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2016
Biostar Pharmaceuticals, Inc. Announces Its Quarterly Results for Three Months Ended March 31, 2016
 

Biostar Pharmaceuticals, Inc. Announces Its Quarterly Results for

Three Months Ended March 31, 2016

XIANYANG, China, May 23, 2016 /PRNewswire/ - Biostar Pharmaceuticals, Inc. (NASDAQ: BSPM) ("Biostar" or "the Company"), a PRC-based manufacturer and marketer of pharmaceutical and health supplement products in China for a variety of diseases and conditions, today announced its financial results for the first quarter ended March 31, 2016.

During the fiscal first quarter of 2016, the Company recognized:

?         Net sales of $0.8 million, a decrease of approximately $6.1 million, or 88.4% as compared to the same period in 2015.

?         Gross profit decreased by approximately $3.2 million, or 90.4% for the three months ended March 31, 2016 as compared to the same period in 2015.

?         Sales of Shaanxi Weinan Products increased by approximately $0.4 million, or 88.0% as compared to the same period in 2015.

?         Net loss of $0.6 million as compared to net loss of $0.2 million for the first quarter 2015.

The sales of Shaanxi Weinan¡¯s products increased during the three months ended March 31, 2016 as compared to the same period in 2015. After Shaanxi Weinan received the renewed GMP certificate in June 2015, the sales volume has been slowly climbing back to the anticipated volume. There were no sales for Aoxing Pharmaceutical Products and hospital products as the Company has temporarily stopped production for the maintenance of its production lines in order to renew its GMP certificates, which is expected to be completed by the second quarter of 2016. Net sales and related gross profit both decreased significantly as result of these maintenance efforts. In anticipation of reduced sales volume as result of decreased production capacity, the Company temporarily suspended all advertising and research activities during the three months ended March 31, 2016.

*The Company¡¯s Condensed Consolidated Balance Sheets, Statement of Operations, and Cash Flows can be found at the end of this press release. Please also refer the Company¡¯s Quarterly Report on Form 10-Q filed with the U.S. Securities and Exchange Commission for further information regarding the Company¡¯s results of operations.

About Biostar Pharmaceuticals, Inc.

         Biostar Pharmaceuticals, Inc., through its wholly owned subsidiary and controlled affiliate in China, develops, manufactures, and markets pharmaceutical and health supplement products for a variety of diseases and conditions. The Company¡¯s most popular product is its XinAoxingOleanolic Acid Capsule, an over-the-counter ("OTC") medicine for chronic hepatitis B, a disease affecting approximately 10% of the Chinese population. For more information please visit: http://www.biostarpharmaceuticals.com.

Safe Harbor Relating to the Forward-Looking Statements

Certain statements in this release concerning our future growth prospects are forward-looking statements, within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The company uses words and phrases such as "guidance," "forecasted," "projects," "is expected," "remain confident," "will" and similar expressions to identify forward-looking statements in this press release, including forward-looking statements. Undue reliance should not be placed on forward-looking information. Forward-looking information is based on current expectations, estimates and projections that involve a number of risks, which could cause actual results to vary and in some instances to differ materially from those anticipated by Biostar and described in the forward-looking information contained in this news release. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding the Company¡¯s ability to complete the certification renewal process in the time frame currently anticipated, its ability to sustain its sales effort going forward, its ability promptly and effectively to return to the normal production levels, its ability to retain existing and retain new customers for its products, its ability to achieve the projected sales through the efforts of the call center, to complete the contemplated clinical trials and capitalize on such opportunities, the Company¡¯s ability to recover its sales and revenue following the repair and maintenance for GMP certification renewal, the state of consumer confidence and market demand or the Company¡¯s products, success of our investments, risks and uncertainties regarding fluctuations in earnings, our ability to sustain our previous levels of profitability including on account of our ability to manage growth, intense competition, wage increases in China, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, our ability to successfully complete and integrate potential acquisitions, withdrawal of governmental fiscal incentives, political instability and regional conflicts and legal restrictions on raising capital or acquiring companies outside China. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our most recent Annual Report on Form 10-K for the year ended December 31, 2015, and other subsequent filings. These filings are available at www.sec.gov. We may, from time to time, make additional written and oral forward-looking statements, including statements contained in our filings with the Securities and Exchange Commission and our reports to shareholders. We do not undertake to update any forward-looking statements that may be made from time to time by or on our behalf.

Investor Relations Contact

Please send questions or comments to:

Biostar Pharmaceuticals, Inc.

Investor Relations Coordinator

+86-29-3368-6638

office@aoxing-group.com

http://www.biostarpharmaceuticals.com


BIOSTAR PHARMACEUTICALS, INC

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

March 31,

 

 

December 31,

 

 

 

 

2016

 

 

2015

 

 

 

 

(Unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

91,482

 

 

$

38,898

 

Accounts receivable, net

 

 

14,712,467

 

 

 

15,814,880

 

Inventories

 

 

293,441

 

 

 

234,660

 

Deposits and other receivables

 

 

2,608

 

 

 

2,591

 

Income tax recoverable

 

 

135,838

 

 

 

76,280

 

Loan receivables, net

 

 

-

 

 

 

-

 

Total Current Assets

 

 

15,235,836

 

 

 

16,167,309

 

 

 

 

 

 

 

 

 

 

Non-current Assets

 

 

 

 

 

 

 

 

Deposits

 

 

16,206,827

 

 

 

16,099,958

 

Deferred tax assets, net

 

 

5,442,481

 

 

