS IN USD, EXCEPT SHARES) (UNAUDITED)

	Three Months Ended  September 30,						Nine Months Ended  September 30,
	2020			2019			2020			2019
Revenue:
Pharmaceuticals	$	2,462,951		$	2,544,030		$	6,054,148		$	7,946,920
Patient services		7,553,134			5,219,170			16,966,307			14,960,053
Total revenue		10,016,085			7,763,200			23,020,455			22,906,973
Operating costs and expenses:
Cost of pharmaceuticals sold		1,798,004			1,670,367			4,328,675			6,040,467
Medical consumables		2,852,588			1,382,547			5,589,590			3,251,086
Salaries and benefits		2,067,965			1,740,684			5,936,083			4,847,107
Office supplies		488,478			509,647			1,048,658			1,189,712
Vehicle expenses		39,381			69,710			167,199			227,787
Utilities expenses		87,344			90,982			392,827			388,632
Rentals and leases		73,174			24,112			159,782			80,864
Advertising and promotion expenses		9,118			13,194			9,256			39,659
Interest expense		317,704			276,679			774,471			814,032
Professional fee		20,791			114,130			40,385			219,045
Loss of fair value of convertible notes		-			152,904			(322,363	)		428,093
Warrant expense		(263,953	)		96,800			181,136			173,445
Depreciation		649,726			551,810			1,808,738			1,644,389
Total operating costs and expenses		8,140,320			6,693,566			20,114,437			19,344,318
Earnings from operations before other income and income taxes		1,875,765			1,069,634			2,906,018			3,562,655
Other (expenses)		(5,620	)		(3,294	)		(17,026	)		(12,662	)
Earnings from operations before income taxes		1,870,145			1,066,340			2,888,992			3,549,993
Income tax		837,659			221,641			1,138,507			637,475
Net income		1,032,486			844,699			1,750,485			2,912,518
Less: net income attributable to non-controlling interests		266,545			369,366			537,804			1,113,855
Net income attributable to the Company	$	765,941		$	475,333		$	1,212,681		$	1,798,663
Comprehensive income:
Foreign currency translation adjustment attributable to non-controlling interests		298,571			(295,109	)		179,112			(305,737	)
Foreign currency translation adjustment attributable to the Company		648,903			(686,463	)		361,761			(712,766	)
Comprehensive income	$	1,979,960		$	(136,873	)	$	2,291,358		$	1,894,015
Less: Comprehensive income attributable to non-controlling interests		565,116			74,257			716,916			808,118
Comprehensive income attributable to the Company	$	1,414,844		$	(211,130	)	$	1,574,442		$	1,085,897
Basic earnings per share	$	0.0425		$	0.0264		$	0.0673		$	0.1098
Diluted earnings per share		0.0424		$	0.0263		$	0.0672		$	0.1097
Weighted average number of shares outstanding (Basic)		18,042,109			18,013,200			18,021,848			16,380,863
Weighted average number of shares outstanding (Diluted)		18,063,109			18,055,867			18,059,240			16,398,532

See notes to consolidated financial statements

F-3

JRSIS HEALTH CARE CORPORATION

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY 

(AMOUNTS IN USD, EXCEPT SHARES) 

	Common stock				Retained			Other comprehensive			Additional paid-in		Non- Controlling			Total  Shareholders’
	Quantity		Amount		Earnings			income			capital		Interest			equity
Balance at December 31, 2018		14,975,000	$	14,975	$	12,913,912		$	(983,109	)	$	2,191,363	$	7,895,376		$	22,032,517
Net income		-		-		668,588			-			-		288,799			957,387
Foreign currency translation adjustment		-		-		-			354,157			-		170,771			524,928
Balance at March 31, 2019		14,975,000	$	14,975	$	13,582,500		$	(628,952	)	$	2,191,363	$	8,354,946		$	23,514,832
Net income		-		-		654,742			-			-		455,690			1,110,432
Foreign currency translation adjustment		-		-		-			(380,460	)		-		(181,399	)		(561,859	)
Stock dividend		2,994,999		2,995		(12,913,912	)		-			12,910,917		-			-
Shares issued		40,000		40		-			-			299,960		-			300,000
Balance at June 30, 2019		18,009,999		18,010		1,323,330			(1,009,412	)		15,402,240		8,629,237			24,363,405
Net income		-		-		475,333			-			-		369,366			844,699
Foreign currency translation adjustment		-		-		-			(686,463	)		-		(295,109	)		(981,572	)
Shares issued		6,000		6		-			-			46,794		-			46,800
Balance at September 30, 2019		18,015,999		18,016		1,798,663			(1,695,875	)		15,449,034		8,703,494			24,273,332

	Common stock				Retained			Other  comprehensive			Additional paid-in		Non- Controlling			Total  Shareholders’
	Quantity		Amount		Earnings			income			capital		Interest			equity
Balance at December 31, 2019		17,975,999	$	17,976	$	(6,788,652	)	$	(1,236,873	)	$	22,825,787	$	8,168,613		$	22,986,851
Net income		-		-		155,523			-			-		159,394			314,917
Shares issued		40,332		40		-			-			260,118		-			260,158
Foreign currency translation adjustment		-		-		-			(343,827	)		-		(144,115	)		(487,942	)
Balance at March 31, 2020		18,016,331	$	18,016	$	(6,633,129	)	$	(1,580,700	)	$	23,085,905	$	8,183,892		$	23,073,984
Net income		-		-		291,217			-			-		111,865			403,082
Foreign currency translation adjustment		-		-		-			56,685			-		24,656			81,341
Balance at June 30, 2020		18,016,331	$	18,016	$	(6,341,912	)	$	(1,524,015	)	$	23,085,905	$	8,320,413		$	23,558,407
Net income		-		-		765,941			-			-		266,545			1,032,486
Foreign currency translation adjustment		-		-		-			648,903			-		298,571			947,474
Shares issued		40,000		40		-			-			79,960		-			80,000
Balance at September 30, 2020		18,056,331	$	18,056	$	(5,575,971	)	$	(875,112	)	$	23,165,865	$	8,885,529		$	25,618,367

See notes to consolidated financial statements

F-4

JRSIS HEALTH CARE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS 

(AMOUNTS IN USD, EXCEPT SHARES)

	Nine Months Ended September 30,
	2020			2019
	(Unaudited)			(Unaudited)
Cash Flows From Operating Activities
Net income	$	1,750,485		$	2,912,518
Adjustments to reconcile net income to net cash provided by operating activities:		-
Depreciation		1,808,738			1,644,389
Interest expense		774,471			-
Prepaid commitment expense		-			300,000
Convertible notes expense		(322,363	)		428,093
Warrant expense		181,136			173,445
Changes in operating assets and liabilities:
Accounts receivable, net		1,712,746			593,886
Inventories		(317,979	)		(97,062	)
Amount due from related parties		(20,016	)		143,381
Prepayments and other current assets		825,753			66,226
Accounts payable		2,238,219			(633,301	)
Amount due to related parties		(1,359,833	)		2,716,217
Deposits received		(11,203	)		(7,138	)
Accrued expenses and other current liabilities		247,668			596,572
Net cash provided by operating activities		7,507,822			8,837,226
Cash Flows From Investing Activities
Purchases of property and equipment		(4,679,397	)		(2,936,684	)
Prepayment for property and equipment acquisition		(296,264	)		637,708
Payment of construction in progress		(640,363	)		(1,161,676	)
Payment for Convertible notes		(774,567	)		-
Net cash (used in) investing activities		(6,390,591	)		(3,460,652	)
Cash Flows From Financing Activities
Payments of finance lease obligations		(1,869,766	)		(7,824,219	)
Interest expense		(774,471	)		814,032
Derivative financial instruments		-			724,500
Proceeds from finance lease		-			2,964,017
Non-cash issuance of common stock		340,158			(253,200	)
Net cash (used in) financing activities		(2,304,079	)		(3,574,870	)
Effect of exchange rate fluctuation on cash and cash equivalents		27,821			(48,969	)
Net (decrease) increase in cash and cash equivalents		(1,159,027	)		1,752,735
Cash and cash equivalents, beginning of period		1,971,129			256,450
Cash and cash equivalents, ending of period	$	812,102		$	2,009,185
Supplemental disclosure of cash flow information
Cash paid for income taxes		(1,138,507	)		(637,475	)
Cash paid for interest		(774,471	)		(814,032	)

See notes to consolidated financial statements

F-5

JRSIS HEALTH CARE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTS IN USD)

NOTE 1. DESCRIPTION OF BUSINESS AND ORGANIZATION

JRSIS Health Care Corporation (the “Company” or “JRSS”) was incorporated on November 20, 2013 under the laws of the State of Florida. In December 2013 JRSS acquired 100% of the equity in JRSIS Health Care Limited (“JHCL”), which is a Limited Liability Company registered in British Virgin Island (“BVI”) on February 25, 2013. JHCL owns 100% of the equity in Runteng Medical Group Co., Ltd (“Runteng”), a limited liability company registered in Hong Kong on September 17, 2012. Runteng owns 70% of the equity in Harbin Jiarun Hospital Co., Ltd (“Jiarun”), a for-profit hospital incorporated in Harbin City of Heilongjiang, China in February 2006. The remaining 30% of the equity in Jiarun is owned by Junsheng Zhang, who is the Chairman of the Board of JRSIS Health Care Corporation.

Jiarun is a private hospital serving patients on a municipal and county level and providing both Western and Chinese medical practices to the residents of Harbin. Jiarun also owns 100% of the equity in:

● Harbin Jiarun Hospital Co., Ltd Nanjing Road Branch (“NRB Hospital”), a hospital branch of Jiarun, incorporated in Harbin city of Heilongjiang, China in October 2017. NRB hospital is a private hospital serving patients on a municipal and county level and providing both Western and Chinese medical practices to the residents of Harbin.

● Harbin Jiarun Hospital Co., Ltd 2^nd Branch (“2^nd Branch Hospital”), a second hospital branch of Jiarun, incorporated in Harbin city of Heilongjiang, China in November 2017. 2^nd Branch Hospital is a private hospital serving patients on a municipal and county level and providing both Western and Chinese medical practices to the residents of Harbin.

30% of the equity in Jiarun is held by Junsheng Zhang, and is therefore a non-controlling interest (“NCI”), accounted for pursuant to ASC 810-10-45, which states that the ownership interest in the subsidiary that is held by owners other than the parent is a non-controlling interest. According to the supplemental agreement signed between Junsheng Zhang and Runteng on June 1, 2013, the comprehensive income from Jiarun would be attributable to retained earnings and non-controlling interest for 70% and 30% respectively, from July 1, 2013.

NOTE 2. SUMMARIES OF SIGNIFICANT ACCOUNTING POLICIES

A. Basis of presentation

The consolidated financial statements have been prepared in accordance with the United States generally accepted accounting principles (“U.S. GAAP”).

B. Principles of consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company transactions and balances have been eliminated in consolidation. Non-controlling interests represent the equity interest in Jiarun that is not attributable to the Company. Non-controlling interest is reported in the consolidated financial position within equity, separate from the Company’s equity. Net income or loss and comprehensive income or loss are attributed to the Company’s and the non-controlling interest.

C. Use of estimates

The preparation of audited consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ from those estimates. Significant items subject to such estimates and assumptions include valuation allowances for receivables and recoverability of carrying amount and the estimated useful lives of long-lived assets. These estimates are often based on complex judgments and assumptions that management believes to be reasonable but are inherently uncertain and unpredictable. Actual results could differ from these estimates.

F-6

JRSIS HEALTH CARE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTS IN USD)

NOTE 2. SUMMARIES OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

D. Functional currency and foreign currency translation

JRSS and JHCL’s functional currency is the United States dollar (“US$”). Runteng’s functional currency is the Hong Kong dollar (“HK$”). The functional currency of Jiarun is the Renminbi (“RMB”).

The Company’s reporting currency is US$. Assets and liabilities of Runteng and Jiarun are translated at the current exchange rate at the balance sheet dates, revenues and expenses are translated at the average exchange rates during the reporting periods, and equity accounts are translated at historical rates. Translation adjustments are reported in other comprehensive income.

The exchange rates used for foreign currency translation are as follows:

		For nine months ended  September 30,
		2020	2019
		(USD to RMB/ USD to HKD)	(USD to RMB/ USD to HKD)
Assets and liabilities	period end exchange rate	6.8033 / 7.7501	7.1383/ 7.8399
Revenue and expenses	period average	6.9957 / 7.7576	6.8633/ 7.8384

E. Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk are cash, accounts receivable and other receivables arising from its normal business activities. The Company places its cash in what it believes to be credit-worthy financial institutions. The majority of sales are either cash receipt in advance or cash receipt upon delivery. For nine months ended September 30, 2020 and 2019, no customer accounted for more than 10% of net revenue. As of September 30, 2020 and December 31, 2019, three and three customers accounted for more than 5% of net accounts receivable, respectively. For those credit sales, the Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectible accounts and, as a consequence, believes that its accounts receivable credit risk exposure beyond such allowance is limited.

F. Cash and cash equivalents

Cash and cash equivalents include all cash, deposits in banks and other liquid investments with initial maturities of three months or less.

G. Accounts receivable

Accounts receivable are recorded at net realizable value consisting of the carrying amount less an allowance for uncollectible accounts as needed. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on aging data, historical collection experience, customer specific facts and economic conditions. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. 

H. Inventories

Inventories, consisting principally of medicines, are stated at the lower of cost or market using the first-in, first-out method (“FIFO”). This policy requires the Company to make estimates regarding the market value of inventory, including an assessment of excess or obsolete inventory. The Company determines excess or obsolete inventory based on an estimate of the future demand and estimated selling prices for its products. 

F-7

JRSIS HEALTH CARE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTS IN USD)

NOTE 2. SUMMARIES OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

I. Construction in progress

Construction in progress represents the new hospital painting and decoration costs. All direct costs relating to the polishing and decoration are capitalized as construction in progress. No depreciation is provided in respect of construction in progress. 

J. Property and equipment

Property and equipment are stated at cost. Expenditures for maintenance and repairs are charged to operations when incurred, while additions and betterments are capitalized. Depreciation is recorded on a straight-line basis reflective of the useful lives of the assets. When assets are retired or disposed, the asset’s original cost and related accumulated depreciation are eliminated from accounts and any gain or loss is reflected in income.

The estimated useful lives for property and equipment categories are as follows:

Buildings and improvement	10-40 years
Medical equipment	5-15 years
Transportation instrument	5-10 years
Office equipment	5-10 years
Electronic equipment	5-10 years
Software	5-10 years

K. Leases

In February 2016, the FASB issued ASU 2016-02–Leases (Topic 842), which increases transparency and comparability among organizations by recognizing right-of-use (“ROU”) lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The ASU maintains a distinction between finance leases and operating leases, which is substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous lease guidance. Retaining this distinction allows the recognition, measurement and presentation of expenses and cash flows arising from a lease to remain similar to the previous accounting treatment. A lessee is permitted to make an accounting policy election by class of underlying asset to exclude from balance sheet recognition any lease assets and lease liabilities with a term of 12 months or less, and instead to recognize lease expense on a straight-line basis over the lease term. For both financing and operating leases, the ROU asset and lease liability is initially measured at the present value of the lease payments in the consolidated balance sheet. In July 2018, the FASB issued ASU 2018-11 which provides entities with the option to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, if necessary. As discussed in Note 8, we adopted ASU 2016-02–Leases (Topic 842) effective January 1, 2019 utilizing the transition option provided by ASU 2018-11.

L. Fair Value Measurement

The Company applies the provisions of ASC Subtopic 820-10, Fair Value Measurements, for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements. ASC 820 also establishes a framework for measuring fair value and expands disclosures about fair value measurements.

Fair value is defined as the price that would be received when selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining the fair value for the assets and liabilities required or permitted to be recorded, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs that may be used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; 

Level 2: Quoted prices in markets that are not active, or inputs that is observable, either directly or indirectly, for substantially the full term of the asset or liability; 

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

F-8

JRSIS HEALTH CARE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTS IN USD)

NOTE 2. SUMMARIES OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The following table sets forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis:

	Carrying Value at September 30,		Fair Value Measurement at September 30,  2020
	2020		Level 1		Level 2		Level 3
Convertible Note	$	-	$	-	$	-	$	-
Warrant liability	$	42,818	$	-	$	42,818	$	-

A summary of changes in Warrant liability for the nine months ended September 30, 2020 was as follows:

Balance at January 1, 2020	$	110,840
Change in fair value of warrant liability		181,136
Exercise in January, 2020		(249,158	)
Balance at September 30, 2020		42,818

The fair value of the outstanding warrants was calculated using the Binomial Option Pricing Model with the following assumptions at inception and on subsequent valuation date:

	September 30, 2020
Warrants	Auctus
Market price per share (USD/share)	$	0.56
Exercise price (USD/share)		0.60
Risk free rate		0.241	%
Dividend yield		-
Expected term/Contractual life (years)		1.83
Expected volatility		74.08	%

A summary of changes in Convertible Note for the nine months ended September 30, 2020 was as follows:

Balance at January 1, 2020	$	774,567
Change in fair value of convertible notes		(332,363	)
Paid in February, 2020		(202,204	)
Paid in April, 2020		(250,000	)
Balance at September 30, 2020		-

In May and July of 2019, the Company issued three convertible promissory notes, one each to Labrys Fund, LP, Auctus Fund, LLC and Harbor Gates Capital, LLC. On October 31, 2019, the Company repaid the convertible promissory note issued to Labrys Fund, LP, On February 11, 2020, the Company repaid the convertible promissory note issued to Harbor Gates Capital, LLC. On April 30, 2020, the Company fully satisfied the Promissory Note that it issued to Auctus Fund, LLC in July 2019. Therefore, the Labrys’, Harbor Gates’ and Auctus' Convertible Notes have no fair value as of each subsequent reporting date.

F-9

JRSIS HEALTH CARE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTS IN USD)

NOTE 2. SUMMARIES OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities are reflected in the accompanying consolidated financial statements at amounts that approximate fair value because of the short-term nature of these instruments. The fair value of the Company’s capital lease obligations also approximates carrying value as they bear interest at current market rates.

M. Segment and geographic information

The Company is operating in one segment in accordance with the accounting guidance FASB ASC topic 280, “Segment Reporting”. The Company’s revenues are from customers in People’s Republic of China (“PRC”). All assets of the company are located in PRC.

N. Revenue recognition

The Company recognizes revenue when the amount of revenue can be reliably measured, it is probable that economic benefits will flow to the entity, and specific criteria have been met for each of the Company’s activities as described below. See Note 11 for details.

Pharmaceutical sales

Revenue from the sale of pharmaceuticals is recognized when it is both earned and realized. The Company’s policy is to recognize the sale of pharmaceuticals when the title of the pharmaceuticals, ownership and risk of loss have transferred to the purchasers, and collection of the sales proceeds is reasonably assured, all of which generally occur when the patient receives the pharmaceuticals.

Given the nature of this revenue source of the Company’s business and the applicable rules guiding revenue recognition, the revenue recognition practices for the sale of pharmaceuticals do not contain estimates that materially affect results of operations nor does the Company have any policy for return of products.

Patient Services

In accordance with the medical licenses under which Jiarun operates, the scope of its approved medical patient service includes medical consulting, surgery, obstetrics and gynecology, pediatrics, anesthesia, clinic laboratory, medical imaging, and traditional Chinese medicine.

Patient service revenue is recognized when it is both earned and realized. The Company’s policy is to recognize patient service revenue when the medical service has been provided to the patient and collection of the revenue is reasonably assured.

The Company provides services to both patients covered by social insurance and patients who are not covered by social insurance. The Company charges the same rates for patient services regardless of the coverage by social insurance.

Patients who are not covered by social insurance are liable for the total cost of medical treatment.

● For out-patient medical services, revenue is recognized when the Company provides medical service to the patient. The Company collects payment before the patient leaves the hospital.

● For in-patient medical services, when a patient checks into the hospital, the Company estimates the approximate fee the patient will spend in the hospital based on patient’s symptoms. At that time, the Company collects the estimated fees from the patient and records the payment as deposits received.

