BiostarPharmaceuticals,Inc. Announces Its Quarterly Results for Three Months Ended September 30, 2015

23 Nov, 2015, 16:00 ET from Biostar Pharmaceuticals, Inc.

XIANYANG, China, Nov. 23, 2015 /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, 2015.

During the fiscal third quarter of 2015, the Company recognized:

  • Net sales of $4.2 million, a decrease of approximately $10 million, or 71.2% as compared to the same period in 2014.
  • Gross profit decreased by approximately $6.2 million, or 88.3% for the three months ended September 30, 2015 as compared to the same period in 2014.
  • Sales of Shaanxi Weinan Products increased by approximately $0.8 million, or 204.9% as compared to the same period in 2014.
  • Net loss of $1.2 million as compared to net income of $0.2 million for the third quarter 2014.
  • R&D expenses were approximately $1million, as compared to $0.69 million for same period in 2014.

The Company experienced a material decrease in sales volume of all Aoxing Pharmaceutical Products during the three months ended September 30, 2015.  Aoxing Pharmaceutical experienced temporarily suspension in manufacturing to conduct maintenance on its production lines as part of its continued efforts to gain renewal of its GMP certification for its Aoxing Pharmaceutical production lines by January 2016, so that normal production can resume by February 2016. Net sales, and related gross profit both decreased significantly during the quarter ended September 30, 2015, as result of these maintenance efforts.

Mr. Ronghua Wang, Chairman and CEO of Biostar Pharmaceuticals, Inc. commented, "We are in the process of renewing our three GMP certifications and we currently expect the renewal process to be completed by January 2016. In the meantime, we have adopted a series of measures to help our company navigate this process by reducing operating expenses and improving cash management."

*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 timeframe 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, 2014, 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

September 30,

December 31,

2015

2014

(Unaudited)

ASSETS

Current Assets

Cash and cash equivalents

$

111,911

$

1,685,154

Accounts receivable, net

29,190,781

26,962,078

Inventories

632,086

673,989

Deposits and other receivables

2,009,399

4,471,992

Income tax recoverable

120,868

67,370

Loan receivables

9,443,168

9,772,464

Total Current Assets

41,508,213

43,633,047

Non-current Assets

Deposits

10,072,712

8,795,218

Deferred tax assets

7,390,160

7,065,523

Property and equipment, net

7,769,903

8,483,113

Intangible assets, net

11,726,635

13,270,330

Total Non-Current Assets

36,959,410

37,614,184

Total Assets

$

78,467,623

$

81,247,231

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

Accounts and other payables

$

7,502,145

$

5,001,086

Short-term bank loans

2,809,342

3,094,614

Value-added tax payable

48,515

432,885

Warrants liability

158,631

383,295

Total Current Liabilities

10,518,633

8,911,880

Commitment and contingencies

Stockholders' Equity

Common stock, $0.001 par value, 100,000,000 shares authorized,

   15,476,113 shares issued and outstanding as of

   September 30, 2015 and December 31, 2014

15,476

15,476

Additional paid-in capital

30,303,508

30,303,508

Statutory reserve

7,354,413

7,354,413

Retained earnings

26,362,672

28,269,956

Accumulated other comprehensive income

3,912,921

6,391,998

Total Stockholders' Equity

67,948,990

72,335,351

Total Liabilities and Stockholders' Equity

$

78,467,623

$

81,247,231

 

BIOSTAR PHARMACEUTICALS, INC

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)

Three months ended

September 30,

Nine months ended

September 30,

2015

2014

2015

2014

Sales, net

$

4,206,550

$

14,651,054

$

25,291,531

$

47,031,072

Cost of sales

3,390,439

7,674,053

14,955,491

23,533,445

Gross profit

816,111

6,977,001

10,336,040

23,497,627

Operating expenses:

