Biostar Pharmaceuticals, Inc. Announces Its Quarterly Results for Three Months Ended June 30, 2017

By , in PR PR Health on .

XIANYANG, China, Nov. 15, 2017 – 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
[email protected]
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.

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Brad Bennett

Brad Bennett

Brad grew up in a small town in northern Iowa. He studied chemistry in college, graduated, and married his wife one month later. They were then blessed with two baby boys within the first four years of marriage. Having babies gave their family a desire to return to the old paths – to nourish their family with traditional, homegrown foods; rid their home of toxic chemicals and petroleum products; and give their boys a chance to know a simple, sustainable way of life. They are currently building a homestead from scratch on two little acres in central Texas. There’s a lot to be done to become somewhat self-sufficient, but they are debt-free and get to spend their days living this simple, good life together with their five young children.
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