During the in-patient services period, the Company recognizes revenue when the patient service is provided and deducts the cost of service from the deposit received. The Company records these transactions based on daily reports generated by the respective medical department. When medical services exceed patient deposits received the Company records revenue and accounts receivable when the patient services are provided.

When a patient checks out from the hospital, the Company calculates and determines the remaining deposit, if any, and refunds the unused portion of the deposit to the patients. In the case where the patient has a balance in accounts receivable, accounts receivable are required to be paid in full at checkout.

Patients covered by social insurance will receive a portion or full medical services reimbursed or paid by the social insurance agencies via prepaid cards or insurance claim settlement process.

F-10

JRSIS HEALTH CARE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTS IN USD)

NOTE 2. SUMMARIES OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Settlement process

The Company is a registered medical service vendor under the state social insurance system for various social insurance agencies. The insurance agencies include “Social Medical Insurance funded by PRC and Heilongjiang Province” and “Heilongjiang Province New Rural Cooperative Medical Care System”. The Company utilizes an online system maintained by the social insurance agencies for patients who are covered by social insurance agencies.

● The Company records patients’ information in the social insurance system at check in. The system determines the covered portion and amounts based on the information input to the system.

● At the time of check out, the Company collects payment for services the patients are liable for and records accounts receivable from the social insurance agencies for the portion of services covered by the social insurance. In the case that the patients have made payment during the in-patient services period, the Company refunds any amount in excess of the portion they are liable for.

● The Company is responsible for submitting supporting documents of patient services provided to the social insurance agencies for their review. The Company is also required to reconcile its records with the social insurance agencies once a month. Once the social insurance agencies approve the reconciliation, the insurance agencies will settle the accounts receivable balance in the next month following the approval.

O. Income taxes

The Company has adopted FASB ASC Topic 740, “Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

In July 2006, the FASB issued FIN 48(ASC 740-10), Accounting for Uncertainty in Income Taxes-An Interpretation of FASB Statement No. 109 (ASC 740), which requires income tax positions to meet a more-likely-than-not recognition threshold to be recognized in the financial statements. Under FIN 48 (ASC 740-10), tax positions that previously failed to meet the more-likely-than-not threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met.

The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations and court rulings. Therefore, the actual liability may be materially different from our estimates, which could result in the need to record additional tax liabilities or potentially reverse previously recorded tax liabilities or deferred tax asset valuation allowance.

As a result of the implementation of FIN 48 (ASC 740-10), the Company made a comprehensive review of its portfolio of tax positions in accordance with recognition standards established by FIN 48 (ASC 740-10). The Company recognized no material adjustments to liabilities or shareholder’s equity as a result of the implementation. The adoption of FIN 48 did not have a material impact on the Company’s unaudited consolidated financial statements.

Enterprise income tax is determined under the Provisional Regulations of PRC Concerning Income Tax on Enterprises promulgated by the PRC, income tax is payable by enterprises at a rate of 25% of their taxable income.

F-11

JRSIS HEALTH CARE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTS IN USD)

NOTE 2. SUMMARIES OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

P. Earnings per share

Basic earnings per common share is computed by using net income divided by the weighted average number of shares of common stock outstanding for the periods presented. Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding for the periods presented.

Q. Reclassification

The comparative figures have been reclassified to conform to current year presentation.

R. Recently adopted accounting pronouncements

The FASB has issued Accounting Standards Update (ASU) No. 2019-01, Leases (Topic 842): Codification Improvements. The new ASU aligns the guidance for fair value of the underlying asset by lessors that are not manufacturers or dealers in Topic 842 with that of existing guidance. As a result, the fair value of the underlying asset at lease commencement is its cost, reflecting any volume or trade discounts that may apply. However, if there has been a significant lapse of time between when the underlying asset is acquired and when the lease commences, the definition of fair value (in Topic 820, Fair Value Measurement) should be applied.

The ASU also requires lessors within the scope of Topic 942, Financial Services—Depository and Lending, to present all “principal payments received under leases” within investing activities.

Finally, the ASU exempts both lessees and lessors from having to provide certain interim disclosures in the fiscal year in which a company adopts the new leases standard.

We do not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows. 

NOTE 3. ACCOUNTS RECEIVABLE, NET

	September 30		December 31
	2020		2019
	(Unaudited)
Accounts receivable	$	5,723,965	$	7,308,224
Less: allowance for doubtful debts		2,790,343		2,724,389
	$	2,933,622	$	4,583,835

The Company experienced $ nil bad debts during three and nine months ended September 30, 2020 and 2019. The allowance for doubtful debts as of September 30, 2020 and December 31, 2019 was derived from two years old insurance claims in excess of reimbursable limits submitted by the Company to the Harbin Medical Insurance Management Centre.

NOTE 4. INVENTORIES

At September 30, 2020 and December 31, 2019, inventories consist of the following:

	September 30		December 31
	2020		2019
	(Unaudited)
Western pharmaceuticals	$	755,730	$	554,414
Chinese herbal medicine		32,153		37,621
Medical consumables		629,942		475,916
Other material		7,857		4,790
	$	1,425,682	$	1,072,741

F-12

JRSIS HEALTH CARE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTS IN USD)

NOTE 5. PREPAYMENT

At September 30, 2020 and December 31, 2019 prepayment consists of the following:

	September 30		December 31
	2020		2019
	(Unaudited)
Deposits on medical equipment	$	517,329	$	744,569
Heating fees		-		175,736
Others		266,768		381,046
	$	784,097	$	1,301,351

NOTE 6. PROPERTY AND EQUIPMENT

At September 30, 2020 and December 31, 2019, property and equipment, at cost, consist of:

	September 30,			December 31,
	2020			2019
	(Unaudited)
Transportation equipment	$	1,213,581		$	1,184,896
Medical equipment		22,541,264			17,291,984
Electrical equipment		2,197,208			1,842,552
Office equipment and others		1,102,580			964,669
Buildings		24,274,045			23,700,288
Software		189,522			185,043
Total fixed assets at cost		51,518,200			45,169,432
Accumulated depreciation		(9,050,875	)		(7,021,013	)
Total fixed assets before reclassification	$	42,467,325		$	38,148,419
Reclass to Right-of-use assets		(13,803,342	)		(15,309,797	)
Total fixed assets, net		28,663,983			22,838,622

The Company recorded depreciation expense of $649,726 and $551,810, $1,808,738 and $1,644,389 for the three and nine months ended September 30, 2020 and 2019, respectively.

NOTE 7. LONG TERM DEFERRED EXPENSES

On May 7, 2015, July 3, 2015 and October 16, 2015, Jiarun entered into three lease agreements to lease medical equipment from Hair Finance Leasing (China) Co., Ltd. (“Hair”), a third party, for a five-year period, in which Jiarun is required to pay a consulting fee to Hair for the services provided over the five years.

During the year ended December 31, 2018, the Company paid approximately $1.6 million for the decoration of its outpatient building and the two Branch Hospitals. The consulting and decoration fees paid but attributable to the current and subsequent accounting periods were accounted for as deferred expenses and long-term deferred expenses.

The current portion of the prepaid consulting and decoration fees were recorded as deferred expenses of $435,881 and $257,203 as of September 30, 2020 and December 31, 2019. The long-term deferred expenses were $2,519,141 and $2,978,936 as of September 30, 2020 and December 31, 2019.

The Company recorded consulting fee of $ 5,012 and $16,049 for the three months ended September 30, 2020 and 2019, and decoration fees of $106,715 and $49,303 for the three months ended September 30, 2020 and 2019, respectively. The Company recorded consulting fee of $32,869 and $55,169 for the nine months ended September 30, 2020 and 2019, and decoration fees of $316,705 and $169,477 for the nine months ended September 30, 2020 and 2019, respectively.

F-13

JRSIS HEALTH CARE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTS IN USD)

NOTE 8. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

On January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”) Topic 842, “Leases” (“new lease standard”). The new lease standard was adopted using the optional transition method approach that allows for the cumulative effect adjustment to be recorded without restating prior periods. The Company has elected the practical expedient package related to the identification, classification and accounting for initial direct costs whereby prior conclusions do not have to be reassessed for leases that commenced before the effective date. As the Company will not reassess such conclusions, the Company has not adopted the practical expedient to use hindsight to determine the likelihood of whether a lease will be extended or terminated or whether a purchase option will be exercised.

Finance lease 

On June 5, 2013, Jiarun entered into a lease agreement to lease its hospital building from Harbin Baiyi Real Estate Development Co., Ltd (“the Lessor”), which is owned by Junsheng Zhang, a related party. The Lease has a term of 30 years, requiring annual prepayments of a rent of RMB7,000,000. The first payment was made on September 1, 2014. At the end of the leasing period, a final payment will be made to settle the total leasing amount. Both parties agreed for Jiarun to pay RMB3,000,000 as deposit at the execution of the Leasing agreement, which will be deducted from the final rental settlement. In accordance to accounting principles and treatment, this payment was booked as deposit in our accounts. The Lessor shall return the premium for lease to Jiarun at expiration of the Contract or pledge the deposit as part of rents for the last period or periods in 2043. The implicit interest rate, which determined the rental fee after fair value was amortized, was calculated at 6.55%, which is the benchmark interest rate announced from The People’s Bank of China. After the completion of all payments, the ownership of the lease item will be transferred to Jiarun.

The leasing agreement for our hospital building contains the following provisions:

● Rental payments of RMB7,000,000 (equivalent to $1,004,593) per year, payable at the beginning of September.

● An option allowing the lessor to extend the lease for thirty years beyond the last renewal option exercised by the Company.

● A guarantee by the Company that the lessor will realize $nil from selling the asset at the expiration of the lease This lease is a capital lease because its term (30 years) exceeds 75% of the building’s estimated economic life. In addition, the present value ($15,185,032) of the minimum lease payments exceeds 90% of the fair value of the building ($15,721,295).

● Accumulated annual amounts resulting from applying an interest rate of 6.55% to the balance of the lease obligation at the beginning of each year. The lease obligation is increased by the amount of the prior year’s interest, the amount of the net rental payment at the beginning of each year; and this amount represents the guaranteed residual value at the end of the lease term.

On May 7, 2015, July 3, 2015, October 16, 2015, April 6, 2016, November 25, 2016, April 5 2017 and May 25, 2019 Jiarun entered into several lease agreements to lease medical equipment and an elevator from three lease finance companies, which are all unrelated third parties, for three to five-year periods, in which Jiarun is required to make monthly or quarterly payments toward the leases. The Company was also required to pay deposits up front, which deposits will later be offset against the last quarterly payment. The medical equipment and elevator will be transferred to Jiarun upon the completion of the agreement. 

On March 25, 2019 Jiarun entered into a sale and leaseback agreement for the sale-leaseback of properties from Haitong Hengxin International Leasing Company Limited, with a collective net value of $2,609,047. 

F-14

JRSIS HEALTH CARE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTS IN USD)

NOTE 8. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES (Continued)   

Operating lease 

In August 2017 JHCC leased office space under non-cancellable operating lease agreements. Under terms of the lease agreement, from August 2017, JHCC is committed to make lease payments of approximately $36,881 per year for 5 years. This office is used for outpatient services by 2nd Branch Hospital.

In December 2017 JHCC leased office space under non-cancellable operating lease agreements. Under terms of the lease agreement, from December 2017, JHCC is committed to make lease payments of approximately $68,128 per year for 5 years. This office is used by 1^st Branch Company.

The Company’s adoption of the new lease standard included new processes and controls regarding asset financing transactions, financial reporting and a system-related implementation required for the new lease standard. The impact of the adoption of the new lease standard included the recognition of right-of-use (“ROU”) assets and lease liabilities. The adoption of the new lease standard resulted in additional net lease assets and net lease liabilities of approximately $14.06 million and $14.14 million, respectively, as of September 30, 2020.

As of September 30, 2020, the Company has the following amounts recorded on the Company’s unaudited condensed consolidated balance sheet:

	September 30, 2020		December 31, 2019
	(Unaudited)
Assets
Operating lease assets	$	255,646	$	331,693
Finance lease assets		13,803,342		15,309,796
Total	$	14,058,988	$	15,641,489
Liabilities
Current
Operating lease liabilities		117,681		111,414
Finance lease liabilities		1,635,519		2,569,007
Long-term
Operating lease liabilities		137,965		220,279
Finance lease liabilities		12,253,566		13,075,654
Total	$	14,144,731	$	15,976,354

The future minimum lease payments for annual capital lease obligation as of September 30, 2020 are as follows:

Year	Amounts
2020	$	1,263,151
2021		2,155,864
2022		1,134,231
Thereafter		9,335,839
Total	$	13,889,085

The Company recorded finance interest lease fees of $275,126 and $231,063 for the three months ended September 30, 2020 and 2019, and recorded finance interest lease fees of $816,509 and $812,057 for the nine months ended September 30, 2020 and 2019, respectively.

F-15

JRSIS HEALTH CARE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTS IN USD)

NOTE 8. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES (Continued)   

Future annual minimum lease payments, for non-cancellable operating leases are as follows:

Year ending December 31	Amount $
2020		30,034
2021		124,992
2022		100,620
		255,646

The company has recorded operating lease expense of $27,900 and $24,112 for three months ended September 30, 2020 and 2019, and recorded operating lease expense of $81,764 and $80,864 for nine months ended September 30, 2020 and 2019 respectively

At September 30, 2020 right-of-use assets, consist of:

	September 30, 2020 (Unaudited)									December 31, 2019
	Operating lease			Finance lease			Total			Operating lease			Finance lease			Total
Lease assets	$	337,410		$	14,619,851		$	14,957,261		$	432,892		$	16,390,259		$	16,823,151
Accumulated amortization		(81,764	)		(816,509	)		(898,273	)		(101,199	)		(1,080,463	)		(1,181,662	)
Total right-of-use assets, net	$	255,646		$	13,803,342		$	14,058,988		$	331,693		$	15,309,796		$	15,641,489

The Company recorded finance lease amortization expense of $275,126 and $391,314 in depreciation and amortization for the three months ended September 30, 2020 and 2019, respectively, and recorded finance lease amortization expense of $816,509 and $929,538 in depreciation and amortization for the nine months ended September 30, 2020 and 2019, respectively. For the three and nine months ended September 30, 2020, the amount of depreciation and amortization was $649,726 and $1,808,738, also included general property and equipment depreciation of $374,600 and $992,229.

The Company recorded operating lease expense of $73,174 and $24,112 for the three months ended September 30, 2020 and 2019, and recorded operating lease expense of $159,782 and $80,864 for the nine months ended September 30, 2020 and 2019, including operating lease amortization expense of $27,900 and $24,573 for the three months ended September 30, 2020 and 2019, and $81,764 and $75,003 for the nine months ended September 30, 2020 and 2019, respectively. 

F-16

JRSIS HEALTH CARE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTS IN USD)

NOTE 9. DERIVATIVE FINANCIAL INSTRUMENTS

Derivative Financial Instruments

The Company has adopted the provisions of ASC subtopic 825-10, Financial Instruments (“ASC 825-10”). ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Debt derivatives – In May and July of 2019, the Company issued three convertible promissory notes to Labrys Fund, LP. Auctus Fund, LLC and Harbor Gates Capital, LLC The Notes were convertible into common stock, at holders’ option, at a discount to the market price of the Company’s common stock. The Company has identified the embedded derivatives relating to certain anti-dilutive (reset) provisions in the Notes. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date of debenture and record the change in fair value as of each subsequent reporting date.

During 2019 and the first nine months of 2020, the Company satisfied the Notes issued to Labrys Fund, LP, Harbor Gates Capital, LLC and Auctus Fund, LLC.

Warrant liabilities – The Company issued two common stock purchase warrants (the “warrants”) to purchase 28,200 shares and 21,000 shares of the registrant’s common stock to Labrys Fund, LP and Auctus Fund, LLC. These warrants contain certain reset provisions. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date (issuance date) and to fair value as of each subsequent reporting date.

In January 2020 the Company issued 38,322 shares of common stock to Labrys Fund, LP in full satisfaction of its warrant. At September 30, 2020, the Company marked to market the fair value of the Auctus Fund warrant liability and determined a fair value of $42,818. The Company recorded a loss from issuance expense and change in fair value of warrant liability of $(263,953) and $181,136 for three and nine months ended September 30, 2020. The fair value of the warrant liability was determined using Binomial Option Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 70.08%, (3) weighted average risk-free interest rate of 0.241%, (4) expected life of 1.83 years, and (5) the quoted market price of the Company’s common stock at each valuation date.

NOTE 10. NON-CONTROLLING INTERESTS

Jiarun is the Company’s majority-owned subsidiary which is consolidated in the Company’s financial statements with a non-controlling interest recognized. The Company holds a 70% equity interest in Jiarun as of September 30, 2020 and December 31, 2019.

As of September 30, 2020 and December 31, 2019, NCI on the consolidated balance sheet was $8,885,529 and $8,168,613, respectively, representing the 30% of Jiarun that is owned by Junsheng Zhang.

For the three months ended September 30, 2020, the comprehensive income attributable to shareholders’ equity and NCI is $1,414,844 and $565,116 respectively. For the nine months ended September 30, 2020, the comprehensive income attributable to shareholders’ equity and NCI is $1,574,442 and $716,916, respectively.

For the three months ended September 30, 2019, the comprehensive income attributable to shareholders’ equity and NCI is $(211,130) and $74,257 respectively. For the nine months ended September 30, 2019, the comprehensive income attributable to shareholders ‘equity and NCI is $1,085,897 and $808,118, respectively. 

F-17

JRSIS HEALTH CARE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTS IN USD)

NOTE 11. Revenue

The Company’s revenue consists of pharmaceuticals sales and patient care revenue.

	Three Months Ended September 30,
	2020		2019
	(Unaudited)		(Unaudited)
Pharmaceuticals:
Western pharmaceuticals	$	1,869,252	$	1,989,732
Chinese medicine		235,613		296,327
Herbal medicine		358,086		257,971
Total pharmaceuticals	$	2,462,951	$	2,544,030
Patient services:
Medical consulting	$	3,509,366	$	2,732,914
Medical treatment		3,496,691		2,215,895
Others		547,077		270,361
Total patient services	$	7,553,134	$	5,219,170
	$	10,016,085	$	7,763,200

	Nine Months Ended September 30,
	2020		2019
	(Unaudited)		(Unaudited)
Pharmaceuticals:
Western pharmaceuticals	$	4,682,550	$	6,229,016
Chinese medicine		558,715		989,317
Herbal medicine		812,883		728,587
Total pharmaceuticals	$	6,054,148	$	7,946,920
Patient services:
Medical consulting	$	7,607,046	$	7,197,523
Medical treatment		8,586,527		7,078,626
Others		772,734		683,904
Total patient services	$	16,966,307	$	14,960,053
	$	23,020,455	$	22,906,973

F-18

JRSIS HEALTH CARE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTS IN USD)

NOTE 12. INCOME TAX EXPENSE

The Company uses the asset-liability method of accounting for income taxes prescribed by ASC 740 Income Taxes. The Company and its subsidiaries each file their taxes individually.

United States

JRSS is subject to the United States of America tax at a tax rate of 21%. No provision for the US federal income taxes has been made as the Company had no US taxable income for the periods presented, and its earnings are planned to be reinvested indefinitely into the operations of the Company in the PRC.

BVI

JHCL was incorporated in the BVI and, under the current laws of the BVI, it is not subject to income tax.

Hong Kong

Runteng was incorporated in Hong Kong and is subject to Hong Kong profits tax. Runteng is subject to Hong Kong taxation on its activities conducted in Hong Kong and income arising in or derived from Hong Kong. The applicable statutory tax rate is 16.5%.

PRC

Corporate Income Tax (CIT) is determined under the Provisional Regulations of PRC Concerning Income Tax on Enterprises promulgated by the PRC. Income tax is payable by enterprises at a rate of 25% of their taxable income.