 

5,406,593

 

Property and equipment, net

 

 

6,749,372

 

 

 

6,810,933

 

Intangible assets, net

 

 

6,740,676

 

 

 

6,878,787

 

Total Non-Current Assets

 

 

35,139,356

 

 

 

35,196,271

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

50,375,192

 

 

$

51,363,580

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS¡¯ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Accounts and other payables

 

$

3,844,762

 

 

$

4,153,411

 

Short-term bank loans

 

 

2,504,866

 

 

 

2,773,199

 

Value-added tax payable

 

 

40,500

 

 

 

112,629

 

Warrants liability

 

 

31,011

 

 

 

59,202

 

Total Current Liabilities

 

 

6,421,139

 

 

 

7,098,441

 

 

 

 

 

 

 

 

 

 

Commitment and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders¡¯ Equity

 

 

 

 

 

 

 

 

Common stock, $0.001 par value, 100,000,000 shares authorized,

   2,210,913 shares issued and outstanding as of

   March 31, 2016 and December 31, 2015

 

 

2,210

 

 

 

2,210

 

Additional paid-in capital

 

 

30,316,774

 

 

 

30,316,774

 

Statutory reserve

 

 

7,354,413

 

 

 

7,354,413

 

Retained earnings

 

 

2,537,053

 

 

 

3,157,394

 

Accumulated other comprehensive income

 

 

3,743,603

 

 

 

3,434,348

 

Total Stockholders¡¯ Equity

 

 

43,954,053

 

 

 

44,265,139

 

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders¡¯ Equity

 

$

50,375,192

 

 

$

51,363,580

 

 


BIOSTAR PHARMACEUTICALS, INC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

 

2016

 

 

2015

 

 

 

 

 

 

 

 

Sales

 

$

801,627

 

 

$

6,908,747

 

Cost of sales

 

 

456,657

 

 

 

3,327,497

 

Gross profit

 

 

344,970

 

 

 

3,581,250

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Advertising expenses

 

 

-

 

 

 

1,377,164

 

Selling expenses

 

 

323,066

 

 

 

1,299,717

 

General and administrative expenses

 

 

690,422

 

 

 

775,755

 

Research and development expenses

 

 

-

 

 

 

1,018,612

 

Total operating expenses

 

 

1,013,488

 

 

 

4,471,248

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(668,518

)

 

 

(889,998

)

 

 

 

 

 

 

 

 

 

Other (expense) income

 

 

 

 

 

 

 

 

Interest income

 

 

-

 

 

 

322,345

 

Interest expense

 

 

(38,239

)

 

 

(61,455

)

Fair value adjustment on warrants

 

 

28,191

 

 

 

(9,867

)

 Total other (expense) income, net

 

 

(10,048

)

 

 

251,023

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

 

(678,566

)

 

 

(638,975

)

 

 

 

 

 

 

 

 

 

Income tax benefit

 

 

58,225

 

 

 

478,871

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(620,341

)

 

$

(160,104

)

 

 

 

 

 

 

 

 

 

Other comprehensive income - foreign currency translation adjustment

 

 

309,255

 

 

 

381,065

 

 

 

 

 

 

 

 

 

 

Comprehensive (loss) income

 

$

(311,086

)

 

$

220,961

 

 

 

 

 

 

 

 

 

 

Net loss per share

 

 

 

 

 

 

 

 

Basic

 

$

(0.28

)

 

$

(0.07

)

Diluted

 

$

(0.28

)

 

$

(0.07

)

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding

 

 

 

 

 

 

 

 

Basic

 

 

2,210,913

 

 

 

2,210,913

 

Diluted

 

 

2,210,913

 

 

 

2,210,913

 


BIOSTAR PHARMACEUTICALS, INC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

2016

 

 

2015

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net loss

 

$

(620,341

)

 

$

(160,104

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Accrued interest income

 

 

-

 

 

 

(317,807

)

Deferred tax benefit

 

 

(58,225

)

 

 

(478,871

)

Depreciation and amortization

 

 

316,877

 

 

 

487,437

 

Recognition of deferred research and development expenses

 

 

-

 

 

 

1,018,612

 

Warrants liability

 

 

(28,191

)

 

 

9,867

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

1,190,484

 

 

 

2,468,538

 

Inventories

 

 

(56,422

)

 

 

280,628

 

Deposits and other receivables

 

 

-

 

 

 

90,837

 

Accounts payable and accrued expenses

 

 

(329,503

)

 

 

(320,825

)

Value-added tax payable

 

 

(71,857

)

 

 

(243,286

)

Net cash provided by operating activities

 

 

342,822

 

 

 

2,835,026

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Deposit paid for intended acquisition

 

 

-

 

 

 

(1,629,779

)

Purchase of property, plant and equipment

 

 

-

 

 

 

(30,646

)

Net cash used in investing activities

 

 

-

 

 

 

(1,660,425

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Repayment of short-term bank loans

 

 

(282,725

)

 

 

(162,978

)

Net cash used in financing activities

 

 

(282,725

)

 

 

(162,978

)

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(7,513

)

 

 

12,614

 

 

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

 

52,584

 

 

 

1,024,237

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents, beginning balance

 

 

38,898

 

 

 

1,685,154

 

Cash and cash equivalents, ending balance

 

$

91,482

 

 

$

2,709,391

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES:

 

 

 

 

 

 

 

 

Interest received

 

$

-

 

 

$

4,538

 

Interest paid

 

$

(38,239

)

 

$

(61,455

)

 

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