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21
Nov
2016
Biostar Pharmaceuticals, Inc. Announces Its Quarterly Results for Three Months Ended September 30, 2016

XIANYANG, China, Nov 21, 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 third quarter ended September 30, 2016.

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

?         Net sales of $0.6 million, a decrease of approximately $3.6 million, or 84.7% as compared to the same period in 2015.

?         Gross profit decreased by approximately $0.5 million, or 62.3% for the three months ended September 30, 2016 as compared to the same period in 2015.

?         Sales of Shaanxi Weinan Products decreased by approximately $0.6 million, or 50.2% as compared to the same period in 2015.

?         Sales and Production of Aoxing Pharmaceutical Products remained suspended as the Company still has work to complete in order to gain renewal of its GMP certificates.

?         The Company recorded a provision for doubtful accounts in the amount of $1.5 million during the third quarter.  Our results of operations were materially affected by this provision.

?         Net loss was $1.6 million as compared to a net loss of $1.2 million for the third quarter 2015.

The Company¡¯s sales for the three months ended September 30, 2016 was primarily derived from products manufactured by its subsidiary Shaanxi Weinan.  Aoxing¡¯s manufacturing operations remained suspended as it still awaits the renewal of its GMP Certificates.  The Company intends to complete the renewal  GMP renewal certification process by year end. 

*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

 

 

 

September 30,

 

 

December 31,

 

 

 

2016

 

 

2015

 

 

 

(Unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

659,359

 

 

$

38,898

 

Accounts receivable, net

 

 

6,094,197

 

 

 

15,814,880

 

Inventories

 

 

439,596

 

 

 

234,660

 

Deposits and other receivables

 

 

2,525

 

 

 

2,591

 

Income tax recoverable

 

 

74,253

 

 

 

76,280

 

Loan receivables, net

 

 

-

 

 

 

-

 

Value-added tax recoverable

 

 

22,559

 

 

 

-

 

Total Current Assets

 

 

7,292,489

 

 

 

16,167,309

 

 

 

 

 

 

 

 

 

 

Non-current Assets

 

 

 

 

 

 

 

 

Deposits

 

 

15,672,054

 

 

 

16,099,958

 

Deferred tax assets, net

 

 

5,262,895

 

 

 

5,406,593

 

Property and equipment, net

 

 

6,270,436

 

 

 

6,810,933

 

Intangible assets, net

 

 

6,061,546

 

 

 

6,878,787

 

Total Non-Current Assets

 

 

33,266,931

 

 

 

35,196,271

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

40,559,420

 

 

$

51,363,580

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS¡¯ EQUITY

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Accounts and other payables

 

$

4,097,856

 

 

$

4,153,411

 

Short-term bank loans

 

 

2,422,213

 

 

 

2,773,199

 

Value-added tax payable

 

 

-

 

 

 

112,629

 

Warrants liability

 

 

12,703

 

 

 

59,202

 

Total Current Liabilities

 

 

6,532,772

 

 

 

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

   September 30, 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

 

 

(5,929,066

)

 

 

3,157,394

 

Accumulated other comprehensive income

 

 

2,282,317

 

 

 

3,434,348

 

Total Stockholders¡¯ Equity

 

 

34,026,648

 

 

 

44,265,139

 

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders¡¯ Equity

 

$

40,559,420

 

 

$

51,363,580

 

 

  

BIOSTAR PHARMACEUTICALS, INC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME

(Unaudited)

 

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales, net

 

$

644,933

 

 

$

4,206,550

 

 

$

2,066,698

 

 

$

25,291,531

 

Cost of sales

 

 

336,870

 

 

 

3,390,439

 

 

 

1,114,777

 

 

 

14,955,491

 

Gross profit

 

 

308,063

 

 

 

816,111

 

 

 

951,921

 

 

 

10,336,040

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advertising expenses

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,838,912

 

Selling expenses

 

 

290,924

 

 

 

835,412

 

 

 

904,037

 

 

 

4,445,443

 

General and administrative expenses

 

 

488,136

 

 

 

682,972

 

 

 

1,717,992

 

 

 

2,672,351

 

Provision for doubtful debt

 

 

1,491,002

 

 

 

-

 

 

 

7,820,713

 

 

 

-

 

Research and development expenses

 

 

-

 

 

 

998,746

 

 

 

-

 

 

 

3,043,535

 

Total operating expenses

 

