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

2016-11-22 05:30 1989

XIANYANG, China, Nov 22, 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)

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/biostar-pharmaceuticals-inc-announces-its-quarterly-results-for-three-months-ended-september-30-2016-300366542.html

Source: Biostar Pharmaceuticals, Inc.
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