According to the PRC “Notice on Preferential Corporate Income Tax (CIT) Treatment for Eligible Equipment or Machinery (Cai Shui [2018] No. 54)”, a 100% immediate tax deduction for CIT purposes is allowed on the condition that the unit price of each item of equipment or machinery is individually less than RMB5 million. Depreciation for tax purposes is not required. Basis differences between tax and GAAP for depreciation of property and equipment exist because in 2020 the Company purchased Eligible Equipment for RMB 35.8 million, with $1.1 million deferred income tax, creating differences between the tax treatment mandated by the Chinese government and GAAP tax treatment.

F-19

JRSIS HEALTH CARE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTS IN USD)

NOTE 13. RELATED PARTY TRANSACTIONS

The following is the list of the related parties with which the Group has had transactions:

(a) Junsheng Zhang, the Chairman of the Company 

(b) Harbin Baiyi Real Estate Development Co., Ltd., owned by Junsheng Zhang 

(c) Harbin Jiarun Pharmacy Co., Ltd., owned by Junsheng Zhang 

(d) Heilongjiang Province Runjia Medical Equipment Company Limited, owned by Junsheng Zhang 

(e) Jiarun Super Market Co., Ltd., owned by Junsheng Zhang 

(f) Harbin Qi-run Pharmacy Limited, owned by Junsheng Zhang 

(g) Yanhua Xing and Weiguang Song, the former shareholders of JHCL 

Amount due from related parties

The amount due from related parties became $ Nil in 2020 and 2019.

Amount due to related parties

Amount due to related parties consisted of the following as of the periods indicated:

	September 30,		December 31,
Name of related parties	2020		2019
	(Unaudited)
Harbin Jiarun Pharmacy Co., Ltd	$	22,876	$	-
Heilongjiang Province Runjia Medical Equipment Co., Ltd		2,132		4,306
Harbin Baiyi Real Estate Development Co., Ltd,		-		1,043,131
Junsheng Zhang		413,238		747,103
	$	438,246	$	1,794,540

Amount due to Harbin Jiarun Pharmacy Co., Ltd., and Heilongjiang Province Runjia Medical Equipment Company Limited were mainly for the balance for purchase of pharmaceuticals and medical material from these companies.

Amount due to Baiyi mainly represented the debt for the inpatient and outpatient building extension decoration and beauty center decoration.

Amounts due to Junsheng Zhang represented the balance paid by Mr. Zhang for the daily operation of the Company.

Related parties’ transactions

Purchase of pharmaceuticals and medical material from related parties consisted of the following for the periods indicated:

	For nine months ended September 30,
Name of related parties	2020		2019
Harbin Jiarun Pharmacy Co., Ltd	$	22,876	$	69,583
Heilongjiang Province Runjia Medical Equipment Co., Ltd		2,278		7,201
	$	25,.154	$	76,784

Deposits for capital leases and capital lease obligations

On June 5, 2013, Jiarun entered into a Lease Agreement to lease a new hospital building from Harbin Baiyi Real Estate Development Co., Ltd, which is owned by Junsheng Zhang, a related party. As of September 30, 2020, the Company has balance of deposits for capital leases and capital lease obligations of $440,963 and $11,541,555, respectively. As of December 31, 2019, the Company has balance of deposits for capital leases and capital lease obligations of $447,021 and $13,148,213, respectively.

F-20

JRSIS HEALTH CARE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTS IN USD)

NOTE 14. BASIC AND DILUTED EARNINGS PER SHARE

Basic net income per share is computed using the weighted average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares comprise shares issuable upon the exercise of share-based awards, using the treasury stock method. The reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for income from continuing operations is shown as follows:  

	Nine Months Ended September 30,
	2020		2019
	(Unaudited)		(Unaudited)
Numerator:
Net income available to common stockholders	$	1,212,681	$	1,798,663
Denominator:
Basic weighted-average number of shares outstanding		18,021,848		16,380,863
Diluted weighted-average number of shares outstanding		18,059,240		16,398,532
Net income per share:
Basic EPS	$	0.0673	$	0.1098
Diluted EPS	$	0.0672	$	0.1097

NOTE 15. CONTINGENCIES AND COMMITMENT

Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. There was no probable or reasonably possible loss contingency as of September 30, 2020 and December 31, 2019.

Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.

F-21

JRSIS HEALTH CARE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTS IN USD)

NOTE 16. COMMON STOCK

During the first quarter of 2020, the Company issued 38,332 shares to Labrys Fund, LP in full satisfaction of a common stock purchase warrant that the Company had sold to Labrys Fund, LP during 2019, On February 27, 2020, Auctus Fund, LLC converted into 2,000 shares of the Company’s common stock with $2,400 in accrued interest and fees arising under the Promissory Note it had purchase from the Company in July 2019. On August 4, 2020, the Company issued 40,000 shares to StockVest for advertising, promotional and marketing services.

NOTE 17. GOING CONCERN

As reflected in the accompanying consolidated financial statements, the Company had a $5,575,971 negative retained earnings or accumulated deficit as of September 30, 2020; in addition, the Company’s total current liabilities exceeded its current assets by $2,950,924. These factors raised substantial doubt about its ability to continue as a going concern. In view of the matters described above, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to raise additional capital, obtain financing and succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

To continue as a going concern, the Company is actively pursuing additional funding and strategic partners to enable it to implement its business plan. In addition, the Company is also working to devote more efforts to improve its operation and generate more profits. Management believes that these actions will allow the Company to continue its operations through the next fiscal year.

NOTE 18. SUBSEQUENT EVENTS

The Management of the Company determined that there were no material reportable subsequent events required to be disclosed.

F-22

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Statement Regarding Forward Looking Statements

The discussion contained in this Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended. Any statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases like “anticipate,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “target,” “expects,” “management believes,” “we believe,” “we intend,” “we may,” “we will,” “we should,” “we seek,” “we plan,” the negative of those terms, and similar words or phrases.    We base these forward-looking statements on our expectations, assumptions, estimates and projections about our business and the industry in which we operate as of the date of this Form 10-Q. These forward-looking statements are subject to a number of risks and uncertainties that cannot be predicted, quantified or controlled and that could cause actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. The “Risk Factors” section in our Annual Report on Form 10-K describes factors, among others, that could contribute to or cause these differences. Actual results may vary materially from those anticipated, estimated, projected or expected should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect. Because the factors discussed in the Risk Factors section of our Form 10-K could cause actual results or outcomes to differ materially from those expressed in any forward-looking statement made by us or on our behalf, you should not place undue reliance on any such forward-looking statement. New factors emerge from time to time, and it is not possible for us to predict which will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement. Except as required by law, we undertake no obligation to publicly revise our forward-looking statements to reflect events or circumstances that arise after the date of this Form 10-Q.

The following discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of such financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we evaluate these estimates, including those related to useful lives of real estate assets, bad debts, impairment, contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. There can be no assurance that actual results will not differ from those estimates. The analysis set forth below is provided pursuant to applicable SEC regulations and is not intended to serve as a basis for projections of future events.

2

Overview

Harbin Jiarun Hospital Company Limited (“Jiarun”) was established in Harbin in the Province of Heilongjiang of the People’s Republic of China (“PRC”) by the owner Junsheng Zhang on February 17, 2006.

Harbin Jiarun Hospital Co., Ltd Nanjing Road Branch (“NRB Hospital”) was established in Harbin in the Province of Heilongjiang of the People’s Republic of China (“PRC”) by Jiarun on October 30, 2017.

Harbin Jiarun Hospital Co., Ltd 2nd Branch (“2nd Branch Hospital”) was established in Harbin in the Province of Heilongjiang of the People’s Republic of China (“PRC”) by Jiarun on November 2, 2017.

Jiarun is a private hospital serving patients on a municipal and county level and providing both Western and Chinese medical practices to the residents of Harbin. Jiarun specializes in the areas of Pediatrics, Dermatology, ENT, Traditional Chinese Pharmaceuticals (TCM), Ophthalmology, Internal Pharmaceuticals Dentistry, General Surgery, Rehabilitation Science, Gynecology and General Medical Services.

On November 20, 2013, Junsheng Zhang, the senior officer of Jiarun Hospital, established JRSIS Health Care Corporation, a Florida corporation (“JHCC” or the “Company”). On February 25, 2013, the officer of Jiarun Hospital established JRSIS Health Care Limited (“JHCL”), a wholly owned subsidiary of the Company, and on September 17, 2012, the officer of Jiarun Hospital established Runteng Medical Group Co., Ltd (“Runteng”), a wholly owned subsidiary of JHCL. Runteng, a Hong Kong registered Investment Company, holds a 70% ownership interest in Harbin Jiarun Hospital Company Ltd, a Heilongjiang registered company.

On December 20, 2013, the Company acquired 100% of the issued and outstanding capital stock of JRSIS Health Care Limited, a privately held Limited Liability Company registered in the British Virgin Islands, for 12,000,000 shares of our common stock. JHCL, through its wholly owned subsidiary, Runteng Medical Group Co., Ltd, holds majority ownership in Jiarun, a company duly incorporated, organized and validly existing under the laws of China. As the parent company, JHCC relies on Jiarun to conduct 100% of our businesses and operations.

We have two sources of patient revenues: in-patient service revenues and out-patient service revenues. In addition to providing services to our patients, we also sell pharmaceuticals to our patients. Revenues from such sales are included in either our in-patient service revenues or our out-patient service revenues. Our revenues come from individuals as well as third-party payers, including PRC government programs and insurance providers, under which the hospital is paid based upon local government established charges. Revenue from the sale of pharmaceuticals is recognized when it is both earned and realized. The Company’s policy is to recognize the sale of pharmaceuticals when the title to the pharmaceuticals, ownership and risk of loss have transferred to the purchasers, and collection of the sales proceeds is reasonably assured, all of which generally occurs when the patient receives the pharmaceuticals. Patient service revenue is recognized when it is both earned and realized. The Company’s policy is to recognize patient service revenue when the medical service has been provided to the patient and collection of the revenue is reasonably assured. 

3

Critical Accounting Policies and Management Estimates

In preparing our financial statements we are required to formulate accounting policies regarding valuation of our assets and liabilities and to develop estimates of those values. In our preparation of the financial statements for the period ended September 30, 2020, there were two estimates made which were (a) subject to a high degree of uncertainty and (b) material to our results, as follows:

● The determination, as set forth in Note 3 to our Financial Statements, that the $5,723,965 balance in accounts receivable as of September 30, 2020 warranted an allowance for doubtful accounts of $2,790,343. The determination was based on our review of the statement from Harbin Medical Insurance Management Center. Generally, the Center sets an insurance claim limit for the hospital. Although the hospital cannot refuse to receive patients, if the hospital receives too many patients and exceeds the claim limit, there is an excess insurance claim that may not be recoverable. During the next year or two, the Center will pay part of the excess insurance claim to the hospital from an insurance regulatory fund that is shared with all local hospitals that have excess insurance claims. In accordance with the principle of prudence, the Company made a determination that an excess insurance claim that had been outstanding for over two years without reimbursement should be treated as a doubtful account.

● The determination to record depreciation of our principal medical property and equipment over an average useful life of approximately twenty years. (A quantification of that depreciation is set forth in Note 6 to our Financial Statements) The determination was based primarily on our expectation that the useful life of our hospital facilities would exceed thirty years, based on the experience of comparable facilities in our location.

Results of Operations

The following table shows key components of the results of operations during three months ended September 30, 2020 and 2019: 

	Three Months Ended  September 30,						Change
	2020			2019			$			%
Revenue:
Pharmaceuticals	$	2,462,951		$	2,544,030		$	(81,079	)		(3	)%
Patient services		7,553,134			5,219,170			2,333,964			45	%
Total revenue		10,016,085			7,763,200			2,252,885			29	%
Operating costs and expenses:
Cost of pharmaceuticals sold		1,798,004			1,670,367			127,637			8	%
Medical consumables		2,852,588			1,382,547			1,470,041			106	%
Salaries and benefits		2,067,965			1,740,684			327,281			19	%
Office supplies		488,478			509,647			(21,169	)		(4	)%
Vehicle expenses		39,381			69,710			(30,329	)		(44	)%
Utilities expenses		87,344			90,982			(3,638	)		(4	)%
Rentals and leases		73,174			24,112			49,062			203	%
Advertising and promotion expenses		9,118			13,194			(4,076	)		(31	)%
Interest expense, net		317,704			276,679			41,025			15	%
Convertible notes expense		-			152,904			(152,904	)		(100	)%
Warrant expense		(263,953	)		96,800			(360,753	)		(373	)%
Professional fee		20,791			114,130			(93,339	)		(82	)%
Depreciation		649,726			551,810			97,916			18	%
Total operating costs and expenses		8,140,320			6,693,566			1,446,754			22	%
Earnings from operations before other income and income taxes		1,875,765			1,069,634			806,131			75	%
Other income		(5,620	)		(3,294	)		(2,326	)		71	%
Earnings from operations before income taxes		1,870,145			1,066,340			803,805			75	%
Income tax		837,659			221,641			616,018			278	%
Net income		1,032,486			844,699			187,787			22	%
Less: net income attributable to non-controlling interests		266,545			369,366			(102,821	)		(28	)%
Net income attributable to the Company	$	765,941		$	475,333		$	290,608			61	%
Comprehensive income:
Foreign currency translation adjustment attributable to non-controlling interests		298,571			(295,109	)		593,680			(201	)%
Foreign currency translation adjustment attributable to the Company		648,903			(686,463	)		1,335,366			(195	)%
Comprehensive income	$	1,979,960		$	(136,873	)	$	2,116,833			(1547	)%

4

The following table shows key components of the results of operations during nine months ended September 30, 2020 and 2019: 

	Nine Months Ended  September 30,						Change
	2020			2019			$			%
Revenue:
Pharmaceuticals	$	6,054,148		$	7,946,920		$	(1,892,772	)		(24	)%
Patient services		16,966,307			14,960,053			2,006,254			13	%
Total revenue		23,020,455			22,906,973			113,482			(0.5	)%
Operating costs and expenses:
Cost of pharmaceuticals sold		4,328,675			6,040,467			(1,711,792	)		(28	)%
Medical consumables		5,589,590			3,251,086			2,338,504			72	%
Salaries and benefits		5,936,083			4,847,107			1,088,976			22	%
Office supplies		1,048,658			1,189,712			(141,054	)		(12	)%
Vehicle expenses		167,199			227,787			(60,588	)		(27	)%
Utilities expenses		392,827			388,632			4,195			1	%
Rentals and leases		159,782			80,864			78,918			98	%
Advertising and promotion expenses		9,256			39,659			(30,403	)		(77	)%
Interest expense, net		774,471			814,032			(39,561	)		(5	)%
Convertible notes expense		(322,363	)		428,093			(750,456	)		(175	)%
Warrant expense		181,136			173,445			7,691			4	%
Professional fee		40,385			219,045			(178,660	)		(82	)%
Depreciation		1,808,738			1,644,389			164,349			10	%
Total operating costs and expenses		20,114,437			19,344,318			770,119			4	%
Earnings from operations before other income and income taxes		2,906,018			3,562,655			(656,637	)		(18	)%
Other income (expenses)		(17,026	)		(12,662	)		(4,364	)		34	%
Earnings from operations before income taxes		2,888,992			3,549,993			(661,001	)		(19	)%
Income tax		1,138,507			637,475			(501,032	)		(79	)%
Net income		1,750,485			2,912,518			(1,162,033	)		(40	)%
Less: net income attributable to non-controlling interests		537,804			1,113,855			(576,051	)		(52	)%
Net income attributable to the Company	$	1,212,681		$	1,798,663		$	(585,982	)		(33	)%
Comprehensive income:
Foreign currency translation adjustment attributable to non-controlling interests		179,112			(305,737	)		484,849			(159	)%
Foreign currency translation adjustment attributable to the Company		361,761			(712,766	)		1,074,527			(151	)%
Comprehensive income	$	2,291,358		$	1,894,015		$	397,343			21	%

Revenue

Operating revenue for the three and nine months ended September 30, 2020, which resulted primarily from pharmaceuticals revenue and patient services revenue, was $10,016,085 and $23,020,455, an increase of 29% and 0.5% as compared with the operating revenue of $7,763,200 and $22,906,973 for the three and nine months ended September 30, 2019. Revenue from the sale of pharmaceuticals decreased by 24%, while revenue from provision of patient services increased by 13% for the nine months ended September 30, 2020. The decrease was primarily a result of restrictions imposed by government agencies on business operations within Harbin City in order to control the spread of COVID-19. These restrictions limited our ability to perform non-emergency medical services, which caused the number of treated inpatients during the first nine months of 2020 to fall by 35% to 9,874 patients, compared with the 15,292 patients treated at Jiarun Hospital in the first nine months of 2019. The restrictions were significantly reduced during the three months ended September 30, 2020, with the result that revenue from patient services increased by 44% in that quarter, compared to the third quarter of 2019

5

Operating Costs and Expenses

Total operating costs and expenses were $8,140,320 and $20,114,437 for the three and nine months ended September 30, 2020, an increase of $1,446,754 or 22% as compared to $6,693,566 for the third quarter of 2019, and an increase of $770,119 or 4% as compared to $19,344,318 for the first nine months of 2019. The 22% increase in operating expenses for the three months ended September 30, 2020 lagged the 29% increase in revenue in that quarter, with the result that pre-tax operating income increased by 75% for the quarter. However, since revenue increased by only 0.5% nine months - to- nine months, the increase of only 4% in operating costs and expenses caused a substantial reduction in the profitability of the Company’s operations for the first nine months of 2020. The primary reasons for the disparity between the increase in revenues and the reduction in operating costs were:

● the 72% increase in the expense for medical consumables during the nine months ended September 30, 2020. The cost of medical consumables increased, despite the 35% reduction in patients, because the hospital used more medical materials to prevent the spread of COVID-19.

● an increase in salaries and benefits of $1,088,976 in the nine months ended September 30, 2020. This 22% increase in our labor costs was primarily caused by the initiation of operations at our two new branch hospitals. The increase exceeded the revenue increase attributable to the hospitals, as we incurred labor costs in preparation for full scale operations.

Income Taxes

Corporate Income Tax (CIT) is determined under the Provisional Regulations of PRC Concerning Income Tax on Enterprises promulgated by the PRC. Income tax is payable by enterprises at a rate of 25% of their taxable income.

According to the PRC “Notice on Preferential Corporate Income Tax (CIT) Treatment for Eligible Equipment or Machinery (Cai Shui [2018] No. 54)”, a 100% immediate tax deduction for CIT purposes is allowed on the condition that the unit price of each item of equipment or machinery is individually less than RMB5 million. Depreciation for tax purposes is not required. Basis differences between tax and GAAP for depreciation of property and equipment exist because in 2020 the Company purchased Eligible Equipment for RMB 35.8 million, with $1.1 million deferred income tax, creating differences between tax and GAAP.

Income from operations and net income

Income from Operations was $2,906,018 for the nine months ended September 30, 2020, as compared with operating income of $3,562,655 for the nine months ended September 30, 2019. After deducting other income and expenses as well as the provision for income tax, the Company’s net income for the nine months ended September 30, 2020 was $1,750,485 representing a decrease of $1,162,033 or 40%, over $2,912,518 for the nine months ended September 30, 2019. On the other hand, we realized a $806,131 increase (75%) in income from operations comparing the three months ended September 30, 2020 to the three months ended September 30, 2019, with a 22% increase in net income. In both cases, the changes in income from operations and net income were primarily due to the aforementioned changes in operating revenue and expenses.

Our net income was produced by Jiarun. Because we own only 70% of the equity interest in Jiarun (the other 30% being owned by our Chairman, Junsheng Zhang), we reduced our net income by an allocation to the “non-controlling interests” of, before recognizing net income attributable to the Company: $537,804 and $1,113,855 for the nine months ended September 30, 2020 and 2019, respectively, and $266,545 and $369,366 for the three month periods then ended. After those allocations, our net income attributable to the Company for the nine months ended September 30, 2020 and 2019 was $1,212,681 ($0.0673 per share) and $1,798,663 ($0.1098 per share), respectively. Net income attributable to the Company for the three months ended September 30, 2020 and 2019 was $764,941 and $475,333, respectively.

