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13
Apr
2017
Biostar Pharmaceuticals, Inc. Announces Its Annual Results for The Year Ended December 31, 2016

Biostar Pharmaceuticals, Inc. Announces Its Annual Results for The Year Ended December 31, 2016

XIANYANG, China, April 13, 2017 /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 year ended December 31, 2016.

During the fiscal year of 2016, the Company recognized:

    .Net sales of $2.4 million, a decrease of approximately $24.7 million, or 91.2% as compared to the year 2015.

    .Gross profit decreased by approximately $10.2 million, or 91.8% as compared to the year 2015.

    .Net loss of $5.7 million as compared to net loss of $25.1 million for the year 2015.

    .R&D expenses of approximately $1.1 million, as compared to $4.0 million for the year 2015.

The Company had no sales on all Aoxing Pharmaceutical Products in the year ended December 31, 2016 as Aoxing Pharmaceutical temporarily stopped production to conduct maintenance of its production lines in order to renew its GMP certificates which is expected to be renewed in the first half of 2017 at which time the production will resume. Sales of Shaanxi Weinan¡¯s products also decreased substantially during the year ended December 31, 2016 due to replacing production equipment to comply with government¡¯s environmental protection requirement. The Company currently anticipates that the production of Shaanxi Weinan products will resume in the first half of 2017. The temporary suspension of production has materially negatively affected the Company¡¯s operating results; as a result, there may be substantial doubt regarding the Company¡¯s ability to continue as a going concern.   

*The Company¡¯s Consolidated Balance Sheets, Statement of Operations, and Cash Flows can be found on Form 10-K 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.  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, the Company¡¯s ability to resume production as 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, 2016, 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.

CONSOLIDATED BALANCE SHEETS






AS OF DECEMBER 31,



2016



2015







ASSETS












Current Assets






Cash and cash equivalents


$

173,290



$

38,898

Accounts receivable, net



6,741,454



  

    15,814,880

Inventories



166,564




234,660

Deposits and other receivables



171,062




2,591

Value-added tax receivable



41,462




-

Income tax recoverable



71,292




76,280

Total Current Assets



7,365,124




16,167,309









Non-current Assets








Deposits



21,148,284




16,099,958

Deferred tax assets, net



2,515,272




5,406,593

Property and equipment, net



5,866,612




6,810,933

Intangible assets, net



5,607,146




6,878,787

Total Non-Current Assets



35,137,314




35,196,271









Total Assets


$

42,502,438



$

51,363,580









LIABILITIES AND STOCKHOLDERS¡¯ EQUITY
















Current Liabilities








Accounts and other payables


$

2,842,142



$

4,153,411

Short-term bank loans



2,325,643




2,773,199

Valued-added tax payable



-




112,629

Warrants liability



455,476




59,202

Total Current Liabilities



5,623,261




7,098,441









Commitment and contingencies
















Stockholders¡¯ Equity








Common stock, $0.001 par value, 100,000,000 shares authorized, 2,637,188 issued and 
outstanding as of December 31, 2016 and 2,210,913 shares issued and outstanding as of 
December 31, 2015



2,637




2,210

Additional paid-in capital



31,382,467




30,316,774

Statutory reserve



7,354,413




7,354,413

(Accumulated deficit) Retained earnings



(2,540,991)




3,157,394

Accumulated other comprehensive income



680,651




3,434,348

Total Stockholders¡¯ Equity



36,879,177




44,265,139









Total Liabilities and Stockholders¡¯ Equity


$

42,502,438



$

51,363,580

 

BIOSTAR PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME









FOR THE YEARS ENDED 
DECEMBER 31,



2016



2015







Sales, net


$

2,384,492



$

27,129,609

Cost of sales



1,469,318




16,025,544

     Gross profit



915,174




11,104,065









Operating expenses:








     Advertising expenses



-




3,803,780

     Selling expenses



1,169,416




4,835,398

     General and administrative expenses



2,431,462




4,648,902

     Research and development expenses



1,144,044




4,020,909

     Impairment loss on intangible assets



-




2,973,796

     (Recovery of)  provision for doubtful accounts receivable



(265,486)




4,666,730

     Impairment loss on loan receivables



-




8,845,999

     Impairment loss on prepaid lease payment



-




1,066,115

          Total operating expenses



4,479,436




34,861,629









Loss from operations



(3,564,262)




(23,757,564)









Other income (expense)








     Interest income



1,165




8,895

     Interest expense



(206,195)




(283,596)

     Fair value adjustment on warrants



227,106




324,093

     Other income (expense), net



496,855




(84,544)

          Total other income (expense), net



518,931




(35,152)









Loss before income taxes



(3,045,331)




(23,792,716)









Provision for income tax



2,653,054




1,319,846









Net Loss


$

(5,698,385)



$

(25,112,562)









Foreign currency translation adjustment



(2,753,697)




(2,957,650)









Comprehensive loss


$

(8,452,082)



$

(28,070,212)









Loss per share








      Basic


$

(2.5)



$

(11.4)

      Diluted


$

(2.5)



$

(11.4)









Weighted average number of common shares outstanding








      Basic



2,297,336




2,210,913

      Diluted



2,297,336




2,210,913

 

BIOSTAR PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS






FOR THE YEARS ENDED 
DECEMBER 31,



2016



2015







CASH FLOWS FROM OPERATING ACTIVITIES






Net loss


$

(5,698,385)



$

(25,112,562)

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








     Deferred income tax expense



2,653,054




1,332,951

     Depreciation and amortization



1,142,538




2,320,195

     (Recovery of) provision for doubtful accounts



(265,486)




4,666,730

     Recognition of deferred research and development expenses



-




4,020,909

     Impairment loss on intangible assets



-




2,973,796

     Impairment loss on loan receivable



-




8,845,999

     Impairment loss on prepaid lease payment



-




1,066,115

     Loss on disposal of property, plant and equipment



-




738,834

     Warrants liability



(227,106)




(324,093)

Changes in operating assets and liabilities:








     Accounts receivable



8,669,935




5,448,178

     Inventories



55,148




420,584

     Deposits and other receivables



(176,293)




392,425

     Accounts payable and accrued expenses



(1,087,350)




(602,958)

     Value-added tax payable



(153,390)




(309,890)

Net cash provided by operating activities



4,912,665




5,877,213









CASH FLOWS FROM INVESTING ACTIVITIES








Purchase of property, plant and equipment



-




(59,475)

Deposit paid for intended acquisitions



(6,378,136)




(8,122,236)

Receipt from loan receivable



-




804,182

Net cash used in investing activities



(6,378,136)




(7,377,529)









CASH FLOWS FROM FINANCING ACTIVITIES








Repayment of short-term bank loans



(278,315)




(160,836)

Proceeds from stock issuance and warrants



1,689,500




-

Net cash provided by (used in) financing activities



1,411,185




(160,836)









Effect of exchange rate changes on cash and cash equivalents



188,678




14,896









Net increase (decrease) in cash and cash equivalents



134,392




(1,646,256)









Cash and cash equivalents, beginning balance



38,898




1,685,154

Cash and cash equivalents, ending balance


$

173,290



$

38,898









SUPPLEMENTAL DISCLOSURES:








Interest received


$

1,264



$

8,896

Interest paid


$

(37,807)



$

(133,618)

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