XIANYANG, China, Aug. 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 second quarter ended June
30, 2016.
During the fiscal second quarter of 2016, the Company
recognized:
- Net sales of $0.6 million, a
decrease of approximately $13.6
million, or 95.6% as compared to the same period in
2015.
- Gross profit decreased by approximately $5.6 million, or 95.0% for the three months ended
June 30, 2016 as compared to the same
period in 2015.
- Sales of Shaanxi Weinan Products increased by approximately
$0.4 million, or 302.9% as compared
to the same period in 2015.
- Sales and Production of Aoxing Pharmaceutical Products remained
temporarily suspended as the Company still working toward renewal
of its GMP certificates.
- The Company recorded a provision for doubtful accounts in the
amount of $6.3 million during the
second quarter. Our results of operations were materially
affected by this provision.
- Net loss of $6.9 million as
compared to net loss of $0.5 million
for the second quarter 2015.
The Company's sales for the three months ended June 30, 2016 was derived from products
manufactured by its subsidiary Shaanxi Weinan. Aoxing's
manufacturing operations remained temporarily halted as it still
awaits the renewal of GMP Certificates; the Company does not have a
definitive date of when the GMP renewal certificates will be
secured. It is currently using its best efforts to comply
with inspections and regulating authorities. To conserve
capital as result of diminished sales and related cash flows, the
Company has significantly reduced advertising and research
activities during the three months ended June 30, 2016. As result of the Company's
materially reduced sales, working capital deficit of $2,060,971 and cash balance of $207,110, the Company has determined that there
is substantial doubt as to our ability to continue as a going
concern. If the Company is unable to renew its GMP certificates and
subsequently achieve regular production levels, the Company's
results of operations may be materially adversely affected.
*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
|
|
|
June
30,
|
|
December
31,
|
|
2016
|
|
2015
|
|
(Unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
207,110
|
|
|
$
|
38,898
|
Accounts receivable,
net
|
|
|
7,751,439
|
|
|
|
15,814,880
|
Inventories
|
|
|
317,265
|
|
|
|
234,660
|
Deposits and other
receivables
|
|
|
2,534
|
|
|
|
2,591
|
Income tax
recoverable
|
|
|
74,527
|
|
|
|
76,280
|
Loan receivables,
net
|
|
|
-
|
|
|
|
-
|
Total Current
Assets
|
|
|
8,352,875
|
|
|
|
16,167,309
|
|
|
|
|
|
|
|
|
Non-current
Assets
|
|
|
|
|
|
|
|
Deposits
|
|
|
15,730,016
|
|
|
|
16,099,958
|
Deferred tax assets,
net
|
|
|
5,282,360
|
|
|
|
5,406,593
|
Property and
equipment, net
|
|
|
6,406,336
|
|
|
|
6,810,933
|
Intangible assets,
net
|
|
|
6,284,740
|
|
|
|
6,878,787
|
Total Non-Current
Assets
|
|
|
33,703,452
|
|
|
|
35,196,271
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
42,056,327
|
|
|
$
|
51,363,580
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
Accounts and other
payables
|
|
$
|
3,840,975
|
|
|
$
|
4,153,411
|
Short-term bank
loans
|
|
|
2,431,172
|
|
|
|
2,773,199
|
Value-added tax
payable
|
|
|
4,903
|
|
|
|
112,629
|
Warrants
liability
|
|
|
14,854
|
|
|
|
59,202
|
Total Current
Liabilities
|
|
|
6,291,904
|
|
|
|
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
June 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
|
|
|
(4,365,395)
|
|
|
|
3,157,394
|
Accumulated other
comprehensive income
|
|
|
2,456,421
|
|
|
|
3,434,348
|
Total Stockholders'
Equity
|
|
|
35,764,423
|
|
|
|
44,265,139
|
|
|
|
|
|
|
|
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
42,056,327
|
|
|
$
|
51,363,580
|
|
The accompanying
notes are an integral part of these condensed consolidated
financial statements.