Foreign Currency Translation Adjustment.

Our reporting currency is the U.S. dollar. Our local currency, Renminbi (RMB), is our functional currency. Results of operations and cash flows are translated at average exchange rates during the period, and assets and liabilities are translated at the unified exchange rate as quoted by the People’s Bank of China at the end of the period. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statement of stockholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. For the nine months ended September 30, 2020, foreign currency translation adjustments of $540,873 (of which $179,112 was attributable to the non-controlling interest) have been reported as other comprehensive income in the consolidated statements of operations and comprehensive income. For the nine months ended September 30, 2019, foreign currency translation adjustments of ($1,018,503) (of which ($305,737) was attributable to the non-controlling interest) have been reported as other comprehensive loss in the consolidated statements of operations and comprehensive income.

6

Liquidity and Capital Resources

As of September 30, 2020, the Company had $812,102 in cash and cash equivalents, a decrease of $1,159,027 from our cash balance at December 31, 2019. The decrease was primarily caused by our investing activities, which used $6,390,591 of cash during the first nine months of 2020.

Our working capital deficit at September 30, 2020 was $2,950,924, an deterioration of $1,549,375 from our deficit of $1,401,549 in working capital at December 31, 2019. The decrease was primarily attributable to the fact that we reduced our current assets by $3,069,855, while increasing our fixed assets, in particular increasing our property and equipment balance by $5,825,361.  

Our working capital deficit limits our ability to finance expansion. It is noteworthy, however, that our current liabilities include $438,246 in amounts due to related parties, all of which is owed to our Chairman, Junsheng Zhang, and $1,753,200 representing the current portion of our lease obligations, most of which is also owed to Chairman Zhang. We believe, therefore, that our liquidity is adequate to continue operations at our current level and fund a modest expansion program.

Although our current resources and cash flows are adequate to pay our current ongoing obligations, we anticipate that our future liquidity requirements will arise from the need to fund our growth and future capital expenditures. The primary sources of funding for such growth requirements are expected to be additional funds raised from the sale of equity and/or debt financing. However, we can provide no assurances that we will be able to obtain additional financing on terms satisfactory to us. 

Cash Flows and Capital Resources 

Our cash flows for the first half of 2020 and 2019 are summarized below:  

	Nine Months Ended September 30,
	2020			2019
Net cash provided by operating activities		7,507,822			8,837,226
Net cash used in investing activities		(6,390,591	)		(3,460,652	)
Net cash used in financing activities		(2,304,079	)		(3,574,870	)
Effect of exchange rate fluctuation on cash and cash equivalents		27,821			(48,969	)
Net increase in cash and cash equivalents		(1,159,027	)		1,752,735
Cash and cash equivalents, beginning of period		1,971,129			256,450
Cash and cash equivalents, ending of period	$	812,102		$	2,009,185

Net Cash Provided by Operating Activities

For the nine months ended September 30, 2020, we had positive cash flow from operating activities of $7,507,822, a decrease of $1,329,404 from $8,837,226 for the nine months ended September 30, 2019. Cash flow from operations decreased in part because of the $1,162,033 decrease in net income during the nine months ended September 30, 2020. In addition, several other factors contributed to the reduction in cash flow from operations, including:

● The Company increased its inventory balance by $317,979 during the first nine months of 2020, whereas the inventory balance increased by only $97,062 during the first nine months of 2019.

● The Company reduced its accrued expenses balance by $247,668 during the first nine months of 2020; during the first nine months of 2019 accrued expenses balance reduced by $596,572.

● The Company used $322,363 to satisfy convertible notes payable during the first nine months of 2020; during the first nine months of 2019, the Company received $724,500 on sale of those same convertible notes.

● The Company reduced its debt to related parties by $1,359,833 during the first nine months of 2020; during the first nine months of 2019, the Company increased the amount due to related parties by $2.716.217.

7

Cash flow from operating activities during the first nine months of 2020 substantially exceeded net income, primarily because of an increase in the Company’s accounts payable balance by $2,238,219 and an increase in the accounts receivable balance by $1,712,746. These items do not necessarily represent patterns that will be repeated: the Company's ability to defer satisfaction of its payables without injuring its relations with vendors is limited; the surge in third quarter revenue leading to increased accounts receivable reflects in part delivery of medical procedures that were delayed by the pandemic. It is the case, therefore, that the Company’s ability to generate cash from operating activities during the first nine months of 2020 despite the reduction in its profitability may not be replicable in the future operation.

Net Cash Used in Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2020 was $6,390,591, compared to net cash used in investing activities of $3,460,652 for the nine months ended June 30, 2019. The cash used in investing activities for the nine months ended September 30, 2020 and the nine months ended September 30, 2019 was mainly used for the purchase of medical equipment and payment of Construction in progress.

Net Cash Provided by Financing Activities

Net cash used in financing activities for the nine months ended September 30, 2020 was $2,304,079, as compared to net cash used in financing activities of $3,574,870 for the nine months ended September 30, 2019. The cash used in financing activities for the nine months ended September 30, 2020 was mainly due to payment on account of finance leases of $3,418,708.

Trends, Events and Uncertainties

The China Ministry of Health, as well as other related agencies, may change the monetary amounts we can charge for medical services, drugs and medications. We cannot predict the impact of these proposed changes since the changes are not fully defined and we do not know whether such changes will ever be implemented or when they may take effect.

We plan to acquire other hospitals and companies involved in the healthcare industry in the PRC using cash and shares of our common stock. Substantial capital may be needed for these acquisitions and we may need to raise additional funds through the sale of our common stock, debt financing or other arrangements. We do not have any commitments or arrangements from any person to provide us with any additional capital. Additional capital may not be available to us, or if available, on acceptable terms, in which case we would not be able to acquire other hospitals or businesses in the healthcare industry.

Other than the factors listed above we do not know of any trends, events or uncertainties that have had or are reasonably expected to have a material impact on our net sales or revenues or income from continuing operations. Our business is not seasonal in nature.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet items reasonably likely to have a material effect on our financial condition.

Recent Accounting Pronouncements

Recent accounting pronouncements issued by the FASB, the AICPA and the SEC did not, or are not believed by management to, have a material effect on the Company’s present or future consolidated financial statements.

8

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company”, we are not required to provide the information required by this Item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluations of Disclosure Controls and Procedures

Under the supervision and with the participation of our management team, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of September 30, 2020. Based on this evaluation, Management determined that the following material weakness existed in our internal control over financial reporting

● Inadequate and ineffective controls over accounting for income taxes. We did not have adequate design or operation of controls that provide reasonable assurance that the accounting for income taxes, including the related financial statement disclosures, were in accordance with U.S. GAAP. Specifically, we did not have sufficient technical expertise in the income tax function to provide adequate review and control with respect to the (a) identification and ongoing evaluation of uncertain tax positions in foreign tax jurisdictions; (b) complete and accurate recording of deferred tax assets and liabilities due to differences in accounting treatment for book and tax purposes; and (c) complete and accurate recording of inputs to the consolidated income tax provision and related accruals.

The aforesaid weakness in our internal controls was identified in connection with the preparation of our financial statements for the year ended December 31, 2019. At that time, management adopted a remediation plan. The interference in our business operations caused by restrictions on business activities related to the COVID-19 pandemic has delayed and impaired our ability to implement the remediation plan.

Changes in Internal Control over Financial Reporting

During the period covered by this report, there has been no change in our internal control over financial reporting that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.

9

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

The Company has no knowledge of existing or pending legal proceedings against the Company, nor is the Company involved as a plaintiff in any proceeding or pending litigation. There are no proceedings in which any of the Company’s directors, officers or any of their respective affiliates, or any beneficial stockholder, is an adverse party or has a material interest adverse to our interest.

ITEM 1A. RISK FACTORS

There have been no material changes from the risk factors included in the Annual Report on Form 10-K for the year ended December 31, 2019 filed on June 16, 2020.

ITEM 2. UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) Unregistered sales of equity securities  

In August 2020 the Company issued 40,000 shares of its common stock to StockVest as compensation for services. The sale was exempt from registration pursuant to Section 4(a)(2) of the Securities Act because the sale was made to a sophisticated investor, not in a public offering, and the investor was taking the shares for investment only.

Other than the aforesaid, the Company did not effect any sales of unregistered securities during the third quarter of fiscal 2020.

(b) Purchases of equity securities

The Company did not repurchase any of its equity securities that were registered under Section 12 of the Securities Exchange Act during the third quarter of fiscal 2020.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable

ITEM 5. OTHER INFORMATION

None,

10

ITEM 6. EXHIBITS

INDEX TO EXHIBITS

Exhibit	Description
31.1	Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

11

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

JRSIS HEALTH CARE CORPORATION. (Registrant)

Signature	Title	Date
/s/ Lihua Sun	Chief Executive Officer	November 13, 2020
Lihua Sun	(Principal Executive Officer)
/s/ Xuewei Zhang	Chief Financial Officer	November 13, 2020
Xuewei Zhang	(Principal Financial and Accounting Officer)

12

EX-31.1

EXHIBIT 31.1

Certification of Principal Executive Officer

Section 302 Certification

I, Lihua Sun, certify that:

1. I have reviewed this quarterly report on Form 10-Q for JRSIS HEALTH CARE CORPORATION.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and the internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 13, 2020	/s/ Lihua Sun
		Lihua Sun, Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

Certification of Principal Financial Officer 

Section 302 Certification

I, Xuewei Zhang, certify that:

1. I have reviewed this quarterly report on Form 10-Q of JRSIS HEALTH CARE CORPORATION;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and the internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 13, 2020	/s/ Xuewei Zhang
		Xuewei Zhang, Chief Financial Officer
		(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATIONS PURSUANT TO 

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of JRSIS HEALTH CARE CORPORATION. (the “Company”) on Form 10-Q for the quarter ended September 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lihua Sun, as Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

By:	/s/ Lihua Sun	Dated: November 13, 2020
	Lihua Sun
Title:	Chief Executive Officer
	(Principal Executive Officer)

This certification is being furnished to the SEC as an exhibit to the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the of the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed copy of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided by the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATIONS PURSUANT TO 

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of JRSIS HEALTH CARE CORPORATION. (the “Company”) on Form 10-Q for the quarter ended September 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Xuewei Zhang, as Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

By:	/s/ Xuewei Zhang	Dated: November 13, 2020
	Xuewei Zhang
Title:	Chief Financial Officer
	(Principal Financial Officer)

This certification is being furnished to the SEC as an exhibit to the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the of the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed copy of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided by the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2020	Nov. 13, 2020
Document and Entity Information [Abstract]
Entity Registrant Name	JRSIS HEALTH CARE Corp
Entity Central Index Key	0001597892
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Sep. 30, 2020
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2020
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		18,056,331
Entity File Number	000-56013
Entity Interactive Data Current	Yes
Entity Incorporation State Country Code	FL

XML

Consolidated Balance Sheets - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Current Assets:
Cash and cash equivalents	$ 812,102	$ 1,971,129
Accounts receivable, net	2,933,622	4,583,835
Inventories	1,425,682	1,072,741
Other receivables	52,827	47,385
Prepayments	784,097	1,301,351
Deferred expenses	435,881	257,203
Deposits for capital leases-current portion		280,422
Total current assets	6,444,211	9,514,066
Construction in progress	658,473
Property and equipment, net	28,663,983	22,838,622
Long term deferred expenses	2,519,141	2,978,936
Deposits for capital leases	671,439	655,569
Right-of-use assets	14,058,988	15,641,489
Total assets	53,016,235	51,628,682
Current Liabilities:
Accounts payable	5,847,335	3,619,442
Notes payable	528,441	358,382
Deposits received	13,560	24,487
Amount due to related parties	438,246	1,794,540
Other payable	52,694	10,752
Deferred tax payable-current	271,421	245,943
Tax payable		12,047
Payroll payable	490,238	1,395,034
Lease obligation-current portion	1,753,200	2,680,421
Convertible note		774,567
Total current liabilities	9,395,135	10,915,615
Deferred tax payable	2,888,346	1,702,752
Warrant liabilities	42,818	110,840
Lease obligation	12,391,531	13,295,933
Other capital lease payable	2,680,038	2,616,691
Total liabilities	27,397,868	28,641,831
Shareholders' equity
Common stock: $0.001 par value, 100,000,000 shares authorized; 18,056,331 and 17,975,999 issued and outstanding at September 30, 2020 and December 31, 2019, respectively	18,056	17,976
Additional Paid-in capital	23,165,865	22,825,787
Retained earnings	(5,575,971)	(6,788,652)
Other comprehensive income	(875,112)	(1,236,873)
Total shareholders' equity of the Company	16,732,838	14,818,238
Non-controlling interest	8,885,529	8,168,613
Total shareholders' equity	25,618,367	22,986,851
Total liabilities and shareholders' equity	$ 53,016,235	$ 51,628,682

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares, issued	18,056,331	17,975,999
Common stock, shares outstanding	18,056,331	17,975,999

XML

Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenue:
Total revenue	$ 10,016,085	$ 7,763,200	$ 23,020,455	$ 22,906,973
Operating costs and expenses:
Cost of pharmaceuticals sold	1,798,004	1,670,367	4,328,675	6,040,467
Medical consumables	2,852,588	1,382,547	5,589,590	3,251,086
Salaries and benefits	2,067,965	1,740,684	5,936,083	4,847,107
Office supplies	488,478	509,647	1,048,658	1,189,712
Vehicle expenses	39,381	69,710	167,199	227,787
Utilities expenses	87,344	90,982	392,827	388,632
Rentals and leases	73,174	24,112	159,782	80,864
Advertising and promotion expenses	9,118	13,194	9,256	39,659
Interest expense	317,704	276,679	774,471	814,032
Professional fee	20,791	114,130	40,385	219,045
Loss of fair value of convertible notes		152,904	(322,363)	428,093
Warrant expense	(263,953)	96,800	181,136	173,445
Depreciation	649,726	551,810	1,808,738	1,644,389
Total operating costs and expenses	8,140,320	6,693,566	20,114,437	19,344,318
Earnings from operations before other income and income taxes	1,875,765	1,069,634	2,906,018	3,562,655
Other (expenses)	(5,620)	(3,294)	(17,026)	(12,662)
Earnings from operations before income taxes	1,870,145	1,066,340	2,888,992	3,549,993
Income tax	837,659	221,641	1,138,507	637,475
Net income	1,032,486	844,699	1,750,485	2,912,518
Less: net income attributable to non-controlling interests	266,545	369,366	537,804	1,113,855
Net income attributable to the Company	765,941	475,333	1,212,681	1,798,663
Comprehensive income:
Foreign currency translation adjustment attributable to non-controlling interests	298,571	(295,109)	179,112	(305,737)
Foreign currency translation adjustment attributable to the Company	648,903	(686,463)	361,761	(712,766)
Comprehensive income	1,979,960	(136,873)	2,291,358	1,894,015
Less: Comprehensive income attributable to non-controlling interests	565,116	74,257	716,916	808,118
Comprehensive income attributable to the Company	$ 1,414,844	$ (211,130)	$ 1,574,442	$ 1,085,897
Basic earnings per share	$ 0.0425	$ 0.0264	$ 0.0673	$ 0.1098
Diluted earnings per share	$ 0.0424	$ 0.0263	$ 0.0672	$ 0.1097
Weighted average number of shares outstanding (Basic)	18,042,109	18,013,200	18,021,848	16,380,863
Weighted average number of shares outstanding (Diluted)	18,063,109	18,055,867	18,059,240	16,398,532
Pharmaceuticals
Revenue:
Total revenue	$ 2,462,951	$ 2,544,030	$ 6,054,148	$ 7,946,920
Patient services
Revenue:
Total revenue	$ 7,553,134	$ 5,219,170	$ 16,966,307	$ 14,960,053

XML

Consolidated Statement of Shareholders' Equity - USD ($)	Common stock	Retained Earnings	Other comprehensive income	Additional paid-in capital	Non-Controlling Interest	Total
Balance in beginning at Dec. 31, 2018	$ 14,975	$ 12,913,912	$ (983,109)	$ 2,191,363	$ 7,895,376	$ 22,032,517
Balance in beginning, shares at Dec. 31, 2018	14,975,000
Net income		668,588			288,799	957,387
Foreign currency translation adjustment			354,157		170,771	524,928
Balance in end at Mar. 31, 2019	$ 14,975	13,582,500	(628,952)	2,191,363	8,354,946	23,514,832
Balance in end, shares at Mar. 31, 2019	14,975,000
Balance in beginning at Dec. 31, 2018	$ 14,975	12,913,912	(983,109)	2,191,363	7,895,376	22,032,517
Balance in beginning, shares at Dec. 31, 2018	14,975,000
Net income						2,912,518
Balance in end at Sep. 30, 2019	$ 18,016	1,798,663	(1,695,875)	15,449,034	8,703,494	24,273,332
Balance in end, shares at Sep. 30, 2019	18,015,999
Balance in beginning at Mar. 31, 2019	$ 14,975	13,582,500	(628,952)	2,191,363	8,354,946	23,514,832
Balance in beginning, shares at Mar. 31, 2019	14,975,000
Net income		654,742			455,690	1,110,432
Foreign currency translation adjustment			(380,460)		(181,399)	(561,859)
Stock dividend	$ 2,995	(12,913,912)		12,910,917
Stock dividend, shares	2,994,999
Shares issued	$ 40			299,960		300,000
Shares issued, shares	40,000
Balance in end at Jun. 30, 2019	$ 18,010	1,323,330	(1,009,412)	15,402,240	8,629,237	24,363,405
Balance in end, shares at Jun. 30, 2019	18,009,999
Net income		475,333			369,366	844,699
Foreign currency translation adjustment			(686,463)		(295,109)	(981,572)
Shares issued	$ 6			46,794		46,800
Shares issued, shares	6,000
Balance in end at Sep. 30, 2019	$ 18,016	1,798,663	(1,695,875)	15,449,034	8,703,494	24,273,332
Balance in end, shares at Sep. 30, 2019	18,015,999
Balance in beginning at Dec. 31, 2019	$ 17,976	(6,788,652)	(1,236,873)	22,825,787	8,168,613	22,986,851
Balance in beginning, shares at Dec. 31, 2019	17,975,999
Net income		155,523			159,394	314,917
Foreign currency translation adjustment			(343,827)		(144,115)	(487,942)
Shares issued	$ 40			260,118		260,158
Shares issued, shares	40,332
Balance in end at Mar. 31, 2020	$ 18,016	(6,633,129)	(1,580,700)	23,085,905	8,183,892	23,073,984
Balance in end, shares at Mar. 31, 2020	18,016,331
Balance in beginning at Dec. 31, 2019	$ 17,976	(6,788,652)	(1,236,873)	22,825,787	8,168,613	22,986,851
Balance in beginning, shares at Dec. 31, 2019	17,975,999
Net income						1,750,485
Balance in end at Sep. 30, 2020	$ 18,056	(5,575,971)	(875,112)	23,165,865	8,885,529	25,618,367
Balance in end, shares at Sep. 30, 2020	18,056,331
Balance in beginning at Mar. 31, 2020	$ 18,016	(6,633,129)	(1,580,700)	23,085,905	8,183,892	23,073,984
Balance in beginning, shares at Mar. 31, 2020	18,016,331
Net income		291,217			111,865	403,082
Foreign currency translation adjustment			56,685		24,656	81,341
Balance in end at Jun. 30, 2020	$ 18,016	(6,341,912)	(1,524,015)	23,085,905	8,320,413	23,558,407
Balance in end, shares at Jun. 30, 2020	18,016,331
Net income		765,941			266,545	1,032,486
Foreign currency translation adjustment			648,903		298,571	947,474
Shares issued	$ 40			79,960		80,000
Shares issued, shares	40,000
Balance in end at Sep. 30, 2020	$ 18,056	$ (5,575,971)	$ (875,112)	$ 23,165,865	$ 8,885,529	$ 25,618,367
Balance in end, shares at Sep. 30, 2020	18,056,331

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash Flows From Operating Activities
Net income	$ 1,750,485	$ 2,912,518
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	1,808,738	1,644,389
Interest expense	774,471
Prepaid commitment expense		300,000
Convertible notes expense	(322,363)	428,093
Warrant expense	181,136	173,445
Changes in operating assets and liabilities:
Accounts receivable, net	1,712,746	593,886
Inventories	(317,979)	(97,062)
Amount due from related parties	(20,016)	143,381
Prepayments and other current assets	825,753	66,226
Accounts payable	2,238,219	(633,301)
Amount due to related parties	(1,359,833)	2,716,217
Deposits received	(11,203)	(7,138)
Accrued expenses and other current liabilities	247,668	596,572
Net cash provided by operating activities	7,507,822	8,837,226
Cash Flows From Investing Activities
Purchases of property and equipment	(4,679,397)	(2,936,684)
Prepayment for property and equipment acquisition	(296,264)	637,708
Payment of construction in progress	(640,363)	(1,161,676)
Payment for Convertible notes	(774,567)
Net cash (used in) investing activities	(6,390,591)	(3,460,652)
Cash Flows From Financing Activities
Payments of finance lease obligations	(1,869,766)	(7,824,219)
Interest expense	(774,471)	814,032
Derivative financial instruments		724,500
Proceeds from finance lease		2,964,017
Non-cash issuance of common stock	340,158	(253,200)
Net cash (used in) financing activities	(2,304,079)	(3,574,870)
Effect of exchange rate fluctuation on cash and cash equivalents	27,821	(48,969)
Net (decrease) increase in cash and cash equivalents	(1,159,027)	1,752,735
Cash and cash equivalents, beginning of period	1,971,129	256,450
Cash and cash equivalents, ending of period	812,102	2,009,185
Supplemental disclosure of cash flow information
Cash paid for income taxes	(1,138,507)	(637,475)
Cash paid for interest	$ (774,471)	$ (814,032)

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Description of Business and Organization

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

DESCRIPTION OF BUSINESS AND ORGANIZATION

NOTE 1. DESCRIPTION OF BUSINESS AND ORGANIZATION

JRSIS Health Care Corporation (the "Company" or "JRSS") was incorporated on November 20, 2013 under the laws of the State of Florida. In December 2013 JRSS acquired 100% of the equity in JRSIS Health Care Limited ("JHCL"), which is a Limited Liability Company registered in British Virgin Island ("BVI") on February 25, 2013. JHCL owns 100% of the equity in Runteng Medical Group Co., Ltd ("Runteng"), a limited liability company registered in Hong Kong on September 17, 2012. Runteng owns 70% of the equity in Harbin Jiarun Hospital Co., Ltd ("Jiarun"), a for-profit hospital incorporated in Harbin City of Heilongjiang, China in February 2006. The remaining 30% of the equity in Jiarun is owned by Junsheng Zhang, who is the Chairman of the Board of JRSIS Health Care Corporation.

