Biostar Pharmaceuticals, Inc. Announces Its Quarterly Results for Three Months Ended June 30, 2017
XIANYANG, China, Nov. 15, 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 second quarter ended June 30, 2017.
During the fiscal second quarter of 2017, the Company recognized:
-- No net sales, a decrease of approximately $0.6 million or 100% as
compared to the same period in 2016.
-- No gross profit, a decreased of approximately $0.3 million or 100% as
compared to the same period in 2016.
-- Net loss of $1.3 million as compared to net loss of $6.9 million for the
same period in 2016.
The Company had no sales on all Aoxing Pharmaceutical products in the three months ended June 30, 2017 as Aoxing Pharmaceutical temporarily stopped production to conduct maintenance of its production lines to renew its GMP certificates. The application for the renewal of Aoxing Pharmaceutical's GMP certificates has been preliminarily approved and publicly announced by the local government in October 2017, subject to the final approval to be granted before the end of 2017, at which time the production is expected to resume. There is no assurance that the production lines at Aoxing will resume as and when expected and that the GMP certificates will be renewed as and when anticipated, or even if such certificates are renewed, the Company will be able to return to the anticipated production levels, which, in turn, may have material adverse effects on the Company's business, operations, financial performance and value of its securities. The Company also had no sales on Shaanxi Weinan's products during the second quarter of 2017 due to replacing production equipment to comply with government's environmental protection requirements. The Company currently anticipates resuming the production of Shaanxi Weinan production lines before the end of 2017. The above-referenced suspensions of the Company's production lines have 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. If the Company is unable to renew its GMP certificates and resume production as and when anticipated, its operations will be materially negatively affected and the Company might become insolvent, and the Company's revenues, operations and the value of its common stock and common stock equivalents would be materially negatively impacted; the Company may substantially curtail or cease its operations.
*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, including updated risk factors facing the Company.
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 GMP certification renewal process in the time frame as and when currently anticipated, the Company's ability to resume production as and when anticipated, its ability to resume and 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
office@aoxing-group.com
http://www.biostarpharmaceuticals.com
BIOSTAR PHARMACEUTICALS, INC.
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2017 2016
---- ----
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $407,410 $173,290
Accounts receivable, net - 6,741,454
Inventories 167,294 166,564
Deposits and other receivables 192,909 171,062
Value-added tax recoverable 50,541 41,462
Income tax recoverable 72,980 71,292
------ ------
Total Current Assets 891,134 7,365,124
------- ---------
Non-current Assets
Deposits 26,070,882 21,148,284
Deferred tax assets, net 2,574,809 2,515,272
Property and equipment, net 5,819,500 5,866,612
Intangible assets, net 5,420,996 5,607,146
--------- ---------
Total Non-Current Assets 39,886,187 35,137,314
---------- ----------
Total Assets $40,777,321 $42,502,438
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts and other payables $2,731,221 $2,842,142
Short-term bank loans 2,380,690 2,325,643
Warrants liability 179,070 455,476
------- -------
Total Current Liabilities 5,290,981 5,623,261
--------- ---------
Commitment and contingencies
Stockholders' Equity
Common stock, $0.001 par value, 100,000,000 shares
authorized, 2,637,188 shares issued and
outstanding as of June 30, 2017 and December 31,
2016 2,637 2,637
Additional paid-in capital 31,382,467 31,382,467
Statutory reserve 7,354,413 7,354,413
Accumulated deficit (4,869,527) (2,540,991)
Accumulated other comprehensive income 1,616,350 680,651
--------- -------
Total Stockholders' Equity 35,486,340 36,879,177
---------- ----------
Total Liabilities and Stockholders' Equity $40,777,321 $42,502,438
=========== ===========
BIOSTAR PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(Unaudited)
Three months ended June 30, Six months ended June 30,
--------------------------- -------------------------
2017 2016 2017 2016
---- ---- ---- ----
Sales, net $ - $620,138 $ - $1,421,765
Cost of sales - 321,250 - 777,907
--- ------- --- -------
Gross profit - 298,888 - 643,858
--- ------- --- -------
Operating expenses:
Selling expenses 12,208 290,047 285,684 613,113
General and administrative expenses 1,515,827 539,433 2,282,152 1,229,856
Provision for doubtful debt - 6,329,711 - 6,329,711
--- --------- --- ---------
Total operating expenses 1,528,035 7,159,191 2,567,836 8,172,680
--------- --------- --------- ---------
Loss from operations (1,528,035) (6,860,303) (2,567,836) (7,528,822)
---------- ---------- ---------- ----------
Other income (expense):
Interest income 3 - 1,308 -
Interest expense (45,905) (76) (91,622) (38,315)
Fair value adjustment on warrants 259,440 16,156 276,406 44,348
Other income 110 - 53,609 -
Other expense - - (401) -
--- --- ---- ---
Total other income, net 213,648 16,080 239,300 6,033
------- ------ ------- -----
Loss before income taxes (1314,387) (6,844,223) (2,328,536) (7,522,789)
Income tax expenses (benefits) - 58,225 - -
--- ------ --- ---
Net loss $(1,314,387) $(6,902,448) $(2,328,536) $(7,522,789)
=========== =========== =========== ===========
Foreign currency translation adjustment 618,794 (1,287,182) 935,699 (977,927)
------- ---------- ------- --------
Comprehensive loss $(695,593) $(8,189,630) $(1,392,837) $(8,500,716)
========= =========== =========== ===========
Net loss per share
Basic $(0.50) $(3.12) $(0.88) $(3.40)
====== ====== ====== ======
Diluted $(0.50) $(3.12) $(0.88) $(3.40)
====== ====== ====== ======
Weighted average number of common shares outstanding
Basic 2,637,188 2,210,913 2,637,188 2,210,913
========= ========= ========= =========
Diluted 2,637,188 2,210,913 2,637,188 2,210,913
========= ========= ========= =========
BIOSTAR PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30,
-------------------------
2017 2016
---- ----
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES
Net loss $(2,328,536) $(7,522,789)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 579,602 512,863
Allowance for doubtful debts - 6,329,711
Fair value adjustment on warrants (276,406) (44,348)
Changes in operating assets and liabilities:
Accounts receivable 6,809,977 1,497,574
Inventories 3,171 (89,451)
Deposits and other receivables (17,566) -
Accounts payable and accrued expenses (175,295) (223,052)
Value-added tax payable (7,991) (106,875)
------ --------
Net cash provided by operating activities 4,586,956 353,633
--------- -------
CASH FLOWS USED IN INVESTING ACTIVITIES
Deposit paid to intended acquisition (4,363,687) -
---------- ---
Net cash used in investing activities (4,363,687) -
---------- ---
CASH FLOWS USED IN FINANCING ACTIVITIES
Repayment of short-term bank loans - (282,903)
--- --------
Net cash used in financing activities - (282,903)
--- --------
Effect of exchange rate changes on cash and
cash equivalents 10,851 97,482
------ ------
Net increase in cash and cash equivalents 234,120 168,212
Cash and cash equivalents, beginning balance 173,290 38,898
------- ------
Cash and cash equivalents, ending
balance $407,410 $207,110
======== ========
SUPPLEMENTAL DISCLOSURES:
Interest received $1,308 $ -
Interest paid $ - $(38,315)
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SOURCE Biostar Pharmaceuticals, Inc.