|
BIOSTAR
PHARMACEUTICALS, INC
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
AND COMPREHENSIVE
INCOME
|
(Unaudited)
|
|
|
Three months
ended June 30,
|
|
Six months
ended June 30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales, net
|
$
|
620,138
|
|
$
|
14,176,234
|
|
$
|
1,421,765
|
|
$
|
21,084,981
|
Cost of
sales
|
|
321,250
|
|
|
8,237,555
|
|
|
777,907
|
|
|
11,565,052
|
Gross
profit
|
|
298,888
|
|
|
5,938,679
|
|
|
643,858
|
|
|
9,519,929
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Advertising
expenses
|
|
-
|
|
|
2,491,577
|
|
|
-
|
|
|
3,868,741
|
Selling
expenses
|
|
290,047
|
|
|
2,310,314
|
|
|
613,113
|
|
|
3,610,031
|
General and
administrative expenses
|
|
539,433
|
|
|
1,183,795
|
|
|
1,229,856
|
|
|
1,959,550
|
Provision for
doubtful debt
|
|
6,329,711
|
|
|
-
|
|
|
6,329,711
|
|
|
-
|
Research and
development expenses
|
|
-
|
|
|
1,026,177
|
|
|
-
|
|
|
2,044,789
|
Total operating
expenses
|
|
7,159,191
|
|
|
7,011,863
|
|
|
8,172,680
|
|
|
11,483,111
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(6,860,303)
|
|
|
(1,073,184)
|
|
|
(7,528,822)
|
|
|
(1,963,182)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income
|
|
-
|
|
|
2,080
|
|
|
-
|
|
|
2,080
|
Interest
income
|
|
-
|
|
|
320,680
|
|
|
-
|
|
|
643,025
|
Interest
expense
|
|
(76)
|
|
|
(1,396)
|
|
|
(38,315)
|
|
|
(62,851)
|
Fair value adjustment
on warrants
|
|
16,156
|
|
|
90,321
|
|
|
44,348
|
|
|
80,454
|
Total
other income, net
|
|
16,080
|
|
|
411,685
|
|
|
6,033
|
|
|
662,708
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
|
(6,844,223)
|
|
|
(661,499)
|
|
|
(7,522,789)
|
|
|
(1,300,474)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expenses
(benefits)
|
|
58,225
|
|
|
(169,072)
|
|
|
-
|
|
|
(647,943)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
$
|
(6,902,448)
|
|
$
|
(492,427)
|
|
$
|
(7,522,789)
|
|
$
|
(652,531)
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
(1,287,182)
|
|
|
279,920
|
|
|
(977,927)
|
|
|
660,985
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
(loss) income
|
$
|
(8,189,630)
|
|
$
|
(212,507)
|
|
$
|
(8,500,716)
|
|
$
|
8,454
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per
share
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(3.12)
|
|
$
|
(0.22)
|
|
$
|
(3.40)
|
|
$
|
(0.30)
|
Diluted
|
$
|
(3.12)
|
|
$
|
(0.22)
|
|
$
|
(3.40)
|
|
$
|
(0.30)
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying
notes are an integral part of these condensed consolidated
financial statements.
|
BIOSTAR
PHARMACEUTICALS, INC
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
|
Six Months Ended
June 30,
|
|
|
2016
|
|
|
2015
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
Net loss
|
|
$
|
(7,522,789)
|
|
|
$
|
(652,531)
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Accrued interest
income
|
|
|
-
|
|
|
|
(318,987)
|
Deferred tax
benefit
|
|
|
-
|
|
|
|
(647,943)
|
Depreciation and
amortization
|
|
|
512,863
|
|
|
|
977,876
|
Recognition of
deferred research and development expenses
|
|
|
-
|
|
|
|
1,022,395
|
Allowance for doubtful
debts
|
|
|
6,329,711
|
|
|
|
-
|
Warrants
liability
|
|
|
(44,348)
|
|
|
|
(80,454)
|
Provision for sales
discounts
|
|
|
-
|
|
|
|
1,149,652
|
|
|
|
|
|
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
1,497,574
|
|
|
|
(2,882,616)
|
Inventories
|
|
|
(89,451)
|
|
|
|
161,123
|
Deposits and other
receivables
|
|
|
-
|
|
|
|
821,318
|
Accounts payable and
accrued expenses
|
|
|
(223,052)
|
|
|
|
732,542
|
Value-added tax
payable
|
|
|
(106,875)
|
|
|
|
157,183
|
Net cash
provided by operating activities
|
|
|
353,633
|
|
|
|
439,558
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
Deposit paid for
intended acquisition
|
|
|
-
|
|
|
|
(1,635,831)
|
Purchase of property,
plant and equipment
|
|
|
-
|
|
|
|
(30,760)
|
Net cash used in
investing activities
|
|
|
-
|
|
|
|
(1,666,591)
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
Repayment of
short-term bank loans
|
|
|
(282,903)
|
|
|
|
(188,121)
|
Net cash used in
financing activities
|
|
|
(282,903)
|
|
|
|
(188,121)
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
|
97,482
|
|
|
|
43,320
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
|
168,212
|
|
|
|
(1,371,834)
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, beginning balance
|
|
|
38,898
|
|
|
|
1,685,154
|
Cash and cash
equivalents, ending balance
|
|
$
|
207,110
|
|
|
$
|
313,320
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURES:
|
|
|
|
|
|
|
|
Interest
received
|
|
$
|
-
|
|
|
$
|
5,015
|
Interest
paid
|
|
$
|
(38,315)
|
|
|
$
|
(59,867)
|
|
The accompanying
notes are an integral part of these condensed consolidated
financial statements.
|
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-june-30-2016-300316525.html
SOURCE Biostar Pharmaceuticals, Inc.