Jiarun is a private hospital serving patients on a municipal and county level and providing both Western and Chinese medical practices to the residents of Harbin. Jiarun also owns 100% of the equity in:

● Harbin Jiarun Hospital Co., Ltd Nanjing Road Branch ("NRB Hospital"), a hospital branch of Jiarun, incorporated in Harbin city of Heilongjiang, China in October 2017. NRB hospital is a private hospital serving patients on a municipal and county level and providing both Western and Chinese medical practices to the residents of Harbin.

● Harbin Jiarun Hospital Co., Ltd 2^nd Branch ("2^nd Branch Hospital"), a second hospital branch of Jiarun, incorporated in Harbin city of Heilongjiang, China in November 2017. 2^nd Branch Hospital is a private hospital serving patients on a municipal and county level and providing both Western and Chinese medical practices to the residents of Harbin.

30% of the equity in Jiarun is held by Junsheng Zhang, and is therefore a non-controlling interest ("NCI"), accounted for pursuant to ASC 810-10-45, which states that the ownership interest in the subsidiary that is held by owners other than the parent is a non-controlling interest. According to the supplemental agreement signed between Junsheng Zhang and Runteng on June 1, 2013, the comprehensive income from Jiarun would be attributable to retained earnings and non-controlling interest for 70% and 30% respectively, from July 1, 2013.

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Summaries of Significant Accounting Policies

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

SUMMARIES OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2. SUMMARIES OF SIGNIFICANT ACCOUNTING POLICIES

A. Basis of presentation

The consolidated financial statements have been prepared in accordance with the United States generally accepted accounting principles ("U.S. GAAP").

B. Principles of consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company transactions and balances have been eliminated in consolidation. Non-controlling interests represent the equity interest in Jiarun that is not attributable to the Company. Non-controlling interest is reported in the consolidated financial position within equity, separate from the Company's equity. Net income or loss and comprehensive income or loss are attributed to the Company's and the non-controlling interest.

C. Use of estimates

The preparation of audited consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ from those estimates. Significant items subject to such estimates and assumptions include valuation allowances for receivables and recoverability of carrying amount and the estimated useful lives of long-lived assets. These estimates are often based on complex judgments and assumptions that management believes to be reasonable but are inherently uncertain and unpredictable. Actual results could differ from these estimates.

D. Functional currency and foreign currency translation

JRSS and JHCL's functional currency is the United States dollar ("US$"). Runteng's functional currency is the Hong Kong dollar ("HK$"). The functional currency of Jiarun is the Renminbi ("RMB").

The Company's reporting currency is US$. Assets and liabilities of Runteng and Jiarun are translated at the current exchange rate at the balance sheet dates, revenues and expenses are translated at the average exchange rates during the reporting periods, and equity accounts are translated at historical rates. Translation adjustments are reported in other comprehensive income.

The exchange rates used for foreign currency translation are as follows:

		For nine months ended  September 30,
		2020	2019
		(USD to RMB/ USD to HKD)	(USD to RMB/ USD to HKD)
Assets and liabilities	period end exchange rate	6.8033 / 7.7501	7.1383/ 7.8399
Revenue and expenses	period average	6.9957 / 7.7576	6.8633/ 7.8384

E. Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk are cash, accounts receivable and other receivables arising from its normal business activities. The Company places its cash in what it believes to be credit-worthy financial institutions. The majority of sales are either cash receipt in advance or cash receipt upon delivery. For nine months ended September 30, 2020 and 2019, no customer accounted for more than 10% of net revenue. As of September 30, 2020 and December 31, 2019, three and three customers accounted for more than 5% of net accounts receivable, respectively. For those credit sales, the Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectible accounts and, as a consequence, believes that its accounts receivable credit risk exposure beyond such allowance is limited.

F. Cash and cash equivalents

Cash and cash equivalents include all cash, deposits in banks and other liquid investments with initial maturities of three months or less.

G. Accounts receivable

Accounts receivable are recorded at net realizable value consisting of the carrying amount less an allowance for uncollectible accounts as needed. The allowance for doubtful accounts is the Company's best estimate of the amount of probable credit losses in the Company's existing accounts receivable. The Company determines the allowance based on aging data, historical collection experience, customer specific facts and economic conditions. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. 

H. Inventories

Inventories, consisting principally of medicines, are stated at the lower of cost or market using the first-in, first-out method ("FIFO"). This policy requires the Company to make estimates regarding the market value of inventory, including an assessment of excess or obsolete inventory. The Company determines excess or obsolete inventory based on an estimate of the future demand and estimated selling prices for its products. 

I. Construction in progress

Construction in progress represents the new hospital painting and decoration costs. All direct costs relating to the polishing and decoration are capitalized as construction in progress. No depreciation is provided in respect of construction in progress. 

J. Property and equipment

Property and equipment are stated at cost. Expenditures for maintenance and repairs are charged to operations when incurred, while additions and betterments are capitalized. Depreciation is recorded on a straight-line basis reflective of the useful lives of the assets. When assets are retired or disposed, the asset's original cost and related accumulated depreciation are eliminated from accounts and any gain or loss is reflected in income.

The estimated useful lives for property and equipment categories are as follows:

Buildings and improvement	10-40 years
Medical equipment	5-15 years
Transportation instrument	5-10 years
Office equipment	5-10 years
Electronic equipment	5-10 years
Software	5-10 years

K. Leases

In February 2016, the FASB issued ASU 2016-02–Leases (Topic 842), which increases transparency and comparability among organizations by recognizing right-of-use ("ROU") lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The ASU maintains a distinction between finance leases and operating leases, which is substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous lease guidance. Retaining this distinction allows the recognition, measurement and presentation of expenses and cash flows arising from a lease to remain similar to the previous accounting treatment. A lessee is permitted to make an accounting policy election by class of underlying asset to exclude from balance sheet recognition any lease assets and lease liabilities with a term of 12 months or less, and instead to recognize lease expense on a straight-line basis over the lease term. For both financing and operating leases, the ROU asset and lease liability is initially measured at the present value of the lease payments in the consolidated balance sheet. In July 2018, the FASB issued ASU 2018-11 which provides entities with the option to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, if necessary. As discussed in Note 8, we adopted ASU 2016-02–Leases (Topic 842) effective January 1, 2019 utilizing the transition option provided by ASU 2018-11.

L. Fair Value Measurement

The Company applies the provisions of ASC Subtopic 820-10, Fair Value Measurements, for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements. ASC 820 also establishes a framework for measuring fair value and expands disclosures about fair value measurements.

Fair value is defined as the price that would be received when selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining the fair value for the assets and liabilities required or permitted to be recorded, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs that may be used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; 

Level 2: Quoted prices in markets that are not active, or inputs that is observable, either directly or indirectly, for substantially the full term of the asset or liability; 

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

The following table sets forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis:

	Carrying Value at September 30,		Fair Value Measurement at September 30, 2020
	2020		Level 1		Level 2		Level 3
Convertible Note	$	-	$	-	$	-	$	-
Warrant liability	$	42,818	$	-	$	42,818	$	-

A summary of changes in Warrant liability for the nine months ended September 30, 2020 was as follows:

Balance at January 1, 2020	$	110,840
Change in fair value of warrant liability		181,136
Exercise in January, 2020		(249,158	)
Balance at September 30, 2020		42,818

The fair value of the outstanding warrants was calculated using the Binomial Option Pricing Model with the following assumptions at inception and on subsequent valuation date:

	September 30, 2020
Warrants	Auctus
Market price per share (USD/share)	$	0.56
Exercise price (USD/share)		0.60
Risk free rate		0.241	%
Dividend yield		-
Expected term/Contractual life (years)		1.83
Expected volatility		74.08	%

A summary of changes in Convertible Note for the nine months ended September 30, 2020 was as follows:

Balance at January 1, 2020	$	774,567
Change in fair value of convertible notes		(332,363	)
Paid in February, 2020		(202,204	)
Paid in April, 2020		(250,000	)
Balance at September 30, 2020		-

In May and July of 2019, the Company issued three convertible promissory notes, one each to Labrys Fund, LP, Auctus Fund, LLC and Harbor Gates Capital, LLC. On October 31, 2019, the Company repaid the convertible promissory note issued to Labrys Fund, LP, On February 11, 2020, the Company repaid the convertible promissory note issued to Harbor Gates Capital, LLC. On April 30, 2020, the Company fully satisfied the Promissory Note that it issued to Auctus Fund, LLC in July 2019. Therefore, the Labrys', Harbor Gates' and Auctus' Convertible Notes have no fair value as of each subsequent reporting date.

Cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities are reflected in the accompanying consolidated financial statements at amounts that approximate fair value because of the short-term nature of these instruments. The fair value of the Company's capital lease obligations also approximates carrying value as they bear interest at current market rates.

M. Segment and geographic information

The Company is operating in one segment in accordance with the accounting guidance FASB ASC topic 280, "Segment Reporting". The Company's revenues are from customers in People's Republic of China ("PRC"). All assets of the company are located in PRC.

N. Revenue recognition

The Company recognizes revenue when the amount of revenue can be reliably measured, it is probable that economic benefits will flow to the entity, and specific criteria have been met for each of the Company's activities as described below. See Note 11 for details.

Pharmaceutical sales

Revenue from the sale of pharmaceuticals is recognized when it is both earned and realized. The Company's policy is to recognize the sale of pharmaceuticals when the title of the pharmaceuticals, ownership and risk of loss have transferred to the purchasers, and collection of the sales proceeds is reasonably assured, all of which generally occur when the patient receives the pharmaceuticals.

Given the nature of this revenue source of the Company's business and the applicable rules guiding revenue recognition, the revenue recognition practices for the sale of pharmaceuticals do not contain estimates that materially affect results of operations nor does the Company have any policy for return of products.

Patient Services

In accordance with the medical licenses under which Jiarun operates, the scope of its approved medical patient service includes medical consulting, surgery, obstetrics and gynecology, pediatrics, anesthesia, clinic laboratory, medical imaging, and traditional Chinese medicine.

Patient service revenue is recognized when it is both earned and realized. The Company's policy is to recognize patient service revenue when the medical service has been provided to the patient and collection of the revenue is reasonably assured.

The Company provides services to both patients covered by social insurance and patients who are not covered by social insurance. The Company charges the same rates for patient services regardless of the coverage by social insurance.

Patients who are not covered by social insurance are liable for the total cost of medical treatment.

● For out-patient medical services, revenue is recognized when the Company provides medical service to the patient. The Company collects payment before the patient leaves the hospital.

● For in-patient medical services, when a patient checks into the hospital, the Company estimates the approximate fee the patient will spend in the hospital based on patient's symptoms. At that time, the Company collects the estimated fees from the patient and records the payment as deposits received.

During the in-patient services period, the Company recognizes revenue when the patient service is provided and deducts the cost of service from the deposit received. The Company records these transactions based on daily reports generated by the respective medical department. When medical services exceed patient deposits received the Company records revenue and accounts receivable when the patient services are provided.

When a patient checks out from the hospital, the Company calculates and determines the remaining deposit, if any, and refunds the unused portion of the deposit to the patients. In the case where the patient has a balance in accounts receivable, accounts receivable are required to be paid in full at checkout.

Patients covered by social insurance will receive a portion or full medical services reimbursed or paid by the social insurance agencies via prepaid cards or insurance claim settlement process.

Settlement process

The Company is a registered medical service vendor under the state social insurance system for various social insurance agencies. The insurance agencies include "Social Medical Insurance funded by PRC and Heilongjiang Province" and "Heilongjiang Province New Rural Cooperative Medical Care System". The Company utilizes an online system maintained by the social insurance agencies for patients who are covered by social insurance agencies.

● The Company records patients' information in the social insurance system at check in. The system determines the covered portion and amounts based on the information input to the system.

● At the time of check out, the Company collects payment for services the patients are liable for and records accounts receivable from the social insurance agencies for the portion of services covered by the social insurance. In the case that the patients have made payment during the in-patient services period, the Company refunds any amount in excess of the portion they are liable for.

● The Company is responsible for submitting supporting documents of patient services provided to the social insurance agencies for their review. The Company is also required to reconcile its records with the social insurance agencies once a month. Once the social insurance agencies approve the reconciliation, the insurance agencies will settle the accounts receivable balance in the next month following the approval.

O. Income taxes

The Company has adopted FASB ASC Topic 740, "Income Taxes," which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

In July 2006, the FASB issued FIN 48(ASC 740-10), Accounting for Uncertainty in Income Taxes-An Interpretation of FASB Statement No. 109 (ASC 740), which requires income tax positions to meet a more-likely-than-not recognition threshold to be recognized in the financial statements. Under FIN 48 (ASC 740-10), tax positions that previously failed to meet the more-likely-than-not threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met.

The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations and court rulings. Therefore, the actual liability may be materially different from our estimates, which could result in the need to record additional tax liabilities or potentially reverse previously recorded tax liabilities or deferred tax asset valuation allowance.

As a result of the implementation of FIN 48 (ASC 740-10), the Company made a comprehensive review of its portfolio of tax positions in accordance with recognition standards established by FIN 48 (ASC 740-10). The Company recognized no material adjustments to liabilities or shareholder's equity as a result of the implementation. The adoption of FIN 48 did not have a material impact on the Company's unaudited consolidated financial statements.

Enterprise income tax is determined under the Provisional Regulations of PRC Concerning Income Tax on Enterprises promulgated by the PRC, income tax is payable by enterprises at a rate of 25% of their taxable income.

P. Earnings per share

Basic earnings per common share is computed by using net income divided by the weighted average number of shares of common stock outstanding for the periods presented. Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding for the periods presented.

Q. Reclassification

The comparative figures have been reclassified to conform to current year presentation.

R. Recently adopted accounting pronouncements

The FASB has issued Accounting Standards Update (ASU) No. 2019-01, Leases (Topic 842): Codification Improvements. The new ASU aligns the guidance for fair value of the underlying asset by lessors that are not manufacturers or dealers in Topic 842 with that of existing guidance. As a result, the fair value of the underlying asset at lease commencement is its cost, reflecting any volume or trade discounts that may apply. However, if there has been a significant lapse of time between when the underlying asset is acquired and when the lease commences, the definition of fair value (in Topic 820, Fair Value Measurement) should be applied.

The ASU also requires lessors within the scope of Topic 942, Financial Services—Depository and Lending, to present all "principal payments received under leases" within investing activities.

Finally, the ASU exempts both lessees and lessors from having to provide certain interim disclosures in the fiscal year in which a company adopts the new leases standard.

We do not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows. 

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Accounts Receivable, Net

9 Months Ended

Sep. 30, 2020

Receivables, Net, Current [Abstract]

ACCOUNTS RECEIVABLE, NET

NOTE 3. ACCOUNTS RECEIVABLE, NET

	September 30		December 31
	2020		2019
	(Unaudited)
Accounts receivable	$	5,723,965	$	7,308,224
Less: allowance for doubtful debts		2,790,343		2,724,389
	$	2,933,622	$	4,583,835

The Company experienced $ nil bad debts during three and nine months ended September 30, 2020 and 2019. The allowance for doubtful debts as of September 30, 2020 and December 31, 2019 was derived from two years old insurance claims in excess of reimbursable limits submitted by the Company to the Harbin Medical Insurance Management Centre.

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Inventories

9 Months Ended

Sep. 30, 2020

Inventory Disclosure [Abstract]

INVENTORIES

NOTE 4. INVENTORIES

At September 30, 2020 and December 31, 2019, inventories consist of the following:

	September 30		December 31
	2020		2019
	(Unaudited)
Western pharmaceuticals	$	755,730	$	554,414
Chinese herbal medicine		32,153		37,621
Medical consumables		629,942		475,916
Other material		7,857		4,790
	$	1,425,682	$	1,072,741

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Prepayment

9 Months Ended

Sep. 30, 2020

Prepaid Expense, Current [Abstract]

PREPAYMENT

NOTE 5. PREPAYMENT

At September 30, 2020 and December 31, 2019 prepayment consists of the following:

	September 30		December 31
	2020		2019
	(Unaudited)
Deposits on medical equipment	$	517,329	$	744,569
Heating fees		-		175,736
Others		266,768		381,046
	$	784,097	$	1,301,351

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Property and Equipment

9 Months Ended

Sep. 30, 2020

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

NOTE 6. PROPERTY AND EQUIPMENT

At September 30, 2020 and December 31, 2019, property and equipment, at cost, consist of:

	September 30,			December 31,
	2020			2019
	(Unaudited)
Transportation equipment	$	1,213,581		$	1,184,896
Medical equipment		22,541,264			17,291,984
Electrical equipment		2,197,208			1,842,552
Office equipment and others		1,102,580			964,669
Buildings		24,274,045			23,700,288
Software		189,522			185,043
Total fixed assets at cost		51,518,200			45,169,432
Accumulated depreciation		(9,050,875	)		(7,021,013	)
Total fixed assets before reclassification	$	42,467,325		$	38,148,419
Reclass to Right-of-use assets		(13,803,342	)		(15,309,797	)
Total fixed assets, net		28,663,983			22,838,622

The Company recorded depreciation expense of $649,726 and $551,810, $1,808,738 and $1,644,389 for the three and nine months ended September 30, 2020 and 2019, respectively.

