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Biostar Pharmaceuticals, Inc. Announces Its Quarterly Results for Three Months Ended June 30, 2017

2017-11-16 05:30 725

XIANYANG, China, Nov. 16, 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 second quarter ended June 30, 2017.

During the fiscal second 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 $1.3 million as compared to net loss of $6.9 million for the same period in 2016.

The Company had no sales on all Aoxing Pharmaceutical products in the three months ended June 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



June 30,


December 31,


2017


2016


(Unaudited)



ASSETS





Current Assets




Cash and cash equivalents

$

407,410


$

173,290

Accounts receivable, net


-



6,741,454

Inventories


167,294



166,564

Deposits and other receivables


192,909



171,062

Value-added tax recoverable


50,541



41,462

Income tax recoverable


72,980



71,292

Total Current Assets


891,134



7,365,124







Non-current Assets






Deposits


26,070,882



21,148,284

Deferred tax assets, net


2,574,809



2,515,272

Property and equipment, net


5,819,500



5,866,612

Intangible assets, net


5,420,996



5,607,146

Total Non-Current Assets


39,886,187



35,137,314







Total Assets

$

40,777,321


$

42,502,438













LIABILITIES AND STOCKHOLDERS' EQUITY







Current Liabilities






Accounts and other payables

$

2,731,221


$

2,842,142

Short-term bank loans


2,380,690



2,325,643

Warrants liability


179,070



455,476

Total Current Liabilities


5,290,981



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 June 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


(4,869,527)



(2,540,991)

Accumulated other comprehensive income


1,616,350



680,651

Total Stockholders' Equity


35,486,340



36,879,177







Total Liabilities and Stockholders' Equity

$

40,777,321


$

42,502,438



BIOSTAR PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(Unaudited)



Three months ended June 30,


Six months ended June 30,


2017


2016


2017


2016









Sales, net

$

-


$

620,138


$

-


$

1,421,765

Cost of sales


-



321,250



-



777,907

Gross profit


-



298,888



-



643,858













Operating expenses:












Selling expenses


12,208



290,047



285,684



613,113

General and administrative expenses


1,515,827



539,433



2,282,152



1,229,856

Provision for doubtful debt


-



6,329,711



-



6,329,711

Total operating expenses


1,528,035



7,159,191



2,567,836



8,172,680













Loss from operations


(1,528,035)



(6,860,303)



(2,567,836)



(7,528,822)













Other income (expense):












Interest income


3



-



1,308



-

Interest expense


(45,905)



(76)



(91,622)



(38,315)

Fair value adjustment on warrants


259,440



16,156



276,406



44,348

Other income


110



-



53,609



-

Other expense


-



-



(401)



-

 Total other income, net


213,648



16,080



239,300



6,033













Loss before income taxes


(1314,387)



(6,844,223)



(2,328,536)



(7,522,789)













Income tax expenses (benefits)


-



58,225



-



-













Net loss

$

(1,314,387)


$

(6,902,448)


$

(2,328,536)


$

(7,522,789)













Foreign currency translation adjustment


618,794



(1,287,182)



935,699



(977,927)













Comprehensive loss

$

(695,593)


$

(8,189,630)


$

(1,392,837)


$

(8,500,716)













Net loss per share












Basic

$

(0.50)


$

(3.12)


$

(0.88)


$

(3.40)

Diluted

$

(0.50)


$

(3.12)


$

(0.88)


$

(3.40)













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)



Six Months Ended June 30,


2017


2016

CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES




Net loss

$

(2,328,536)


$

(7,522,789)

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






Depreciation and amortization


579,602



512,863

Allowance for doubtful debts


-



6,329,711

Fair value adjustment on warrants


(276,406)



(44,348)

Changes in operating assets and liabilities:






Accounts receivable


6,809,977



1,497,574

Inventories


3,171



(89,451)

Deposits and other receivables


(17,566)



-

Accounts payable and accrued expenses


(175,295)



(223,052)

Value-added tax payable


(7,991)



(106,875)

Net cash provided by operating activities


4,586,956



353,633







CASH FLOWS USED IN INVESTING ACTIVITIES






Deposit paid to intended acquisition


(4,363,687)



-

Net cash used in investing activities


(4,363,687)



-







CASH FLOWS USED IN FINANCING ACTIVITIES






Repayment of short-term bank loans


-



(282,903)

Net cash used in financing activities


-



(282,903)







Effect of exchange rate changes on cash and cash equivalents


10,851



97,482







Net increase in cash and cash equivalents


234,120



168,212







Cash and cash equivalents, beginning balance


173,290



38,898

Cash and cash equivalents, ending balance

$

407,410


$

207,110







SUPPLEMENTAL DISCLOSURES:






Interest received

$

1,308


$

-

Interest paid

$

-


$

(38,315)

View original content:http://www.prnewswire.com/news-releases/biostar-pharmaceuticals-inc-announces-its-quarterly-results-for-three-months-ended-june-30-2017-300556660.html

Source: Biostar Pharmaceuticals, Inc.
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