 

2,270,062

 

 

 

2,517,130

 

 

 

10,442,742

 

 

 

14,000,241

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(1,961,999

)

 

 

(1,701,019

)

 

 

(9,490,821

)

 

 

(3,664,201

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

-

 

 

 

311,569

 

 

 

-

 

 

 

954,594

 

Interest expense

 

 

(105,401

)

 

 

-

 

 

 

(143,716

)

 

 

(62,290

)

Fair value adjustment on warrants

 

 

2,151

 

 

 

144,210

 

 

 

46,499

 

 

 

224,664

 

Other Income

 

 

501,578

 

 

 

546

 

 

 

501,578

 

 

 

2,065

 

 Total other income, net

 

 

398,328

 

 

 

456,325

 

 

 

404,361

 

 

 

1,119,033

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

 

(1,563,671

)

 

 

(1,244,694

)

 

 

(9,086,460

)

 

 

(2,545,168

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expenses (benefits)

 

 

-

 

 

 

10,059

 

 

 

-

 

 

 

(637,884

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(1,563,671

)

 

$

(1,254,753

)

 

$

(9,086,460

)

 

$

(1,907,284

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

(174,104

)

 

 

(3,140,062

)

 

 

(1,152,031

)

 

 

(2,479,077

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive (loss) income

 

$

(1,737,775

)

 

$

(4,394,815

)

 

$

(10,238,491

)

 

$

(4,386,361

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.71

)

 

$

(0.57

)

 

$

(4.11

)

 

$

(0.86

)

Diluted

 

$

(0.71

)

 

$

(0.57

)

 

$

(4.11

)

 

$

(0.86

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

2,210,913

 

 

 

2,210,913

 

 

 

2,210,913

 

 

 

2,210,913

 

Diluted

 

 

2,210,913

 

 

 

2,210,913

 

 

 

2,210,913

 

 

 

2,210,913

 

 

 

BIOSTAR PHARMACEUTICALS, INC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

Nine Months Ended September 30,

 

 

2016

 

2015

 

CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES

 

 

 

 

Net loss

 

$

(9,086,460

)

 

$

(1,907,284

)

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

 

 

 

 

 

 

 

 

Accrued interest income

 

 

-

 

 

 

(949,582

)

Deferred tax benefit

 

 

-

 

 

 

(580,367

)

Depreciation and amortization

 

 

913,394

 

 

 

1,005,498

 

Recognition of deferred research and development expenses

 

 

 

 

 

 

1,014,512

 

Fair value adjustment on warrants

 

 

(46,499

)

 

 

(224,664

)

Provision for sales discounts

 

 

-

 

 

 

1,478,124

 

Provision for doubtful accounts

 

 

7,820,713

 

 

 

-

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

1,605,000

 

 

 

(4,696,508

)

Inventories

 

 

(214,017

)

 

 

19,794

 

Deposits and other receivables

 

 

-

 

 

 

2,319,480

 

Accounts payable and accrued expenses

 

 

52,903

 

 

 

2,753,073

 

Value-added tax payable

 

 

(133,977

)

 

 

(381,380

)

Income tax payable/recoverable

 

 

-

 

 

 

(57,517

)

Net cash provided by (used in) operating activities

 

 

911,057

 

 

 

(206,821

)

 

 

 

 

 

 

 

 

 

CASH FLOWS USED IN INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Deposit paid for intended acquisition

 

 

-

 

 

 

(1,623,219

)

Purchase of property, plant and equipment

 

 

-

 

 

 

(30,522

)

Net cash used in investing activities

 

 

-

 

 

 

(1,653,741

)

 

 

 

 

 

 

 

 

 

CASH FLOWS USED IN FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Repayment of short-term bank loans

 

 

(281,016

)

 

 

(186,670

)

Net cash used in financing activities

 

 

(281,016

)

 

 

(186,670

)

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(9,580

)

 

 

473,989

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

 

620,461

 

 

 

(1,573,243

)

 

 

 

 

 

 

 

 

 

Cash and cash equivalents, beginning balance

 

 

38,898

 

 

 

1,685,154

 

Cash and cash equivalents, ending balance

 

$

659,359

 

 

$

111,911

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES:

 

 

 

 

 

 

 

 

Interest received

 

$

-

 

 

$

5,012

 

Interest paid

 

$

(143,716

)

 

$

(59,406

)


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