Biostar Pharmaceuticals, Inc. Announces Its Annual Results for The Year Ended December 31, 2016

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Biostar Pharmaceuticals, Inc.

Apr 13, 2017, 16:00 ET

XIANYANG, China, April 13, 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 the year ended December 31, 2016.

During the fiscal year of 2016, the Company recognized:

  • Net sales of $2.4 million, a decrease of approximately $24.7 million, or 91.2% as compared to the year 2015.
  • Gross profit decreased by approximately $10.2 million, or 91.8% as compared to the year 2015.
  • Net loss of $5.7 million as compared to net loss of $25.1 million for the year 2015.
  • R&D expenses of approximately $1.1 million, as compared to $4.0 million for the year 2015.

The Company had no sales on all Aoxing Pharmaceutical Products in the year ended December 31, 2016 as Aoxing Pharmaceutical temporarily stopped production to conduct maintenance of its production lines in order to renew its GMP certificates which is expected to be renewed in the first half of 2017 at which time the production will resume. Sales of Shaanxi Weinan's products also decreased substantially during the year ended December 31, 2016 due to replacing production equipment to comply with government's environmental protection requirement. The Company currently anticipates that the production of Shaanxi Weinan products will resume in the first half of 2017. The temporary suspension of production has 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.   

*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.  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, the Company's ability to resume production as 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, 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
[email protected]
http://www.biostarpharmaceuticals.com

BIOSTAR PHARMACEUTICALS, INC.

CONSOLIDATED BALANCE SHEETS





AS OF DECEMBER 31,


2016

2015






ASSETS










Current Assets




Cash and cash equivalents

$

173,290

$

38,898

Accounts receivable, net

6,741,454


15,814,880

Inventories

166,564


234,660

Deposits and other receivables

171,062


2,591

Value-added tax receivable

41,462


-

Income tax recoverable

71,292


76,280

Total Current Assets

7,365,124


16,167,309








Non-current Assets






Deposits

21,148,284


16,099,958

Deferred tax assets, net

2,515,272


5,406,593

Property and equipment, net

5,866,612


6,810,933

Intangible assets, net

5,607,146


6,878,787

Total Non-Current Assets

35,137,314


35,196,271








Total Assets

$

42,502,438

$

51,363,580








LIABILITIES AND STOCKHOLDERS' EQUITY














Current Liabilities






Accounts and other payables

$

2,842,142

$

4,153,411

Short-term bank loans

2,325,643


2,773,199

Valued-added tax payable

-


112,629

Warrants liability

455,476


59,202

Total Current Liabilities

5,623,261


7,098,441








Commitment and contingencies














Stockholders' Equity






Common stock, $0.001 par value, 100,000,000 shares authorized, 2,637,188 issued and
outstanding as of December 31, 2016 and 2,210,913 shares issued and outstanding as of
December 31, 2015

2,637


2,210

Additional paid-in capital

31,382,467


30,316,774

Statutory reserve

7,354,413


7,354,413

(Accumulated deficit) Retained earnings

(2,540,991)


3,157,394

Accumulated other comprehensive income

680,651


3,434,348

Total Stockholders' Equity

36,879,177


44,265,139








Total Liabilities and Stockholders' Equity

$

42,502,438

$

51,363,580

BIOSTAR PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME








FOR THE YEARS ENDED
DECEMBER 31,


2016

2015






Sales, net

$

2,384,492

$

27,129,609

Cost of sales

1,469,318


16,025,544

     Gross profit

915,174


11,104,065








Operating expenses:






     Advertising expenses

-


3,803,780

     Selling expenses

1,169,416


4,835,398

     General and administrative expenses

2,431,462


4,648,902

     Research and development expenses

1,144,044


4,020,909

     Impairment loss on intangible assets

-


2,973,796

     (Recovery of)  provision for doubtful accounts receivable

(265,486)


4,666,730

     Impairment loss on loan receivables

-


8,845,999

     Impairment loss on prepaid lease payment

-


1,066,115

          Total operating expenses

4,479,436


34,861,629








Loss from operations

(3,564,262)


(23,757,564)








Other income (expense)






     Interest income

1,165


8,895

     Interest expense

(206,195)


(283,596)

     Fair value adjustment on warrants

227,106


324,093

     Other income (expense), net

496,855


(84,544)

          Total other income (expense), net

518,931


(35,152)








Loss before income taxes

(3,045,331)


(23,792,716)








Provision for income tax

2,653,054


1,319,846








Net Loss

$

(5,698,385)

$

(25,112,562)








Foreign currency translation adjustment

(2,753,697)


(2,957,650)








Comprehensive loss

$

(8,452,082)

$

(28,070,212)








Loss per share






      Basic

$

(2.5)

$

(11.4)

      Diluted

$

(2.5)

$

(11.4)








Weighted average number of common shares outstanding






      Basic

2,297,336


2,210,913

      Diluted

2,297,336


2,210,913

BIOSTAR PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS





FOR THE YEARS ENDED
DECEMBER 31,


2016

2015






CASH FLOWS FROM OPERATING ACTIVITIES




Net loss

$

(5,698,385)

$

(25,112,562)

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






     Deferred income tax expense

2,653,054


1,332,951

     Depreciation and amortization

1,142,538


2,320,195

     (Recovery of) provision for doubtful accounts

(265,486)


4,666,730

     Recognition of deferred research and development expenses

-


4,020,909

     Impairment loss on intangible assets

-


2,973,796

     Impairment loss on loan receivable

-


8,845,999

     Impairment loss on prepaid lease payment

-


1,066,115

     Loss on disposal of property, plant and equipment

-


738,834

     Warrants liability

(227,106)


(324,093)

Changes in operating assets and liabilities:






     Accounts receivable

8,669,935


5,448,178

     Inventories

55,148


420,584

     Deposits and other receivables

(176,293)


392,425

     Accounts payable and accrued expenses

(1,087,350)


(602,958)

     Value-added tax payable

(153,390)


(309,890)

Net cash provided by operating activities

4,912,665


5,877,213








CASH FLOWS FROM INVESTING ACTIVITIES






Purchase of property, plant and equipment

-


(59,475)

Deposit paid for intended acquisitions

(6,378,136)


(8,122,236)

Receipt from loan receivable

-


804,182

Net cash used in investing activities

(6,378,136)


(7,377,529)








CASH FLOWS FROM FINANCING ACTIVITIES






Repayment of short-term bank loans

(278,315)


(160,836)

Proceeds from stock issuance and warrants

1,689,500


-

Net cash provided by (used in) financing activities

1,411,185


(160,836)








Effect of exchange rate changes on cash and cash equivalents

188,678


14,896








Net increase (decrease) in cash and cash equivalents

134,392


(1,646,256)








Cash and cash equivalents, beginning balance

38,898


1,685,154

Cash and cash equivalents, ending balance

$

173,290

$

38,898








SUPPLEMENTAL DISCLOSURES:






Interest received

$

1,264

$

8,896

Interest paid

$

(37,807)

$

(133,618)

SOURCE Biostar Pharmaceuticals, Inc.