Biostar Pharmaceuticals, Inc. Announces Third Quarter 2014 Financial Results - Biostar Pharmaceuticals (OTC:BSPM)

XIANYANG, China, Nov. 14, 2014 /PRNewswire/ -- Biostar Pharmaceuticals, Inc. 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, 2014.

Highlights for the Third Quarter 2014

Net sales decreased by approximately $400,000 or 2.4% compared to the same period in 2013
Gross profit increased slightly by approximately $36,000 or 0.5% for the three months ended September 30, 2014
Cash, cash equivalents totaled $7.80 million as of September 30, 2014 compared to $80,072 as of December 31, 2013
Revenue from hospital products grew 76.4% to $3.10 million from $1.76 million compared to the same period of last year.

Mr. Ronghua Wang, Chairman and CEO of Biostar Pharmaceutical, commented, "In the past six months, we launched production of several new drugs which resulted in the revenue increases in from Aoxing new products in this quarter by 253.5%, as compared to the same period last year. Strengthening of the marketing campaign of our new products is intended to capture a larger market share in this industry," he continued. "In addition, the gross margin of Xin Ao Xing Oleanolic Acid Capsule, our flagship drug for the treatment of chronic Hepatitis B virus (HBV), increased to 82.8% from 58.6%."

"In the last three months of 2014, we are in the process of building our sales team to market Biostar's proprietary drug products to hospitals," Chairman Wang continued. "We continue our focus on new drug development and innovative sales and marketing as we believe it contributes to the strength of our Company going forward," he concluded.

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 Xin Aoxing Oleanolic 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 sustain its sales effort going forward, 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 for the gel capsule segment of its business, 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, 2013, 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.

BIOSTAR PHARMACEUTICALS, INC
CONSOLIDATED BALANCE SHEETS

	September 30,			December 31,
	2014			2013
	(Unaudited)
ASSETS

Current Assets
Cash and cash equivalents		$	7,799,188		$	80,072
Note receivable			-			1,636,072
Accounts receivable, net of allowance for doubtful accounts of $4,590,336 (December, 2013 : $2,454,108)			29,366,966			17,965,082
Inventories			739,464			830,311
Deposits and other receivables			719,594			5,282,574
Income tax recoverables			501,957			374,958
Loan receivables			10,041,596			9,816,433
Total Current Assets			49,168,765			35,985,502

Non-current Assets
Deposits			3,900,283			3,926,573
Deferred tax assets			3,225,768			2,789,175
Property and equipment, net			7,757,851			7,728,700
Intangible assets, net			14,927,548			17,134,494

Total Assets		$	78,980,215		$	67,564,444

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Accounts and other payables		$	5,665,811		$	4,447,314
Short-term bank loans			3,250,236			-
Value-added tax payable			-			344,191
Total Current Liabilities			8,916,047			4,791,505

Non-current Liability
Warrant liabilities			619,344			-
Total Liabilities			9,535,391			4,791,505

Commitment

Stockholders' Equity
Common stock, $0.001 par value, 100,000,000 shares authorized, 15,476,113 and 12,676,113 shares issued and outstanding as at September 30, 2014 and December 31, 2013			15,476			12,676
Additional paid-in capital			30,303,508			25,748,669
Deferred stock-based compensation			(66,367)			(365,017)
Statutory reserves			7,126,432			7,126,432
Retained earnings			25,841,456			23,649,725
Accumulated other comprehensive income			6,224,319			6,600,454
Total Stockholders' Equity			69,444,824			62,772,939

Total Liabilities and Stockholders' Equity		$	78,980,215		$	67,564,444

BIOSTAR PHARMACEUTICALS, INC
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(Unaudited)

	Three months ended September 30,				Nine months ended September 30,
	2014		2013		2014		2013

Sales, net	$	14,651,054	$	15,009,432	$	47,031,072	$	41,752,195
Cost of sales		7,674,053		8,068,096		23,533,445		21,242,519
Gross profit		6,977,001		6,941,336		23,497,627		20,509,676

Operating expenses:
Advertising expenses		2,290,277		931,938		6,397,644		5,368,890
Selling expenses		2,161,641		2,584,700		6,633,651		7,403,334
General and administrative expenses		1,651,457		1,867,707		8,516,038		4,404,273
Research and development expenses		690,189		811,009		2,074,621		2,412,623
Impairment of intangible assets		-		-		-		239,203
Total operating expenses		6,793,564		6,195,354		23,621,954		19,828,323

Income (loss) from operations		183,437		745,982		(124,327)		681,353

Other income (expense)
Interest income		309,634		348,281		960,532		1,134,916
Interest expense		-		(98,111)		-		(293,320)
Fair value adjustment on warrants		(51,612)		-		341,550		-
Other income (expense)		45,469		370		1,093,929		(1,093)
		303,491		250,540		2,396,011		840,503

Income before income taxes		486,928		996,522		2,271,684		1,521,856

Provision for income tax		247,361		608,705		79,953		1,305,056

Net Income		239,567		387,817	$	2,191,731	$	216,800

Foreign currency translation adjustment		58,895		1,336,712		(376,135)		1,774,545

Comprehensive income	$	298,462	$	1,724,529	$	1,815,596	$	1,991,345

Net income per share
Basic	$	0.02	$	0.03	$	0.15	$	0.02
Diluted		0.02		0.03		0.15		0.02

Weighted average number of common shares outstanding
Basic		15,288,613		12,024,685		14,221,351		11,197,451
Diluted		15,288,613		12,024,685		14,223,014		11,197,451

BIOSTAR PHARMACEUTICALS, INC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Nine Months Ended September 30,
	2014		2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	2,191,731	$	216,800
Adjustments to reconcile net income to net cash provided by operating activities:
Accrued interest		-		(1,072,394)
Deferred tax expense (benefit)		(455,838)		533,637
Depreciation and amortization		2,468,737		2,026,796
Provision for doubtful accounts		2,155,357		-
Loss on disposal		3,274
Recognition of deferred research and development expenses		1,383,081		2,412,623
Stock-based compensation		1,954,650		613,647
Warrant liability		(341,550)		-
Impairment of intangible assets		-		239,203

Changes in operating assets and liabilities:
Accounts receivable		(12,064,808)		9,250,156
Inventories		85,394		(340,375)
Deposits and other receivables		1,297,726		482,525
Accounts payable and accrued expenses		1,249,789		(641,335)
Value-added tax payable		(342,315)		(126,573)
Income tax payable/recoverable		(129,671)		113,299
Net cash (used in) provided by operating activities		(544,443)		13,708,009

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment		(484,778)		(978,377)
Deposit paid for research and development		-		(2,734,306)
Sales proceed of property, plant and equipment		2,929		-
Settlement of outstanding receivable from disposal of land use right		1,561,223		160,842
Net cash provided by (used in) investing activities		1,079,374		(3,551,841)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceed of bank loan		3,254,308		-
Advance from (repayment to) a related party		70,165		(1,608,415)
Proceeds from stock issuance and warrants		3,862,533		-
Net cash provided by (used in) financing activities		7,187,006		(1,608,415)

Effect of exchange rate changes on cash and cash equivalents		(2,821)		244,400

Net increase in cash and cash equivalents		7,719,116		8,792,153

Cash and cash equivalents, beginning balance		80,072		1,759,078
Cash and cash equivalents, ending balance	$	7,799,188	$	10,551,231

SUPPLEMENTAL DISCLOSURES:
Interest payments	$	(82,855)	$	(189,359)
Income tax payments	$	(665,463)	$	(658,120)
Interest received	$	669,409	$	1,134,916

SOURCE Biostar Pharmaceuticals, Inc.

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