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
[email protected]
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 |
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 |
Nine months ended |
|||||||||||||||
| 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 |
||||||||||||||||
| 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 |
||||||||
| 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) |
||||
SOURCE Biostar Pharmaceuticals, Inc.
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