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Long Term Deferred Expenses

9 Months Ended

Sep. 30, 2020

Deferred Expenses [Abstract]

LONG TERM DEFERRED EXPENSES

NOTE 7. LONG TERM DEFERRED EXPENSES

On May 7, 2015, July 3, 2015 and October 16, 2015, Jiarun entered into three lease agreements to lease medical equipment from Hair Finance Leasing (China) Co., Ltd. ("Hair"), a third party, for a five-year period, in which Jiarun is required to pay a consulting fee to Hair for the services provided over the five years.

During the year ended December 31, 2018, the Company paid approximately $1.6 million for the decoration of its outpatient building and the two Branch Hospitals. The consulting and decoration fees paid but attributable to the current and subsequent accounting periods were accounted for as deferred expenses and long-term deferred expenses.

The current portion of the prepaid consulting and decoration fees were recorded as deferred expenses of $435,881 and $257,203 as of September 30, 2020 and December 31, 2019. The long-term deferred expenses were $2,519,141 and $2,978,936 as of September 30, 2020 and December 31, 2019.

The Company recorded consulting fee of $ 5,012 and $16,049 for the three months ended September 30, 2020 and 2019, and decoration fees of $106,715 and $49,303 for the three months ended September 30, 2020 and 2019, respectively. The Company recorded consulting fee of $32,869 and $55,169 for the nine months ended September 30, 2020 and 2019, and decoration fees of $316,705 and $169,477 for the nine months ended September 30, 2020 and 2019, respectively.

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Right-of-Use Assets and Lease Liabilities

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

NOTE 8. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

On January 1, 2019, the Company adopted Accounting Standards Codification ("ASC") Topic 842, "Leases" ("new lease standard"). The new lease standard was adopted using the optional transition method approach that allows for the cumulative effect adjustment to be recorded without restating prior periods. The Company has elected the practical expedient package related to the identification, classification and accounting for initial direct costs whereby prior conclusions do not have to be reassessed for leases that commenced before the effective date. As the Company will not reassess such conclusions, the Company has not adopted the practical expedient to use hindsight to determine the likelihood of whether a lease will be extended or terminated or whether a purchase option will be exercised.

Finance lease 

On June 5, 2013, Jiarun entered into a lease agreement to lease its hospital building from Harbin Baiyi Real Estate Development Co., Ltd ("the Lessor"), which is owned by Junsheng Zhang, a related party. The Lease has a term of 30 years, requiring annual prepayments of a rent of RMB7,000,000. The first payment was made on September 1, 2014. At the end of the leasing period, a final payment will be made to settle the total leasing amount. Both parties agreed for Jiarun to pay RMB3,000,000 as deposit at the execution of the Leasing agreement, which will be deducted from the final rental settlement. In accordance to accounting principles and treatment, this payment was booked as deposit in our accounts. The Lessor shall return the premium for lease to Jiarun at expiration of the Contract or pledge the deposit as part of rents for the last period or periods in 2043. The implicit interest rate, which determined the rental fee after fair value was amortized, was calculated at 6.55%, which is the benchmark interest rate announced from The People's Bank of China. After the completion of all payments, the ownership of the lease item will be transferred to Jiarun.

The leasing agreement for our hospital building contains the following provisions:

● Rental payments of RMB7,000,000 (equivalent to $1,004,593) per year, payable at the beginning of September.

● An option allowing the lessor to extend the lease for thirty years beyond the last renewal option exercised by the Company.

● A guarantee by the Company that the lessor will realize $nil from selling the asset at the expiration of the lease This lease is a capital lease because its term (30 years) exceeds 75% of the building's estimated economic life. In addition, the present value ($15,185,032) of the minimum lease payments exceeds 90% of the fair value of the building ($15,721,295).

● Accumulated annual amounts resulting from applying an interest rate of 6.55% to the balance of the lease obligation at the beginning of each year. The lease obligation is increased by the amount of the prior year's interest, the amount of the net rental payment at the beginning of each year; and this amount represents the guaranteed residual value at the end of the lease term.

On May 7, 2015, July 3, 2015, October 16, 2015, April 6, 2016, November 25, 2016, April 5 2017 and May 25, 2019 Jiarun entered into several lease agreements to lease medical equipment and an elevator from three lease finance companies, which are all unrelated third parties, for three to five-year periods, in which Jiarun is required to make monthly or quarterly payments toward the leases. The Company was also required to pay deposits up front, which deposits will later be offset against the last quarterly payment. The medical equipment and elevator will be transferred to Jiarun upon the completion of the agreement. 

On March 25, 2019 Jiarun entered into a sale and leaseback agreement for the sale-leaseback of properties from Haitong Hengxin International Leasing Company Limited, with a collective net value of $2,609,047. 

Operating lease 

In August 2017 JHCC leased office space under non-cancellable operating lease agreements. Under terms of the lease agreement, from August 2017, JHCC is committed to make lease payments of approximately $36,881 per year for 5 years. This office is used for outpatient services by 2nd Branch Hospital.

In December 2017 JHCC leased office space under non-cancellable operating lease agreements. Under terms of the lease agreement, from December 2017, JHCC is committed to make lease payments of approximately $68,128 per year for 5 years. This office is used by 1^st Branch Company.

The Company's adoption of the new lease standard included new processes and controls regarding asset financing transactions, financial reporting and a system-related implementation required for the new lease standard. The impact of the adoption of the new lease standard included the recognition of right-of-use ("ROU") assets and lease liabilities. The adoption of the new lease standard resulted in additional net lease assets and net lease liabilities of approximately $14.06 million and $14.14 million, respectively, as of September 30, 2020.

As of September 30, 2020, the Company has the following amounts recorded on the Company's unaudited condensed consolidated balance sheet:

	September 30, 2020		December 31, 2019
	(Unaudited)
Assets
Operating lease assets	$	255,646	$	331,693
Finance lease assets		13,803,342		15,309,796
Total	$	14,058,988	$	15,641,489
Liabilities
Current
Operating lease liabilities		117,681		111,414
Finance lease liabilities		1,635,519		2,569,007
Long-term
Operating lease liabilities		137,965		220,279
Finance lease liabilities		12,253,566		13,075,654
Total	$	14,144,731	$	15,976,354

The future minimum lease payments for annual capital lease obligation as of September 30, 2020 are as follows:

Year	Amounts
2020	$	1,263,151
2021		2,155,864
2022		1,134,231
Thereafter		9,335,839
Total	$	13,889,085

The Company recorded finance interest lease fees of $275,126 and $231,063 for the three months ended September 30, 2020 and 2019, and recorded finance interest lease fees of $816,509 and $812,057 for the nine months ended September 30, 2020 and 2019, respectively.

Future annual minimum lease payments, for non-cancellable operating leases are as follows:

Year ending December 31	Amount $
2020		30,034
2021		124,992
2022		100,620
		255,646

The company has recorded operating lease expense of $27,900 and $24,112 for three months ended September 30, 2020 and 2019, and recorded operating lease expense of $81,764 and $80,864 for nine months ended September 30, 2020 and 2019 respectively

At September 30, 2020 right-of-use assets, consist of:

	September 30, 2020 (Unaudited)									December 31, 2019
	Operating lease			Finance lease			Total			Operating lease			Finance lease			Total
Lease assets	$	337,410		$	14,619,851		$	14,957,261		$	432,892		$	16,390,259		$	16,823,151
Accumulated amortization		(81,764	)		(816,509	)		(898,273	)		(101,199	)		(1,080,463	)		(1,181,662	)
Total right-of-use assets, net	$	255,646		$	13,803,342		$	14,058,988		$	331,693		$	15,309,796		$	15,641,489

The Company recorded finance lease amortization expense of $275,126 and $391,314 in depreciation and amortization for the three months ended September 30, 2020 and 2019, respectively, and recorded finance lease amortization expense of $816,509 and $929,538 in depreciation and amortization for the nine months ended September 30, 2020 and 2019, respectively. For the three and nine months ended September 30, 2020, the amount of depreciation and amortization was $649,726 and $1,808,738, also included general property and equipment depreciation of $374,600 and $992,229.

The Company recorded operating lease expense of $73,174 and $24,112 for the three months ended September 30, 2020 and 2019, and recorded operating lease expense of $159,782 and $80,864 for the nine months ended September 30, 2020 and 2019, including operating lease amortization expense of $27,900 and $24,573 for the three months ended September 30, 2020 and 2019, and $81,764 and $75,003 for the nine months ended September 30, 2020 and 2019, respectively.

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Derivative Financial Instruments

9 Months Ended

Sep. 30, 2020

Investments, All Other Investments [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS

NOTE 9. DERIVATIVE FINANCIAL INSTRUMENTS

Derivative Financial Instruments

The Company has adopted the provisions of ASC subtopic 825-10, Financial Instruments ("ASC 825-10"). ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Debt derivatives – In May and July of 2019, the Company issued three convertible promissory notes to Labrys Fund, LP. Auctus Fund, LLC and Harbor Gates Capital, LLC The Notes were convertible into common stock, at holders' option, at a discount to the market price of the Company's common stock. The Company has identified the embedded derivatives relating to certain anti-dilutive (reset) provisions in the Notes. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date of debenture and record the change in fair value as of each subsequent reporting date.

During 2019 and the first nine months of 2020, the Company satisfied the Notes issued to Labrys Fund, LP, Harbor Gates Capital, LLC and Auctus Fund, LLC.

Warrant liabilities – The Company issued two common stock purchase warrants (the "warrants") to purchase 28,200 shares and 21,000 shares of the registrant's common stock to Labrys Fund, LP and Auctus Fund, LLC. These warrants contain certain reset provisions. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date (issuance date) and to fair value as of each subsequent reporting date.

In January 2020 the Company issued 38,322 shares of common stock to Labrys Fund, LP in full satisfaction of its warrant. At September 30, 2020, the Company marked to market the fair value of the Auctus Fund warrant liability and determined a fair value of $42,818. The Company recorded a loss from issuance expense and change in fair value of warrant liability of $(263,953) and $181,136 for three and nine months ended September 30, 2020. The fair value of the warrant liability was determined using Binomial Option Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 70.08%, (3) weighted average risk-free interest rate of 0.241%, (4) expected life of 1.83 years, and (5) the quoted market price of the Company's common stock at each valuation date.

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Non-controlling Interests

9 Months Ended

Sep. 30, 2020

Noncontrolling Interest [Abstract]

NON-CONTROLLING INTERESTS

NOTE 10. NON-CONTROLLING INTERESTS

Jiarun is the Company's majority-owned subsidiary which is consolidated in the Company's financial statements with a non-controlling interest recognized. The Company holds a 70% equity interest in Jiarun as of September 30, 2020 and December 31, 2019.

As of September 30, 2020 and December 31, 2019, NCI on the consolidated balance sheet was $8,885,529 and $8,168,613, respectively, representing the 30% of Jiarun that is owned by Junsheng Zhang.

For the three months ended September 30, 2020, the comprehensive income attributable to shareholders' equity and NCI is $1,414,844 and $565,116 respectively. For the nine months ended September 30, 2020, the comprehensive income attributable to shareholders' equity and NCI is $1,574,442 and $716,916, respectively.

For the three months ended September 30, 2019, the comprehensive income attributable to shareholders' equity and NCI is $(211,130) and $74,257 respectively. For the nine months ended September 30, 2019, the comprehensive income attributable to shareholders 'equity and NCI is $1,085,897 and $808,118, respectively. 

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Revenue

9 Months Ended

Sep. 30, 2020

Revenue [Abstract]

Revenue

NOTE 11. Revenue

The Company's revenue consists of pharmaceuticals sales and patient care revenue.

	Three Months Ended September 30,
	2020		2019
	(Unaudited)		(Unaudited)
Pharmaceuticals:
Western pharmaceuticals	$	1,869,252	$	1,989,732
Chinese medicine		235,613		296,327
Herbal medicine		358,086		257,971
Total pharmaceuticals	$	2,462,951	$	2,544,030
Patient services:
Medical consulting	$	3,509,366	$	2,732,914
Medical treatment		3,496,691		2,215,895
Others		547,077		270,361
Total patient services	$	7,553,134	$	5,219,170
	$	10,016,085	$	7,763,200

	Nine Months Ended September 30,
	2020		2019
	(Unaudited)		(Unaudited)
Pharmaceuticals:
Western pharmaceuticals	$	4,682,550	$	6,229,016
Chinese medicine		558,715		989,317
Herbal medicine		812,883		728,587
Total pharmaceuticals	$	6,054,148	$	7,946,920
Patient services:
Medical consulting	$	7,607,046	$	7,197,523
Medical treatment		8,586,527		7,078,626
Others		772,734		683,904
Total patient services	$	16,966,307	$	14,960,053
	$	23,020,455	$	22,906,973

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Income Tax Expense

9 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

INCOME TAX EXPENSE

NOTE 12. INCOME TAX EXPENSE

The Company uses the asset-liability method of accounting for income taxes prescribed by ASC 740 Income Taxes. The Company and its subsidiaries each file their taxes individually.

United States

JRSS is subject to the United States of America tax at a tax rate of 21%. No provision for the US federal income taxes has been made as the Company had no US taxable income for the periods presented, and its earnings are planned to be reinvested indefinitely into the operations of the Company in the PRC.

BVI

JHCL was incorporated in the BVI and, under the current laws of the BVI, it is not subject to income tax.

Hong Kong

Runteng was incorporated in Hong Kong and is subject to Hong Kong profits tax. Runteng is subject to Hong Kong taxation on its activities conducted in Hong Kong and income arising in or derived from Hong Kong. The applicable statutory tax rate is 16.5%.

PRC

Corporate Income Tax (CIT) is determined under the Provisional Regulations of PRC Concerning Income Tax on Enterprises promulgated by the PRC. Income tax is payable by enterprises at a rate of 25% of their taxable income.

According to the PRC "Notice on Preferential Corporate Income Tax (CIT) Treatment for Eligible Equipment or Machinery (Cai Shui [2018] No. 54)", a 100% immediate tax deduction for CIT purposes is allowed on the condition that the unit price of each item of equipment or machinery is individually less than RMB5 million. Depreciation for tax purposes is not required. Basis differences between tax and GAAP for depreciation of property and equipment exist because in 2020 the Company purchased Eligible Equipment for RMB 35.8 million, with $1.1 million deferred income tax, creating differences between the tax treatment mandated by the Chinese government and GAAP tax treatment.

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Related Party Transactions

9 Months Ended

Sep. 30, 2020

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 13. RELATED PARTY TRANSACTIONS

The following is the list of the related parties with which the Group has had transactions:

(a) Junsheng Zhang, the Chairman of the Company 

(b) Harbin Baiyi Real Estate Development Co., Ltd., owned by Junsheng Zhang 

(c) Harbin Jiarun Pharmacy Co., Ltd., owned by Junsheng Zhang 

(d) Heilongjiang Province Runjia Medical Equipment Company Limited, owned by Junsheng Zhang 

(e) Jiarun Super Market Co., Ltd., owned by Junsheng Zhang 

(f) Harbin Qi-run Pharmacy Limited, owned by Junsheng Zhang 

(g) Yanhua Xing and Weiguang Song, the former shareholders of JHCL 

Amount due from related parties

The amount due from related parties became $ Nil in 2020 and 2019.

Amount due to related parties

Amount due to related parties consisted of the following as of the periods indicated:

	September 30,		December 31,
Name of related parties	2020		2019
	(Unaudited)
Harbin Jiarun Pharmacy Co., Ltd	$	22,876	$	-
Heilongjiang Province Runjia Medical Equipment Co., Ltd		2,132		4,306
Harbin Baiyi Real Estate Development Co., Ltd,		-		1,043,131
Junsheng Zhang		413,238		747,103
	$	438,246	$	1,794,540

Amount due to Harbin Jiarun Pharmacy Co., Ltd., and Heilongjiang Province Runjia Medical Equipment Company Limited were mainly for the balance for purchase of pharmaceuticals and medical material from these companies.

Amount due to Baiyi mainly represented the debt for the inpatient and outpatient building extension decoration and beauty center decoration.

Amounts due to Junsheng Zhang represented the balance paid by Mr. Zhang for the daily operation of the Company.

Related parties' transactions

Purchase of pharmaceuticals and medical material from related parties consisted of the following for the periods indicated:

	For nine months ended September 30,
Name of related parties	2020		2019
Harbin Jiarun Pharmacy Co., Ltd	$	22,876	$	69,583
Heilongjiang Province Runjia Medical Equipment Co., Ltd		2,278		7,201
	$	25,.154	$	76,784

Deposits for capital leases and capital lease obligations

On June 5, 2013, Jiarun entered into a Lease Agreement to lease a new hospital building from Harbin Baiyi Real Estate Development Co., Ltd, which is owned by Junsheng Zhang, a related party. As of September 30, 2020, the Company has balance of deposits for capital leases and capital lease obligations of $440,963 and $11,541,555, respectively. As of December 31, 2019, the Company has balance of deposits for capital leases and capital lease obligations of $447,021 and $13,148,213, respectively.

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Basic and Diluted Earnings Per Share

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

BASIC AND DILUTED EARNINGS PER SHARE

NOTE 14. BASIC AND DILUTED EARNINGS PER SHARE

Basic net income per share is computed using the weighted average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares comprise shares issuable upon the exercise of share-based awards, using the treasury stock method. The reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for income from continuing operations is shown as follows:  

	Nine Months Ended September 30,
	2020		2019
	(Unaudited)		(Unaudited)
Numerator:
Net income available to common stockholders	$	1,212,681	$	1,798,663
Denominator:
Basic weighted-average number of shares outstanding		18,021,848		16,380,863
Diluted weighted-average number of shares outstanding		18,059,240		16,398,532
Net income per share:
Basic EPS	$	0.0673	$	0.1098
Diluted EPS	$	0.0672	$	0.1097

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Contingencies and Commitment

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

CONTINGENCIES AND COMMITMENT

 NOTE 15. CONTINGENCIES AND COMMITMENT

Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company's management and legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company's legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company's financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. There was no probable or reasonably possible loss contingency as of September 30, 2020 and December 31, 2019.

Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.

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Common Stock

9 Months Ended

Sep. 30, 2020

Common Stock [Abstract]

COMMON STOCK

NOTE 16. COMMON STOCK

During the first quarter of 2020, the Company issued 38,332 shares to Labrys Fund, LP in full satisfaction of a common stock purchase warrant that the Company had sold to Labrys Fund, LP during 2019, On February 27, 2020, Auctus Fund, LLC converted into 2,000 shares of the Company's common stock with $2,400 in accrued interest and fees arising under the Promissory Note it had purchase from the Company in July 2019. On August 4, 2020, the Company issued 40,000 shares to StockVest for advertising, promotional and marketing services.

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Going Concern

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

GOING CONCERN

NOTE 17. GOING CONCERN

As reflected in the accompanying consolidated financial statements, the Company had a $5,575,971 negative retained earnings or accumulated deficit as of September 30, 2020; in addition, the Company's total current liabilities exceeded its current assets by $2,950,924. These factors raised substantial doubt about its ability to continue as a going concern. In view of the matters described above, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company's ability to raise additional capital, obtain financing and succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

To continue as a going concern, the Company is actively pursuing additional funding and strategic partners to enable it to implement its business plan. In addition, the Company is also working to devote more efforts to improve its operation and generate more profits. Management believes that these actions will allow the Company to continue its operations through the next fiscal year.

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Subsequent Events

9 Months Ended

Sep. 30, 2020

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 18. SUBSEQUENT EVENTS

The Management of the Company determined that there were no material reportable subsequent events required to be disclosed.

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Summaries of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Basis of presentation

A. Basis of presentation

The consolidated financial statements have been prepared in accordance with the United States generally accepted accounting principles ("U.S. GAAP").

Principles of consolidation

B. Principles of consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company transactions and balances have been eliminated in consolidation. Non-controlling interests represent the equity interest in Jiarun that is not attributable to the Company. Non-controlling interest is reported in the consolidated financial position within equity, separate from the Company's equity. Net income or loss and comprehensive income or loss are attributed to the Company's and the non-controlling interest.

