Biostar Pharmaceuticals, Inc. Announces Its Annual Results for The Year Ended December 31, 2015

News provided by

Biostar Pharmaceuticals, Inc.

Apr 14, 2016, 04:00 ET

XIANYANG, China, April 14, 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 year ended December 31, 2015.

During the fiscal year of 2015, the Company recognized:

  • Net sales of $27.1 million, a decrease of approximately $34.3 million, or 55.8% as compared to the year of 2014.
  • Gross profit decreased by approximately $19.2 million, or 63.3% as compared to the year 2014.
  • Net loss of $25.1 million as compared to net income of $4.8 million for the year 2014.
  • Impairment loss on loan receivables of $8.8 million, approximately 32.6% of net sales.
  • Impairment loss on intangible assets of $3.0 million.
  • R&D expenses of approximately $4 million, as compared to $2.8 million for the year of 2014.

The Company experienced a material decrease in sales volume of all Aoxing Pharmaceutical Products in the year ended December 31, 2015 when compared to the year ended December 31, 2014, as Aoxing Pharmaceutical has temporarily halted production in order to conduct maintenance on its production lines for the purpose of renewing its GMP certificates by the second quarter of 2016.  During 2015, the Company reviewed its drug permits and identified certain permits that the Company did not have plans to produce in the foreseeable future; accordingly, the Company has fully impaired the carrying value of those drug permits. Also, the Company has determined the unsecured loans provided to a third party borrower are uncollectible as the borrower has become insolvent, and thus, the Company recognized those receivables as impaired. The interruption in production has materially negatively affected our operating results; as a result, there may be substantial doubt regarding the Company's ability to continue as a going concern.  Net sales and related gross profit both decreased significantly in the year of 2015 as result of these maintenance efforts.

*The Company's Consolidated Balance Sheets, Statement of Operations, and Cash Flows can be found on Form 10-K 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.

CONSOLIDATED BALANCE SHEETS






AS OF DECEMBER 31,


2015

2014







ASSETS












Current Assets





Cash and cash equivalents

$

38,898

$

1,685,154

Accounts receivable, net

15,814,880


26,962,078

Inventories

234,660


673,989

Deposits and other receivables

2,591


4,471,992

Income tax recoverable

76,280


67,370

Loan receivable, net

-


9,772,464

Total Current Assets

16,167,309


43,633,047









Non-current Assets







Deposits

16,099,958


8,795,218

Deferred tax assets, net

5,406,593


7,065,523

Property and equipment, net

6,810,933


8,483,113

Intangible assets, net

6,878,787


13,270,330

Total Non-Current Assets

35,196,271


37,614,184









Total Assets

$

51,363,580

$

81,247,231









LIABILITIES AND STOCKHOLDERS' EQUITY
















Current Liabilities







Accounts and other payables

$

4,153,411

$

5,001,086

Short-term bank loans

2,773,199


3,094,614

Valued-added tax payable

112,629


432,885

Warrants liability

59,202


383,295

Total Current Liabilities

7,098,441


8,911,880









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 December 31, 2015 and 2014

2,210


2,210

Additional paid-in capital

30,316,774


30,316,774

Statutory reserve

7,354,413


7,354,413

Retained earnings

3,157,394


28,269,956

Accumulated other comprehensive income

3,434,348


6,391,998

Total Stockholders' Equity

44,265,139


72,335,351









Total Liabilities and Stockholders' Equity

$

51,363,580

$

81,247,231


BIOSTAR PHARMACEUTICALS, INC.


CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME




FOR THE YEARS ENDED DECEMBER 31,

2015

2014









Sales, net

$

27,129,609

$

61,416,587

Cost of sales

16,025,544


31,140,225

     Gross profit

11,104,065


30,276,362









Operating expenses:







     Advertising expenses

3,803,780


8,594,303

     Selling expenses

4,835,398


9,892,447

     General and administrative expenses

4,648,902


7,718,388

     Research and development expenses

4,020,909


2,766,162

     Impairment loss on intangible assets

2,973,796


990,603

     Provision for doubtful accounts receivable

4,666,730


-

     Impairment loss on loan receivables

8,845,999


-

     Impairment loss on prepaid lease payment

1,066,115


-

     Construction in progress written off

-


1,627,154

          Total operating expenses

34,861,629


31,589,057









Loss from operations

(23,757,564)


(1,312,695)









Other (expense) income







     Interest income

8,895


1,330,329

     Interest expense

(283,596)


(154,547)

     Fair value adjustment on warrants

324,093


577,599

     Gain on disposal of intangible assets

-


-

 Additional compensation received for the disposed land use rights

-


1,093,878

     Other (expense) income, net

(84,544)


67

          Total other (expense) income, net

(35,152)


2,847,326









(Loss) Income before income taxes

(23,792,716)


1,534,631









Provision for income tax (Income tax benefit)

1,319,846


(3,313,581)









(Loss) Net income

$

(25,112,562)

$

4,848,212









Foreign currency translation adjustment

(2,957,650)


(208,456)









Comprehensive (loss) income

$

(28,070,212)

$

4,639,756









(Loss) Earning per share







      Basic

$

(11.4)

$

2.3

      Diluted

$

(11.4)

$

2.3









Weighted average number of common shares outstanding







      Basic

2,210,913


2,071,343

      Diluted

2,210,913


2,071,343

BIOSTAR PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS






FOR THE YEARS ENDED DECEMBER 31,


2015

2014







CASH FLOWS FROM OPERATING ACTIVITIES





Net (loss) income

$

(25,112,562)

$

4,848,212

Adjustments to reconcile net (loss) income to net cash provided by operating activities:







     Deferred income tax expense (benefit)

1,332,951


(4,284,655)

     Depreciation and amortization

2,320,195


3,086,188

     Provision for doubtful debts

4,666,730


-

     Recognition of deferred research and development expenses

4,020,909


2,766,162

     Impairment loss on intangible assets

2,973,796


990,603

     Impairment loss on loan receivable

8,845,999


-

     Impairment loss on prepaid lease payment

1,066,115


-

     Construction in progress written off

-


1,627,154

     Loss on disposal of property, plant and equipment

738,834


3,275

     Additional compensation received for the disposed land use rights

-


(1,093,878)

     Stock-based compensation

-


2,021,017

     Warrants liability

(324,093)


(577,599)

Changes in operating assets and liabilities:







     Accounts receivable

5,448,178


(7,441,446)

     Inventories

420,584


152,454

     Deposits and other receivables

392,425


244,270

     Accounts payable and accrued expenses

(602,958)


573,102

     Value-added tax payable

(309,890)


90,148

     Income tax payable

-


305,611

Net cash provided by operating activities

5,877,213


3,310,618









CASH FLOWS FROM INVESTING ACTIVITIES







Purchase of property, plant and equipment

(59,475)


(2,869,204)

Proceeds from disposal of property, plant and equipment

-


2,929

Deposit paid for research and development 

-


(4,067,885)

Deposit paid for intended acquisitions



(8,122,236)


(4,881,462)

Proceeds from disposal of two drug approval numbers

-


1,390,661

Receipt from loan receivable

804,182


-

Compensation received for disposed land use rights

-


1,546,822

Net cash used in investing activities

(7,377,529)


(8,878,139)









CASH FLOWS FROM FINANCING ACTIVITIES







Proceeds from short-term bank loans

-


3,254,307

Repayment of short-term bank loans

(160,836)


(162,715)

Proceeds from stock issuance and warrants

-


3,862,533

Net cash (used in) provided by financing activities

(160,836)


6,954,125









Effect of exchange rate changes on cash and cash equivalents

14,896


218,478









Net (decrease) increase in cash and cash equivalents

(1,646,256)


1,605,082









Cash and cash equivalents, beginning balance

1,685,154


80,072

Cash and cash equivalents, ending balance

$

38,898

$

1,685,154









SUPPLEMENTAL DISCLOSURES:







Interest received

$

8,896

$

1,330,329

Interest paid

$

(133,618)

$

(154,547)

Income tax payments

$

-

$

(665,621)

SOURCE Biostar Pharmaceuticals, Inc.