Biostar Pharmaceuticals, Inc. Announces Its Quarterly Results for Three Months Ended March 31, 2017

PR Newswire 19-May-2017 4:30 PM

XIANYANG, China, May 19, 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 first quarter ended March 31, 2017.

During the fiscal first quarter of 2017, the Company recognized:

  • No net sales, a decrease of approximately $0.8 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 $1.0 million as compared to net loss of $0.6 million for the same period in 2016.

The Company had no sales on all Aoxing Pharmaceutical Products in the three months ended March 31, 2017 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 second quarter of 2017 at which time the production is expected to resume. There is no assurance that the production lines at Aoxing will resume as expected and the renewal of GMP certificates will occur when anticipated, or even if such certificated are renewed, the Company will be able to return to the anticipated production levels, which, in turn, may have material adverse effects on our business, operations, financial performance and value of its securities. The Company also had no sales on Shaanxi Weinan's products during the first quarter of 2017 due to replacing production equipment to comply with government's environmental protection requirements. The Company currently anticipates that the production of Shaanxi Weinan products will resume in the second quarter 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 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 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 atwww.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+86-29-3368-6638office@aoxing-group.comhttp://www.biostarpharmaceuticals.com

BIOSTAR PHARMACEUTICALS, INC.

CONSOLIDATED BALANCE SHEETS

March 31,

December 31,

2017

2016

(Unaudited)

ASSETS

Current Assets

Cash and cash equivalents

$

483,858

$

173,290

Accounts receivable, net

5,555,998

6,741,454

Inventories

164,696

166,564

Deposits and other receivables

17,197

171,062

Value-added tax recoverable

48,139

41,462

Income tax recoverable

72,669

71,292

Total Current Assets

6,342,557

7,365,124

Non-current Assets

Deposits

21,312,776

21,148,284

Deferred tax assets, net

2,534,837

2,515,272

Property and equipment, net

5,817,166

5,866,612

Intangible assets, net

5,485,240

5,607,146

Total Non-Current Assets

35,150,019

35,137,314

Total Assets

$

41,492,576

$

42,502,438

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

Accounts and other payables

$

2,528,402

$

2,842,142

Short-term bank loans

2,343,732

2,325,643

Warrants liability

438,510

455,476

Total Current Liabilities

5,310,644

5,623,261

Commitment and contingencies

Stockholders' Equity

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

2,637

2,637

2,637,188 shares issued and outstanding as of

March 31, 2017 and December 31, 2016

Additional paid-in capital

31,382,467

31,382,467

Statutory reserve

7,354,413

7,354,413

Accumulated deficit

(3,555,141)

(2,540,991)

Accumulated other comprehensive income

997,556

680,651

Total Stockholders' Equity

36,181,932

36,879,177

Total Liabilities and Stockholders' Equity

$

41,492,576

$

42,502,438

BIOSTAR PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME

(Unaudited)

Three Months Ended March 31,

2017

2016

Sales, net

$

-

$

801,627

Cost of sales

-

456,657

Gross profit

-

344,970

Operating expenses:

Selling expenses

273,476

323,066

General and administrative expenses

766,325

690,422

Total operating expenses

1,039,801

1,013,488

Loss from operations

(1,039,801)

(668,518)

Other income (expense)

Interest income

1,304

-

Interest expense

(45,717)

(38,239)

Fair value adjustment on warrants

16,966

28,191

Recovery of provision for doubtful accounts

53,499

-

Other expense

(401)

-

Total other income (expense), net

25,651

(10,048)

Loss before income taxes

(1,014,150)

(678,566)

Provision for income tax (recovery)

-

(58,225)

Net Loss

$

(1,014,150)

$

(620,341)

Foreign currency translation adjustment

316,905

309,255

Comprehensive loss

$

(697,245)

$

(311,086)

Loss per share

Basic

$

(0.38)

$

(0.28)

Diluted

$

(0.38)

$

(0.28)

Weighted average number of common shares outstanding

Basic

2,637,188

2,210,913

Diluted

2,637,188

2,210,913

BIOSTAR PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Three Months Ended March 31,

2017

2016

CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES

Net loss

$

(1,014,150)

$

(620,341)

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

Depreciation and amortization

297,828

316,877

Fair value adjustment on warrants

(16,966)

(28,191)

Changes in operating assets and liabilities:

Accounts receivable

1,238,270

1,190,484

Inventories

3,164

(56,422)

Deposits and other receivables

155,242

-

Accounts payable and accrued expenses

(335,902)

(329,503)

Value-added tax payable

(6,357)

(71,857)

Income tax recoverable

-

(58,225)

Net cash provided by (used in) operating activities

321,129

342,822

CASH FLOWS USED IN INVESTING ACTIVITIES

-

-

CASH FLOWS USED IN FINANCING ACTIVITIES

Repayment of short-term bank loans

-

(282,725)

Net cash used in financing activities

-

(282,725)

Effect of exchange rate changes on cash and cash equivalents

(10,561)

(7,513)

Net increase (decrease) in cash and cash equivalents

310,568

52,584

Cash and cash equivalents, beginning balance

173,290

38,898

Cash and cash equivalents, ending balance

$

483,858

$

91,482

SUPPLEMENTAL DISCLOSURES:

Interest received

$

1,304

$

-

Interest paid

$

-

$

-

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SOURCE Biostar Pharmaceuticals, Inc.