Use of estimates

C. Use of estimates

The preparation of audited consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ from those estimates. Significant items subject to such estimates and assumptions include valuation allowances for receivables and recoverability of carrying amount and the estimated useful lives of long-lived assets. These estimates are often based on complex judgments and assumptions that management believes to be reasonable but are inherently uncertain and unpredictable. Actual results could differ from these estimates.

Functional currency and foreign currency translation

D. Functional currency and foreign currency translation

JRSS and JHCL's functional currency is the United States dollar ("US$"). Runteng's functional currency is the Hong Kong dollar ("HK$"). The functional currency of Jiarun is the Renminbi ("RMB").

The Company's reporting currency is US$. Assets and liabilities of Runteng and Jiarun are translated at the current exchange rate at the balance sheet dates, revenues and expenses are translated at the average exchange rates during the reporting periods, and equity accounts are translated at historical rates. Translation adjustments are reported in other comprehensive income.

The exchange rates used for foreign currency translation are as follows:

		For nine months ended  September 30,
		2020	2019
		(USD to RMB/ USD to HKD)	(USD to RMB/ USD to HKD)
Assets and liabilities	period end exchange rate	6.8033 / 7.7501	7.1383/ 7.8399
Revenue and expenses	period average	6.9957 / 7.7576	6.8633/ 7.8384

Concentration of Credit Risk

E. Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk are cash, accounts receivable and other receivables arising from its normal business activities. The Company places its cash in what it believes to be credit-worthy financial institutions. The majority of sales are either cash receipt in advance or cash receipt upon delivery. For nine months ended September 30, 2020 and 2019, no customer accounted for more than 10% of net revenue. As of September 30, 2020 and December 31, 2019, three and three customers accounted for more than 5% of net accounts receivable, respectively. For those credit sales, the Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectible accounts and, as a consequence, believes that its accounts receivable credit risk exposure beyond such allowance is limited.

Cash and cash equivalents

F. Cash and cash equivalents

Cash and cash equivalents include all cash, deposits in banks and other liquid investments with initial maturities of three months or less.

Accounts receivable

G. Accounts receivable

Accounts receivable are recorded at net realizable value consisting of the carrying amount less an allowance for uncollectible accounts as needed. The allowance for doubtful accounts is the Company's best estimate of the amount of probable credit losses in the Company's existing accounts receivable. The Company determines the allowance based on aging data, historical collection experience, customer specific facts and economic conditions. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. 

Inventories

H. Inventories

Inventories, consisting principally of medicines, are stated at the lower of cost or market using the first-in, first-out method ("FIFO"). This policy requires the Company to make estimates regarding the market value of inventory, including an assessment of excess or obsolete inventory. The Company determines excess or obsolete inventory based on an estimate of the future demand and estimated selling prices for its products.

Construction in progress

I. Construction in progress

Construction in progress represents the new hospital painting and decoration costs. All direct costs relating to the polishing and decoration are capitalized as construction in progress. No depreciation is provided in respect of construction in progress.

Property and equipment

J. Property and equipment

Property and equipment are stated at cost. Expenditures for maintenance and repairs are charged to operations when incurred, while additions and betterments are capitalized. Depreciation is recorded on a straight-line basis reflective of the useful lives of the assets. When assets are retired or disposed, the asset's original cost and related accumulated depreciation are eliminated from accounts and any gain or loss is reflected in income.

The estimated useful lives for property and equipment categories are as follows:

Buildings and improvement	10-40 years
Medical equipment	5-15 years
Transportation instrument	5-10 years
Office equipment	5-10 years
Electronic equipment	5-10 years
Software	5-10 years

Leases

K. Leases

In February 2016, the FASB issued ASU 2016-02–Leases (Topic 842), which increases transparency and comparability among organizations by recognizing right-of-use ("ROU") lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The ASU maintains a distinction between finance leases and operating leases, which is substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous lease guidance. Retaining this distinction allows the recognition, measurement and presentation of expenses and cash flows arising from a lease to remain similar to the previous accounting treatment. A lessee is permitted to make an accounting policy election by class of underlying asset to exclude from balance sheet recognition any lease assets and lease liabilities with a term of 12 months or less, and instead to recognize lease expense on a straight-line basis over the lease term. For both financing and operating leases, the ROU asset and lease liability is initially measured at the present value of the lease payments in the consolidated balance sheet. In July 2018, the FASB issued ASU 2018-11 which provides entities with the option to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, if necessary. As discussed in Note 8, we adopted ASU 2016-02–Leases (Topic 842) effective January 1, 2019 utilizing the transition option provided by ASU 2018-11.

Fair Value Measurement

L. Fair Value Measurement

The Company applies the provisions of ASC Subtopic 820-10, Fair Value Measurements, for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements. ASC 820 also establishes a framework for measuring fair value and expands disclosures about fair value measurements.

Fair value is defined as the price that would be received when selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining the fair value for the assets and liabilities required or permitted to be recorded, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs that may be used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; 

Level 2: Quoted prices in markets that are not active, or inputs that is observable, either directly or indirectly, for substantially the full term of the asset or liability; 

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

The following table sets forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis:

	Carrying Value at September 30,		Fair Value Measurement at September 30, 2020
	2020		Level 1		Level 2		Level 3
Convertible Note	$	-	$	-	$	-	$	-
Warrant liability	$	42,818	$	-	$	42,818	$	-

A summary of changes in Warrant liability for the nine months ended September 30, 2020 was as follows:

Balance at January 1, 2020	$	110,840
Change in fair value of warrant liability		181,136
Exercise in January, 2020		(249,158	)
Balance at September 30, 2020		42,818

The fair value of the outstanding warrants was calculated using the Binomial Option Pricing Model with the following assumptions at inception and on subsequent valuation date:

	September 30, 2020
Warrants	Auctus
Market price per share (USD/share)	$	0.56
Exercise price (USD/share)		0.60
Risk free rate		0.241	%
Dividend yield		-
Expected term/Contractual life (years)		1.83
Expected volatility		74.08	%

A summary of changes in Convertible Note for the nine months ended September 30, 2020 was as follows:

Balance at January 1, 2020	$	774,567
Change in fair value of convertible notes		(332,363	)
Paid in February, 2020		(202,204	)
Paid in April, 2020		(250,000	)
Balance at September 30, 2020		-

In May and July of 2019, the Company issued three convertible promissory notes, one each to Labrys Fund, LP, Auctus Fund, LLC and Harbor Gates Capital, LLC. On October 31, 2019, the Company repaid the convertible promissory note issued to Labrys Fund, LP, On February 11, 2020, the Company repaid the convertible promissory note issued to Harbor Gates Capital, LLC. On April 30, 2020, the Company fully satisfied the Promissory Note that it issued to Auctus Fund, LLC in July 2019. Therefore, the Labrys', Harbor Gates' and Auctus' Convertible Notes have no fair value as of each subsequent reporting date.

Cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities are reflected in the accompanying consolidated financial statements at amounts that approximate fair value because of the short-term nature of these instruments. The fair value of the Company's capital lease obligations also approximates carrying value as they bear interest at current market rates.

Segment and geographic information

M. Segment and geographic information

The Company is operating in one segment in accordance with the accounting guidance FASB ASC topic 280, "Segment Reporting". The Company's revenues are from customers in People's Republic of China ("PRC"). All assets of the company are located in PRC.

Revenue recognition

N. Revenue recognition

The Company recognizes revenue when the amount of revenue can be reliably measured, it is probable that economic benefits will flow to the entity, and specific criteria have been met for each of the Company's activities as described below. See Note 11 for details.

Pharmaceutical sales

Revenue from the sale of pharmaceuticals is recognized when it is both earned and realized. The Company's policy is to recognize the sale of pharmaceuticals when the title of the pharmaceuticals, ownership and risk of loss have transferred to the purchasers, and collection of the sales proceeds is reasonably assured, all of which generally occur when the patient receives the pharmaceuticals.

Given the nature of this revenue source of the Company's business and the applicable rules guiding revenue recognition, the revenue recognition practices for the sale of pharmaceuticals do not contain estimates that materially affect results of operations nor does the Company have any policy for return of products.

Patient Services

In accordance with the medical licenses under which Jiarun operates, the scope of its approved medical patient service includes medical consulting, surgery, obstetrics and gynecology, pediatrics, anesthesia, clinic laboratory, medical imaging, and traditional Chinese medicine.

Patient service revenue is recognized when it is both earned and realized. The Company's policy is to recognize patient service revenue when the medical service has been provided to the patient and collection of the revenue is reasonably assured.

The Company provides services to both patients covered by social insurance and patients who are not covered by social insurance. The Company charges the same rates for patient services regardless of the coverage by social insurance.

Patients who are not covered by social insurance are liable for the total cost of medical treatment.

● For out-patient medical services, revenue is recognized when the Company provides medical service to the patient. The Company collects payment before the patient leaves the hospital.

● For in-patient medical services, when a patient checks into the hospital, the Company estimates the approximate fee the patient will spend in the hospital based on patient's symptoms. At that time, the Company collects the estimated fees from the patient and records the payment as deposits received.

During the in-patient services period, the Company recognizes revenue when the patient service is provided and deducts the cost of service from the deposit received. The Company records these transactions based on daily reports generated by the respective medical department. When medical services exceed patient deposits received the Company records revenue and accounts receivable when the patient services are provided.

When a patient checks out from the hospital, the Company calculates and determines the remaining deposit, if any, and refunds the unused portion of the deposit to the patients. In the case where the patient has a balance in accounts receivable, accounts receivable are required to be paid in full at checkout.

Patients covered by social insurance will receive a portion or full medical services reimbursed or paid by the social insurance agencies via prepaid cards or insurance claim settlement process.

Settlement process

The Company is a registered medical service vendor under the state social insurance system for various social insurance agencies. The insurance agencies include "Social Medical Insurance funded by PRC and Heilongjiang Province" and "Heilongjiang Province New Rural Cooperative Medical Care System". The Company utilizes an online system maintained by the social insurance agencies for patients who are covered by social insurance agencies.

● The Company records patients' information in the social insurance system at check in. The system determines the covered portion and amounts based on the information input to the system.

● At the time of check out, the Company collects payment for services the patients are liable for and records accounts receivable from the social insurance agencies for the portion of services covered by the social insurance. In the case that the patients have made payment during the in-patient services period, the Company refunds any amount in excess of the portion they are liable for.

● The Company is responsible for submitting supporting documents of patient services provided to the social insurance agencies for their review. The Company is also required to reconcile its records with the social insurance agencies once a month. Once the social insurance agencies approve the reconciliation, the insurance agencies will settle the accounts receivable balance in the next month following the approval.

Income taxes

O. Income taxes

The Company has adopted FASB ASC Topic 740, "Income Taxes," which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

In July 2006, the FASB issued FIN 48(ASC 740-10), Accounting for Uncertainty in Income Taxes-An Interpretation of FASB Statement No. 109 (ASC 740), which requires income tax positions to meet a more-likely-than-not recognition threshold to be recognized in the financial statements. Under FIN 48 (ASC 740-10), tax positions that previously failed to meet the more-likely-than-not threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met.

The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations and court rulings. Therefore, the actual liability may be materially different from our estimates, which could result in the need to record additional tax liabilities or potentially reverse previously recorded tax liabilities or deferred tax asset valuation allowance.

As a result of the implementation of FIN 48 (ASC 740-10), the Company made a comprehensive review of its portfolio of tax positions in accordance with recognition standards established by FIN 48 (ASC 740-10). The Company recognized no material adjustments to liabilities or shareholder's equity as a result of the implementation. The adoption of FIN 48 did not have a material impact on the Company's unaudited consolidated financial statements.

Enterprise income tax is determined under the Provisional Regulations of PRC Concerning Income Tax on Enterprises promulgated by the PRC, income tax is payable by enterprises at a rate of 25% of their taxable income.

Earnings per share

P. Earnings per share

Basic earnings per common share is computed by using net income divided by the weighted average number of shares of common stock outstanding for the periods presented. Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding for the periods presented.

Reclassification

Q. Reclassification

The comparative figures have been reclassified to conform to current year presentation.

Recently adopted accounting pronouncements

R. Recently adopted accounting pronouncements

The FASB has issued Accounting Standards Update (ASU) No. 2019-01, Leases (Topic 842): Codification Improvements. The new ASU aligns the guidance for fair value of the underlying asset by lessors that are not manufacturers or dealers in Topic 842 with that of existing guidance. As a result, the fair value of the underlying asset at lease commencement is its cost, reflecting any volume or trade discounts that may apply. However, if there has been a significant lapse of time between when the underlying asset is acquired and when the lease commences, the definition of fair value (in Topic 820, Fair Value Measurement) should be applied.

The ASU also requires lessors within the scope of Topic 942, Financial Services—Depository and Lending, to present all "principal payments received under leases" within investing activities.

Finally, the ASU exempts both lessees and lessors from having to provide certain interim disclosures in the fiscal year in which a company adopts the new leases standard.

We do not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows.

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Summaries of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Schedule of foreign currency translation

		For nine months ended  September 30,
		2020	2019
		(USD to RMB/ USD to HKD)	(USD to RMB/ USD to HKD)
Assets and liabilities	period end exchange rate	6.8033 / 7.7501	7.1383/ 7.8399
Revenue and expenses	period average	6.9957 / 7.7576	6.8633/ 7.8384

Schedule of estimated useful lives for property and equipment categories

Buildings and improvement	10-40 years
Medical equipment	5-15 years
Transportation instrument	5-10 years
Office equipment	5-10 years
Electronic equipment	5-10 years
Software	5-10 years

Schedule of fair value hierarchy our financial assets and liabilities

	Carrying Value at September 30,		Fair Value Measurement at September 30, 2020
	2020		Level 1		Level 2		Level 3
Convertible Note	$	-	$	-	$	-	$	-
Warrant liability	$	42,818	$	-	$	42,818	$	-

Schedule of changes in warrant liability

Balance at January 1, 2020	$	110,840
Change in fair value of warrant liability		181,136
Exercise in January, 2020		(249,158	)
Balance at September 30, 2020		42,818

Schedule of fair value of the outstanding warrants assumptions

	September 30, 2020
Warrants	Auctus
Market price per share (USD/share)	$	0.56
Exercise price (USD/share)		0.60
Risk free rate		0.241	%
Dividend yield		-
Expected term/Contractual life (years)		1.83
Expected volatility		74.08	%

Schedule of changes in convertible note

Balance at January 1, 2020	$	774,567
Change in fair value of convertible notes		(332,363	)
Paid in February, 2020		(202,204	)
Paid in April, 2020		(250,000	)
Balance at September 30, 2020		-

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Accounts Receivable, Net (Tables)

9 Months Ended

Sep. 30, 2020

Receivables, Net, Current [Abstract]

Schedule of accounts receivable net

	September 30		December 31
	2020		2019
	(Unaudited)
Accounts receivable	$	5,723,965	$	7,308,224
Less: allowance for doubtful debts		2,790,343		2,724,389
	$	2,933,622	$	4,583,835

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Inventories (Tables)

9 Months Ended

Sep. 30, 2020

Inventory Disclosure [Abstract]

Schedule of inventories

	September 30		December 31
	2020		2019
	(Unaudited)
Western pharmaceuticals	$	755,730	$	554,414
Chinese herbal medicine		32,153		37,621
Medical consumables		629,942		475,916
Other material		7,857		4,790
	$	1,425,682	$	1,072,741

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Prepayment (Tables)

9 Months Ended

Sep. 30, 2020

Prepaid Expense, Current [Abstract]

Schedule of prepayment

	September 30		December 31
	2020		2019
	(Unaudited)
Deposits on medical equipment	$	517,329	$	744,569
Heating fees		-		175,736
Others		266,768		381,046
	$	784,097	$	1,301,351

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Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2020

Property, Plant and Equipment [Abstract]

Schedule of property and equipment

	September 30,			December 31,
	2020			2019
	(Unaudited)
Transportation equipment	$	1,213,581		$	1,184,896
Medical equipment		22,541,264			17,291,984
Electrical equipment		2,197,208			1,842,552
Office equipment and others		1,102,580			964,669
Buildings		24,274,045			23,700,288
Software		189,522			185,043
Total fixed assets at cost		51,518,200			45,169,432
Accumulated depreciation		(9,050,875	)		(7,021,013	)
Total fixed assets before reclassification	$	42,467,325		$	38,148,419
Reclass to Right-of-use assets		(13,803,342	)		(15,309,797	)
Total fixed assets, net		28,663,983			22,838,622

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Right-of-Use Assets and Lease Liabilities (Tables)

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Schedule of unaudited condensed consolidated balance sheet

	September 30, 2020		December 31, 2019
	(Unaudited)
Assets
Operating lease assets	$	255,646	$	331,693
Finance lease assets		13,803,342		15,309,796
Total	$	14,058,988	$	15,641,489
Liabilities
Current
Operating lease liabilities		117,681		111,414
Finance lease liabilities		1,635,519		2,569,007
Long-term
Operating lease liabilities		137,965		220,279
Finance lease liabilities		12,253,566		13,075,654
Total	$	14,144,731	$	15,976,354

Schedule of future minimum lease payments for annual capital lease obligation

Year	Amounts
2020	$	1,263,151
2021		2,155,864
2022		1,134,231
Thereafter		9,335,839
Total	$	13,889,085

Schedule of future annual minimum lease payments, for non-cancellable operating leases

Year ending December 31	Amount $
2020		30,034
2021		124,992
2022		100,620
		255,646

Schedule of right-of-use assets

	September 30, 2020 (Unaudited)									December 31, 2019
	Operating lease			Finance lease			Total			Operating lease			Finance lease			Total
Lease assets	$	337,410		$	14,619,851		$	14,957,261		$	432,892		$	16,390,259		$	16,823,151
Accumulated amortization		(81,764	)		(816,509	)		(898,273	)		(101,199	)		(1,080,463	)		(1,181,662	)
Total right-of-use assets, net	$	255,646		$	13,803,342		$	14,058,988		$	331,693		$	15,309,796		$	15,641,489

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Revenue (Tables)

9 Months Ended

Sep. 30, 2020

Revenue [Abstract]

Schedule of revenue

	Three Months Ended September 30,
	2020		2019
	(Unaudited)		(Unaudited)
Pharmaceuticals:
Western pharmaceuticals	$	1,869,252	$	1,989,732
Chinese medicine		235,613		296,327
Herbal medicine		358,086		257,971
Total pharmaceuticals	$	2,462,951	$	2,544,030
Patient services:
Medical consulting	$	3,509,366	$	2,732,914
Medical treatment		3,496,691		2,215,895
Others		547,077		270,361
Total patient services	$	7,553,134	$	5,219,170
	$	10,016,085	$	7,763,200

	Nine Months Ended September 30,
	2020		2019
	(Unaudited)		(Unaudited)
Pharmaceuticals:
Western pharmaceuticals	$	4,682,550	$	6,229,016
Chinese medicine		558,715		989,317
Herbal medicine		812,883		728,587
Total pharmaceuticals	$	6,054,148	$	7,946,920
Patient services:
Medical consulting	$	7,607,046	$	7,197,523
Medical treatment		8,586,527		7,078,626
Others		772,734		683,904
Total patient services	$	16,966,307	$	14,960,053
	$	23,020,455	$	22,906,973

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Related Party Transactions (Tables)

9 Months Ended

Sep. 30, 2020

Related Party Transactions [Abstract]

Schedule of due to related parties

	September 30,		December 31,
Name of related parties	2020		2019
	(Unaudited)
Harbin Jiarun Pharmacy Co., Ltd	$	22,876	$	-
Heilongjiang Province Runjia Medical Equipment Co., Ltd		2,132		4,306
Harbin Baiyi Real Estate Development Co., Ltd,		-		1,043,131
Junsheng Zhang		413,238		747,103
	$	438,246	$	1,794,540

Schedule of purchases from related party transactions

	For nine months ended September 30,
Name of related parties	2020		2019
Harbin Jiarun Pharmacy Co., Ltd	$	22,876	$	69,583
Heilongjiang Province Runjia Medical Equipment Co., Ltd		2,278		7,201
	$	25,.154	$	76,784

