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Biostar Pharmaceuticals, Inc. Announces Its Quarterly Results for Nine Months Ended September 30, 2017

2017-11-21 05:01 651

XIANYANG, China, Nov. 21, 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 third quarter ended September 30, 2017.

During the third fiscal quarter of 2017, the Company recognized:

  • No net sales, a decrease of approximately $0.6 million or 100% as compared to the same period in 2016.
  • No gross profit, a decreased of approximately $0.3 million or 100% as compared to the same period in 2016.
  • Net loss of $0.1 million as compared to net loss of $1.6 million for the same period in 2016.

The Company had no sales on all Aoxing Pharmaceutical products in the third fiscal quarter ended September 30, 2017 as Aoxing Pharmaceutical temporarily stopped production to conduct maintenance of its production lines to renew its GMP certificates. The application for the renewal of Aoxing Pharmaceutical's GMP certificates has been preliminarily approved and publicly announced by the local government in October 2017, subject to the final approval to be granted before the end of 2017, at which time the production is expected to resume. There is no assurance that the production lines at Aoxing will resume as and when expected and that the GMP certificates will be renewed as and when anticipated, or even if such certificates are renewed, the Company will be able to return to the anticipated production levels, which, in turn, may have material adverse effects on the Company's business, operations, financial performance and value of its securities. The Company also had no sales on Shaanxi Weinan's products during the second quarter of 2017 due to replacing production equipment to comply with government's environmental protection requirements. The Company currently anticipates resuming the production of Shaanxi Weinan production lines before the end of 2017. The above-referenced suspensions of the Company's production lines have 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.  If the Company is unable to renew its GMP certificates and resume production as and when anticipated, its operations will be materially negatively affected and the Company might become insolvent, and the Company's revenues, operations and the value of its common stock and common stock equivalents would be materially negatively impacted; the Company may substantially curtail or cease its operations.

*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, including updated risk factors facing the Company.

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 GMP certification renewal process in the time frame as and when currently anticipated, the Company's ability to resume production as and when anticipated, its ability to resume and 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

 











September 30,



December 31,




2017



2016




(Unaudited)





ASSETS









Current Assets







Cash and cash equivalents


$

364,973



$

173,290


Accounts receivable, net



-




6,741,454


Inventories



170,555




166,564


Deposits and other receivables



335,183




171,062


Value-added tax recoverable



51,526




41,462


Income tax recoverable



74,402




71,292


Total Current Assets



996,639




7,365,124











Non-current Assets









Deposits



26,579,097




21,148,284


Deferred tax assets, net



2,625,001




2,515,272


Property and equipment, net



5,845,985




5,866,612


Intangible assets, net



5,380,544




5,607,146


Total Non-Current Assets



40,430,627




35,137,314











Total Assets


$

41,427,266



$

42,502,438




















LIABILITIES AND STOCKHOLDERS' EQUITY











Current Liabilities









Accounts and other payables


$

2,686,200



$

2,842,142


Short-term bank loans



2,427,098




2,325,643


Warrants liability



166,145




455,476


Total Current Liabilities



5,279,443




5,623,261











Commitment and contingencies


















Stockholders' Equity









Common stock, $0.001 par value, 100,000,000 shares authorized, 2,637,188 shares issued and outstanding as of September 30, 2017 and December 31, 2016



2,637




2,637


Additional paid-in capital



31,382,467




31,382,467


Statutory reserve



7,354,413




7,354,413


Accumulated deficit



(4,994,713)




(2,540,991)


Accumulated other comprehensive income



2,403,019




680,651


Total Stockholders' Equity



36,147,823




36,879,177











Total Liabilities and Stockholders' Equity


$

41,427,266



$

42,502,438


 

 

 

BIOSTAR PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME

(Unaudited)

 










Three months ended September 30,



Nine months ended September 30,




2017



2016



2017



2016















Sales, net


$

-



$

644,933



$

-



$

2,066,698


Cost of sales



-




336,870




-




1,114,777


Gross profit



-




308,063




-




951,921



















Operating expenses:

















Selling expenses



14,668




290,924




300,352




904,037


General and administrative expenses



558,713




488,136




2,840,865




1,717,992


Provision for doubtful debt



-




1,491,002




-




7,820,713


Total operating expenses



573,381




2,270,062




3,141,217




10,442,742



















Loss from operations



(573,381)




(1,961,999)




(3,141,217)




(9,490,821)



















Other income (expense):

















Interest income



13




-




1,321




-


Interest expense



(47,209)




(105,401)




(138,831)




(143,716)


Fair value adjustment on warrants



12,925




2,151




289,331




46,499


Other income



482,466




501,578




535,674




501,578


 Total other income, net



448,195




398,328




687,495




404,361



















Loss before income taxes



(125,186)




(1,563,671)




(2,453,722)




(9,086,460)



















Income tax expenses



-




-




-




-



















Net loss


$

(125,186)



$

(1,563,671)



$

(2,453,722)



$

(9,086,460)



















Foreign currency translation adjustment



786,669




(174,104)




1,722,368




(1,152,031)



















Comprehensive loss


$

661,483



$

(1,737,775)



$

(731,354)



$

(10,238,491)



















Net loss per share

















Basic


$

(0.05)



$

(0.71)



$

(0.93)



$

(4.11)


Diluted


$

(0.05)



$

(0.71)



$

(0.93)



$

(4.11)



















Weighted average number of common shares outstanding

















Basic



2,637,188




2,210,913




2,637,188




2,210,913


Diluted



2,637,188




2,210,913




2,637,188




2,210,913


 

 

 

BIOSTAR PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 








Nine Months Ended September 30,




2017



2016


CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES







Net loss


$

(2,453,722)



$

(9,086,460)


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









Depreciation and amortization



879,845




913,394


Provision for doubtful accounts



-




7,820,713


Fair value adjustment on warrants



(289,331)




(46,499)


Changes in operating assets and liabilities:









Accounts receivable



6,879,240




1,605,000


Inventories



3,203




(214,017)


Deposits and other receivables



(153,182)




-


Accounts payable and accrued expenses



(272,433)




52,903


Value-added tax payable



(8,073)




(133,977)


Net cash provided by operating activities



4,585,547




911,057











CASH FLOWS USED IN INVESTING ACTIVITIES









Deposit paid to intended acquisition



(4,408,070)




-


Net cash used in investing activities



(4,408,070)




-











CASH FLOWS USED IN FINANCING ACTIVITIES









Repayment of short-term bank loans



-




(281,016)


Net cash used in financing activities



-




(281,016)











Effect of exchange rate changes on cash and cash equivalents



14,206




(9,580)











Net increase in cash and cash equivalents



191,683




620,461











Cash and cash equivalents, beginning balance



173,290




38,898


Cash and cash equivalents, ending balance


$

364,973



$

659,359











SUPPLEMENTAL DISCLOSURES:









Interest received


$

1,321



$

-


Interest paid


$

-



$

(143,716)


 

DC\81799269.1  

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Source: Biostar Pharmaceuticals, Inc.
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