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)
|
View original
content:http://www.prnewswire.com/news-releases/biostar-pharmaceuticals-inc-announces-its-quarterly-results-for-three-months-ended-june-30-2017-300556660.html
SOURCE Biostar Pharmaceuticals, Inc.