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Basic and Diluted Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Schedule of basic and diluted earnings per share

	Nine Months Ended September 30,
	2020		2019
	(Unaudited)		(Unaudited)
Numerator:
Net income available to common stockholders	$	1,212,681	$	1,798,663
Denominator:
Basic weighted-average number of shares outstanding		18,021,848		16,380,863
Diluted weighted-average number of shares outstanding		18,059,240		16,398,532
Net income per share:
Basic EPS	$	0.0673	$	0.1098
Diluted EPS	$	0.0672	$	0.1097

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Description of Business and Organization (Details)		9 Months Ended
	Jun. 01, 2013	Sep. 30, 2020	Dec. 31, 2013	Feb. 25, 2013
JRSIS Health Care Limited [Member]
Description of Business and Organization (Textual)
Interest, Ownership Percentage			30.00%
Equity, ownership percentage			100.00%
Runteng Medical Group Co., Ltd [Member]
Description of Business and Organization (Textual)
Equity, ownership percentage				100.00%
Harbin Jiarun Hospital Co., Ltd [Member]
Description of Business and Organization (Textual)
Joint venture investment in Jiarun		70.00%
Noncontrolling Interest, Ownership Percentage		30.00%
Total shareholders’ equity percentage		100.00%
Supplemental agreement, description	The supplemental agreement signed between Junsheng Zhang and Runteng on June 1, 2013, the comprehensive income from Jiarun would be attributable to retained earnings and non-controlling interest for 70% and 30% respectively, from July 1, 2013.
Junsheng Zhang [Member]
Description of Business and Organization (Textual)
Noncontrolling Interest, Ownership Percentage		30.00%

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Summaries of Significant Accounting Policies (Details)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
HKD [Member] | Assets And Liabilities [Member]
Foreign currency translation	7.7501	7.8399
Description of foreign currency translation	period end exchange rate	period end exchange rate
RMB [Member] | Assets And Liabilities [Member]
Foreign currency translation	6.8033	7.1383
Description of foreign currency translation	period end exchange rate	period end exchange rate
Revenue And Expenses [Member] | HKD [Member]
Foreign currency translation	7.7576	7.8384
Description of foreign currency translation	period average	period average
Revenue And Expenses [Member] | RMB [Member]
Foreign currency translation	6.9957	6.8633
Description of foreign currency translation	period average	period average

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Summaries of Significant Accounting Policies (Details 1)	9 Months Ended
	Sep. 30, 2020
Minimum [Member] | Buildings and improvement [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives for property and equipment	10 years
Minimum [Member] | Medical equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives for property and equipment	5 years
Minimum [Member] | Transportation instrument [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives for property and equipment	5 years
Minimum [Member] | Office equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives for property and equipment	5 years
Minimum [Member] | Electronic equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives for property and equipment	5 years
Minimum [Member] | Software [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives for property and equipment	5 years
Maximum [Member] | Buildings and improvement [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives for property and equipment	40 years
Maximum [Member] | Medical equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives for property and equipment	15 years
Maximum [Member] | Transportation instrument [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives for property and equipment	10 years
Maximum [Member] | Office equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives for property and equipment	10 years
Maximum [Member] | Electronic equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives for property and equipment	10 years
Maximum [Member] | Software [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives for property and equipment	10 years

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Summaries of Significant Accounting Policies (Details 2) - Recurring [Member]	Sep. 30, 2020 USD ($)
Warrant liability [Member]
Carrying Value	$ 42,818
Level 1 [Member] | Warrant liability [Member]
Carrying Value
Level 2 [Member] | Warrant liability [Member]
Carrying Value	42,818
Level 3 [Member] | Warrant liability [Member]
Carrying Value
Convertible Note [Member]
Carrying Value
Convertible Note [Member] | Level 1 [Member]
Carrying Value
Convertible Note [Member] | Level 2 [Member]
Carrying Value
Convertible Note [Member] | Level 3 [Member]
Carrying Value

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Summaries of Significant Accounting Policies (Details 3)	9 Months Ended
	Sep. 30, 2020 USD ($)
Accounting Policies [Abstract]
Balance at January 1, 2020	$ 110,840
Change in fair value of warrant liability	181,136
Exercise in January, 2020	(249,158)
Balance at September 30, 2020	$ 42,818

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Summaries of Significant Accounting Policies (Details 4) - Warrants [Member] - Auctus [Member]	9 Months Ended
	Sep. 30, 2020 $ / shares
Market price per share (USD/share)	$ 0.56
Exercise price (USD/share)	$ 0.60
Risk free rate	0.241%
Dividend yield
Expected term/Contractual life (years)	1 year 9 months 29 days
Expected volatility	74.08%

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Summaries of Significant Accounting Policies (Details 5)	9 Months Ended
	Sep. 30, 2020 USD ($)
Accounting Policies [Abstract]
Balance at January 1, 2020	$ 774,567
Change in fair value of convertible notes	(332,363)
Paid in February, 2020	(202,204)
Paid in April, 2020	(250,000)
Balance at September 30, 2020

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Summaries of Significant Accounting Policies (Details Textual)	9 Months Ended		12 Months Ended
	Sep. 30, 2020 Customers Segment	Sep. 30, 2019	Dec. 31, 2019 Customers
Summaries of Significant Accounting Policies (Textual)
Number of segment | Segment	1
Accounts Receivable [Member]
Summaries of Significant Accounting Policies (Textual)
Concentration Risk, Percentage	5.00%		5.00%
Number of customers | Customers	3		3
Sales Revenue, Net [Member]
Summaries of Significant Accounting Policies (Textual)
Concentration Risk, Percentage	10.00%	10.00%
People's Republic of China [Member]
Summaries of Significant Accounting Policies (Textual)
Effective income tax rate reconciliation, foreign income tax rate differential, percent	25.00%

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Accounts Receivable, Net (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Receivables, Net, Current [Abstract]
Accounts receivable	$ 5,723,965	$ 7,308,224
Less: allowance for doubtful debts	2,790,343	2,724,389
Accounts receivable, net	$ 2,933,622	$ 4,583,835

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Accounts Receivable, Net (Details Textual) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Accounts Receivable, Net (Textual)
Bad debts
Exceeded unreimbursed insurance claim			2 years		2 years

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Inventories (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Inventory [Line Items]
Total inventories	$ 1,425,682	$ 1,072,741
Western pharmaceuticals [Member]
Inventory [Line Items]
Total inventories	755,730	554,414
Chinese herbal medicine [Member]
Inventory [Line Items]
Total inventories	32,153	37,621
Medical consumables [Member]
Inventory [Line Items]
Total inventories	629,942	475,916
Other material [Member]
Inventory [Line Items]
Total inventories	$ 7,857	$ 4,790

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Prepayment (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Schedule Of Prepaid Expenses Current [Line Items]
Total prepayment	$ 784,097	$ 1,301,351
Deposits on medical equipment [Member]
Schedule Of Prepaid Expenses Current [Line Items]
Total prepayment	517,329	744,569
Heating fees [Member]
Schedule Of Prepaid Expenses Current [Line Items]
Total prepayment		175,736
Others [Member]
Schedule Of Prepaid Expenses Current [Line Items]
Total prepayment	$ 266,768	$ 381,046

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Property and Equipment (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Total fixed assets at cost	$ 51,518,200	$ 45,169,432
Accumulated depreciation	$ (9,050,875)	$ (7,021,013)
Total fixed assets before reclassification	42,467,325	38,148,419
Reclass to Right-of-use assets	$ (13,803,342)	$ (15,309,797)
Total fixed assets, net	28,663,983	22,838,622
Transportation equipment [Member]
Property, Plant and Equipment [Line Items]
Total fixed assets at cost	1,213,581	1,184,896
Medical equipment [Member]
Property, Plant and Equipment [Line Items]
Total fixed assets at cost	22,541,264	17,291,984
Electrical equipment [Member]
Property, Plant and Equipment [Line Items]
Total fixed assets at cost	2,197,208	1,842,552
Office equipment and others [Member]
Property, Plant and Equipment [Line Items]
Total fixed assets at cost	1,102,580	964,669
Buildings [Member]
Property, Plant and Equipment [Line Items]
Total fixed assets at cost	24,274,045	23,700,288
Software [Member]
Property, Plant and Equipment [Line Items]
Total fixed assets at cost	$ 189,522	$ 185,043

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Property and Equipment (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Property and Equipment (Textual)
Depreciation expense	$ 649,726	$ 551,810	$ 1,808,738	$ 1,644,389

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Long Term Deferred Expenses (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2018	Dec. 31, 2019
Deferred expenses	$ 435,881		$ 435,881			$ 257,203
Long-term deferred expenses	2,519,141		2,519,141			$ 2,978,936
Consulting fees	5,102	$ 16,049	32,869	$ 55,169
Decoration fees	$ 106,715	$ 49,303	$ 316,705	$ 169,477
Hair Finance Leasing (China) Co., Ltd. [Member]
Decoration fees					$ 1,600,000
Lease agreements, description			On May 7, 2015, July 3, 2015 and October 16, 2015, Jiarun entered into three lease agreements to lease medical equipment from Hair Finance Leasing (China) Co., Ltd. ("Hair"), a third party, for a five-year period, in which Jiarun is required to pay a consulting fee to Hair for the services provided over the five years.

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Right-of-Use Assets and Lease Liabilities (Details) - Right-of-Use Assets and Lease Liabilities [Member] - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Assets
Operating lease assets	$ 255,646	$ 331,693
Finance lease assets	13,803,342	15,309,796
Total	14,058,988	15,641,489
Current
Operating lease liabilities	117,681	111,414
Finance lease liabilities	1,635,519	2,569,007
Long-term
Operating lease liabilities	137,965	220,279
Finance lease liabilities	12,253,566	13,075,654
Total	$ 14,144,731	$ 15,976,354

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Right-of-Use Assets and Lease Liabilities (Details 1)	Sep. 30, 2020 USD ($)
Year
2020	$ 1,263,151
2021	2,155,864
2022	1,134,231
Thereafter	9,335,839
Total	$ 13,889,085

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Right-of-Use Assets and Lease Liabilities (Details 2)	Sep. 30, 2020 USD ($)
Year ending December 31
2020	$ 30,034
2021	124,992
2022	100,620
Total	$ 255,646

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Right-of-Use Assets and Lease Liabilities (Details 3) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Schedule Of Capital Lease Obligations and Deposit for Capital Leases [Line Items]
Lease assets	$ 14,957,261	$ 16,823,151
Accumulated amortization	(898,273)	(1,181,662)
Total right-of-use assets, net	14,058,988	15,641,489
Operating lease [Member]
Schedule Of Capital Lease Obligations and Deposit for Capital Leases [Line Items]
Lease assets	337,410	432,892
Accumulated amortization	(81,764)	(101,199)
Total right-of-use assets, net	255,646	331,693
Finance lease [Member]
Schedule Of Capital Lease Obligations and Deposit for Capital Leases [Line Items]
Lease assets	14,619,851	16,390,259
Accumulated amortization	(816,509)	(1,080,463)
Total right-of-use assets, net	$ 13,803,342	$ 15,309,796

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Right-of-Use Assets and Lease Liabilities (Details Textual)	1 Months Ended			3 Months Ended		9 Months Ended
	Dec. 31, 2017 USD ($)	Aug. 31, 2017 USD ($)	Jun. 05, 2013 CNY (¥)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Mar. 25, 2019 USD ($)
Right-of-Use Assets and Lease Liabilities (Textual)
Finance interest lease fees				$ 275,126	$ 231,063	$ 816,509	$ 812,057
Additional net lease assets				14,060,000		14,060,000
Additional net lease liabilities				14,140,000		14,140,000
Operating lease expense				27,900	24,112	81,764	80,864
Finance lease amortization expense				275,126	391,314	816,509	929,538
Depreciation and amortization				649,726		1,808,738
General property and equipment depreciation				374,600		992,229
Operating lease expense included amortization expense				73,174	24,112	159,782	80,864
Operating lease amortization expense				$ 27,900	$ 24,573	$ 81,764	$ 75,003
Non-Cancellable Operating Lease Agreements [Member]
Right-of-Use Assets and Lease Liabilities (Textual)
Lease payments	$ 68,128	$ 36,881
Lease payment term	5 years	5 years
Harbin Baiyi Real Estate Development Co., Ltd [Member]
Right-of-Use Assets and Lease Liabilities (Textual)
Lease agreement annual payments | ¥			¥ 7,000,000
Leasing agreement deposit | ¥			¥ 3,000,000
Term of capital lease			30 years
Capital lease obligation interest rate percentage			6.55%
Description of leasing agreement						The leasing agreement for our hospital building contains the following provisions: ● Rental payments of RMB7,000,000 (equivalent to $1,004,593) per year, payable at the beginning of September. ● An option allowing the lessor to extend the lease for thirty years beyond the last renewal option exercised by the Company. ● A guarantee by the Company that the lessor will realize $nil from selling the asset at the expiration of the lease This lease is a capital lease because its term (30 years) exceeds 75% of the building's estimated economic life. In addition, the present value ($15,185,032) of the minimum lease payments exceeds 90% of the fair value of the building ($15,721,295). ● Accumulated annual amounts resulting from applying an interest rate of 6.55% to the balance of the lease obligation at the beginning of each year. The lease obligation is increased by the amount of the prior year's interest, the amount of the net rental payment at the beginning of each year; and this amount represents the guaranteed residual value at the end of the lease term.
Haitong Hengxin International Leasing Company Limited [Member] | Sale and Leaseback Agreement [Member]
Right-of-Use Assets and Lease Liabilities (Textual)
Net value of financing								$ 2,609,047

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Derivative Financial Instruments (Details) - Warrant liabilities [Member] - USD ($)	1 Months Ended	3 Months Ended	9 Months Ended
	Jan. 31, 2020	Sep. 30, 2020	Sep. 30, 2020
Derivative Financial Instruments (Textual)
Market fair value		$ 42,818	$ 42,818
Loss from issuance expense and change in fair value debt derivatives		$ (263,953)	$ 181,136
Description of embedded derivative			The fair value of the warrant liability was determined using Binomial Option Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 70.08%, (3) weighted average risk-free interest rate of 0.241%, (4) expected life of 1.83 years, and (5) the quoted market price of the Company’s common stock at each valuation date.
Labrys Fund, LP [Member]
Derivative Financial Instruments (Textual)
Common stock purchase warrant	38,322		28,200
Auctus Fund LLC [Member]
Derivative Financial Instruments (Textual)
Common stock purchase warrant			21,000

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Non-controlling Interests (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Non-controlling Interests (Textual)
Comprehensive income attributable to non-controlling interests	$ 565,116	$ 74,257	$ 716,916	$ 808,118
Comprehensive income attributable to the company	1,414,844	$ (211,130)	1,574,442	$ 1,085,897
Stockholders' equity attributable to noncontrolling interest	$ 8,885,529		$ 8,885,529		$ 8,168,613
Jiarun [Member]
Non-controlling Interests (Textual)
Ownership percentage by parent, runteng medical group co., ltd	70.00%		70.00%		70.00%
Junsheng Zhang [Member]
Non-controlling Interests (Textual)
Noncontrolling interest, ownership percentage by parent	30.00%		30.00%

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Revenue (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Product Information [Line Items]
Revenue	$ 10,016,085	$ 7,763,200	$ 23,020,455	$ 22,906,973
Pharmaceuticals [Member]
Product Information [Line Items]
Revenue	2,462,951	2,544,030	6,054,148	7,946,920
Pharmaceuticals [Member] | Western pharmaceuticals [Member]
Product Information [Line Items]
Revenue	1,869,252	1,989,732	4,682,550	6,229,016
Pharmaceuticals [Member] | Chinese medicine [Member]
Product Information [Line Items]
Revenue	235,613	296,327	558,715	989,317
Pharmaceuticals [Member] | Herbal medicine [Member]
Product Information [Line Items]
Revenue	358,086	257,971	812,883	728,587
Patient services [Member]
Product Information [Line Items]
Revenue	7,553,134	5,219,170	16,966,307	14,960,053
Patient services [Member] | Medical consulting [Member]
Product Information [Line Items]
Revenue	3,509,366	2,732,914	7,607,046	7,197,523
Patient services [Member] | Medical treatment [Member]
Product Information [Line Items]
Revenue	3,496,691	2,215,895	8,586,527	7,078,626
Patient services [Member] | Others [Member]
Product Information [Line Items]
Revenue	$ 547,077	$ 270,361	$ 772,734	$ 683,904

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Income Tax Expense (Details)	9 Months Ended
	Sep. 30, 2020 CNY (¥)
Depreciation of tax description	Depreciation for tax purposes is not required. Basis differences between tax and GAAP for depreciation of property and equipment exist because in 2020 the Company purchased Eligible Equipment for RMB 35.8 million, with $1.1 million deferred income tax, creating differences between the tax treatment mandated by the Chinese government and GAAP tax treatment.
Tax deduction rate	100.00%
RMB [Member]
Purchase of equipment	¥ 5,000,000
United States [Member]
Effective income tax statutory tax rate , percent	21.00%
Hong Kong [Member]
Effective income tax statutory tax rate , percent	16.50%
PRC [Member]
Effective income tax statutory tax rate , percent	25.00%

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Related Party Transactions (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Related Party Transaction [Line Items]
Amount due to related parties	$ 438,246	$ 1,794,540
Junsheng Zhang [Member]
Related Party Transaction [Line Items]
Amount due to related parties	413,238	747,103
Harbin Jiarun Pharmacy Co., Ltd [Member]
Related Party Transaction [Line Items]
Amount due to related parties	22,876
Heilongjiang Province Runjia Medical Equipment Co., Ltd [Member]
Related Party Transaction [Line Items]
Amount due to related parties	2,132	4,306
Harbin Baiyi Real Estate Development Co., Ltd, [Member]
Related Party Transaction [Line Items]
Amount due to related parties		$ 1,043,131

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Related Party Transactions (Details 1) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Related Party Transaction [Line Items]
Related party transaction, purchases from related party	$ 25,154	$ 76,784
Harbin Jiarun Pharmacy Co., Ltd [Member]
Related Party Transaction [Line Items]
Related party transaction, purchases from related party	22,876	69,583
Heilongjiang Province Runjia Medical Equipment Co., Ltd [Member]
Related Party Transaction [Line Items]
Related party transaction, purchases from related party	$ 2,278	$ 7,201

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Related Party Transactions (Details Textual) - Harbin Baiyi Real Estate Development Co., Ltd [Member] - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Related Party Transactions (Textual)
Deposits for capital leases	$ 440,963	$ 447,021
Capital lease obligations	11,541,555	13,148,213
Due from related parties

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Basic and Diluted Earnings Per Share (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Numerator:
Net income available to common stockholders	$ 765,941	$ 475,333	$ 1,212,681	$ 1,798,663
Denominator:
Basic weighted-average number of shares outstanding	18,042,109	18,013,200	18,021,848	16,380,863
Diluted weighted-average number of shares outstanding	18,063,109	18,055,867	18,059,240	16,398,532
Net income per share:
Basic EPS	$ 0.0425	$ 0.0264	$ 0.0673	$ 0.1098
Diluted EPS	$ 0.0424	$ 0.0263	$ 0.0672	$ 0.1097

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Common Stock (Details) - shares		3 Months Ended	9 Months Ended
	Aug. 04, 2020	Mar. 31, 2020	Sep. 30, 2020
Auctus Fund, LLC [Member]
Common Stock (Textual)
Common stock, description			On February 27, 2020, Auctus Fund, LLC converted into 2,000 shares of the Company's common stock with $2,400 in accrued interest and fees arising under the Promissory Note it had purchase from the Company in July 2019.
Labrys Fund, LP [Member]
Common Stock (Textual)
Issuance of shares		38,332
StockVest [Member]
Common Stock (Textual)
Shares issued for advertising, promotional and marketing services	40,000

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Going Concern (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Going Concern (Textual)
Retained earnings	$ (5,575,971)	$ (6,788,652)
Working capital	$ 2,950,924