Advertising expenses

-

2,290,277

3,838,912

6,397,644

Selling expenses

835,412

2,161,641

4,445,443

6,633,651

General and administrative expenses

682,972

1,651,457

2,672,351

6,360,681

Impairment loss on accounts receivables

-

-

-

2,155,357

Research and development expenses

998,746

690,189

3,043,535

2,074,621

Total operating expenses

2,517,130

6,793,564

14,000,241

23,621,954

(Loss) income from operations

(1,701,019)

183,437

(3,664,201)

(124,327)

Other income (expense)

Interest income

311,569

309,634

954,594

1,043,387

Interest expense

-

-

(62,290)

(82,855)

Fair value adjustment on warrants

144,210

(51,612)

224,664

341,550

Additional compensation received for the disposal of land use rights

-

-

1,099,292

Other income (expense)

546

45,469

2,065

(5,363)

456,325

303,491

1,119,033

2,396,011

(Loss) income before income taxes

(1,244,694)

486,928

(2,545,168)

2,271,684

Provision for income tax (recovery)

10,059

247,361

(637,884)

79,953

Net (loss) Income

$

(1,254,753)

$

239,567

$

(1,907,284)

$

2,191,731

Foreign currency translation adjustment

(3,140,062)

58,895

(2,479,077)

(376,135)

Comprehensive (loss) income

$

(4,394,815)

$

298,462

$

(4,386,361)

$

1,815,596

Net (loss) income per share

Basic

$

(0.08)

$

0.02

$

(0.12)

$

0.15

Diluted

(0.08)

0.02

(0.12)

0.15

Weighted average number of common shares outstanding

Basic

15,476,113

15,288,613

15,476,113

14,221,351

Diluted

15,476,113

15,288,613

15,476,113

14,223,014

 

BIOSTAR PHARMACEUTICALS, INC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Nine Months Ended September 30,

2015

2014

CASH FLOWS FROM OPERATING ACTIVITIES

Net (loss) income

$

(1,907,284)

$

2,191,731

Adjustments to reconcile net income to net cash used in operating activities:

Accrued interest income

(949,582)

(373,978)

Deferred tax benefit

(580,367)

(455,838)

Depreciation and amortization

1,005,498

2,468,737

Impairment loss on accounts receivable

-

2,155,357

Loss on disposal on property and equipment

-

3,274

Recognition of deferred research and development expenses

1,014,512

1,383,081

Stock-based compensation

-

1,954,650

Fair value adjustment on warrants

(224,664)

(341,550)

Provision for sales discount

1,478,124

-

Changes in operating assets and liabilities:

Accounts receivable

(4,696,508)

(12,064,808)

Inventories

19,794

85,394

Deposits and other receivables

2,319,480

1,671,704

Accounts payable and accrued expenses

2,753,073

1,249,789

Value-added tax payable

(381,380)

(342,315)

Income tax payable/recoverable

(57,517)

(129,671)

Net cash used in operating activities

(206,821)

(544,443)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment

(30,522)

(484,778)

Sales proceed of property, plant and equipment

-

2,929

Settlement of outstanding receivable from disposal of land use right

-

1,561,223

Deposit paid for intended acquisition

(1,623,219)

-

Net cash (used in) provided by investing activities

(1,653,741)

1,079,374

CASH FLOWS FROM FINANCING ACTIVITIES

(Repayment) Proceeds of bank loans

(186,670)

3,254,308

 

Advance from a related party

-

70,165

Proceeds from stock issuance and warrants

-

3,862,533

Net cash (used in) provided by financing activities

(186,670)

7,187,006

Effect of exchange rate changes on cash and cash equivalents

473,989

(2,821)

Net (decrease) increase in cash and cash equivalents

(1,573,243)

7,719,116

Cash and cash equivalents, beginning balance

1,685,154

80,072

Cash and cash equivalents, ending balance

$

111,911

$

7,799,188

SUPPLEMENTAL DISCLOSURES:

Interest received

$

5,012

$

669,409

Interest payments

$

(59,406)

$

(82,855)

Income tax (payments)

$

-

$

(665,463)

SOURCE Biostar Pharmaceuticals, Inc.