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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Biostar Pharmaceuticals Inc (CE) | USOTC:BSPM | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.0001 | 0.00 | 01:00:00 |
x
|
Quarterly Report Pursuant To Section 13 Or 15(d) Of The Securities Exchange Act Of 1934
|
¨
|
Transition Report Pursuant To Section 13 Or 15(d) of The Securities Exchange Act Of 1934
|
Maryland
|
20-8747899
|
|
(State or other jurisdiction of incorporation of origination)
|
(I.R.S. Employer Identification Number)
|
No. 588 Shiji Xi Avenue
Xianyang, Shaanxi Province
People’s Republic of China
|
712046
|
|
(Address of principal executive offices)
|
(Zip code)
|
Large accelerated filer
¨
|
Accelerated filer
¨
|
||
Non-accelerated filer
¨
|
Smaller reporting company
x
|
Page
|
||
PART I FINANCIAL INFORMATION
|
||
Item 1.
|
Financial Statements
|
|
F-1
|
||
F-2
|
||
F-3
|
||
F-4
|
||
F-5
|
||
Item 2.
|
3 | |
Item 3.
|
10 | |
Item 4.
|
10 | |
PART II OTHER INFORMATION
|
||
Item 1.
|
11 | |
Item 1A.
|
11 | |
Item 2.
|
11 | |
Item 3.
|
11 | |
Item 4.
|
11 | |
Item 5.
|
11 | |
Item 6.
|
12 | |
13 |
Three months ended March 31,
|
||||||||
2013
|
2012
|
|||||||
Sales, net
|
$ | 12,091,909 | $ | 15,899,541 | ||||
Cost of sales
|
5,403,019 | 5,063,150 | ||||||
Gross profit
|
6,688,890 | 10,836,391 | ||||||
Operating expenses:
|
||||||||
Advertising expenses
|
1,886,681 | 2,848,933 | ||||||
Selling expenses
|
2,197,346 | 2,907,801 | ||||||
General and administrative expenses
|
1,077,748 | 1,100,706 | ||||||
Research and development expenses
|
796,001 | 791,127 | ||||||
Total operating expenses
|
5,957,776 | 7,648,567 | ||||||
Income from operations
|
731,114 | 3,187,824 | ||||||
Other income (expense)
|
||||||||
Interest income
|
455,231 | 95,694 | ||||||
Interest expense
|
(95,688 | ) | (15,035 | ) | ||||
Other
|
(2,098 | ) | 248 | |||||
357,445 | 80,907 | |||||||
Income before income taxes
|
1,088,559 | 3,268,731 | ||||||
Provision for income tax
|
527,585 | 1,101,316 | ||||||
Net Income
|
$ | 560,974 | $ | 2,167,415 | ||||
Foreign currency translation adjustment
|
437,833 | 255,460 | ||||||
Comprehensive Income
|
$ | 998,807 | $ | 2,422,875 | ||||
Net income per share
|
||||||||
Basic and diluted
|
$ | 0.06 | $ | 0.23 | ||||
Weighted average number of common shares outstanding
|
||||||||
Basic and diluted
|
9,993,549 | 9,398,892 |
Common Stock - note 6)
|
||||||||||||||||||||||||||||
Shares
|
Amount
|
Additional
Paid-in Capital
|
Statutory Reserve
|
Retained Earnings |
Accumulated Other
Comprehensive Income
|
Total Stockholders' Equity
|
||||||||||||||||||||||
Balance, December 31, 2011 (Audited)
|
9,400,216 | 9,400 | 22,445,660 | 6,490,600 | 43,473,834 | 3,982,206 | 76,401,700 | |||||||||||||||||||||
Stock-based compensation
|
593,333 | 593 | 821,116 | - | - | - | 821,709 | |||||||||||||||||||||
Transfer to statutory reserve
|
- | - | - | 246,768 | (246,768 | ) | - | - | ||||||||||||||||||||
Net loss for the year
|
- | - | - | - | (19,997,323 | ) | - | (19,997,323 | ) | |||||||||||||||||||
Foreign currency translation adjustment
|
- | - | - | - | - | 546,662 | 546,662 | |||||||||||||||||||||
Balance, December 31, 2012 (Audited)
|
9,993,549 | 9,993 | 23,266,776 | 6,737,368 | 23,229,743 | 4,528,868 | 57,772,748 | |||||||||||||||||||||
Stock-based compensation
|
- | - | 6,147 | - | - | - | 6,147 | |||||||||||||||||||||
Net income for the three months
|
- | - | - | - | 560,974 | - | 560,974 | |||||||||||||||||||||
Foreign currency translation adjustment
|
- | - | - | - | - | 437,833 | 437,833 | |||||||||||||||||||||
Balance, March 31, 2013 (Unaudited)
|
9,993,549 | $ | 9,993 | $ | 23,272,923 | $ | 6,737,368 | $ | 23,790,717 | $ | 4,966,701 | $ | 58,777,702 |
Three months ended March 31,
|
||||||||
2013
|
2012
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net income
|
$ | 560,974 | $ | 2,167,415 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Accrued interest
|
(449,075 | ) | - | |||||
Deferred tax assets
|
360,387 | 516,128 | ||||||
Depreciation and amortization
|
458,931 | 456,376 | ||||||
Recognition of deferred research and development expenses
|
796,001 | 791,127 | ||||||
Stock-based compensation
|
6,147 | 43,282 | ||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
5,457,403 | 716,639 | ||||||
Inventories
|
(562,015 | ) | 428,007 | |||||
Deposits and other receivables
|
(764,161 | ) | 43 | |||||
Accounts payable and accrued expenses
|
507,140 | 1,761,799 | ||||||
Value-added tax payable
|
(170,796 | ) | (67,397 | ) | ||||
Income tax payable/recoverable
|
(21,547 | ) | (1,065,938 | ) | ||||
Exchange difference
|
- | (901 | ) | |||||
Net cash provided by operating activities
|
6,179,389 | 5,746,580 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Purchase of property and equipment
|
(4,352 | ) | - | |||||
Payment for acquisition of Shaanxi Weinan
|
- | (822,173 | ) | |||||
Net cash (used in) investing activities
|
(4,352 | ) | (822,173 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Repayment to a related party
|
(1,592,002 | ) | - | |||||
Net cash (used in) financing activities
|
(1,592,002 | ) | - | |||||
Effective of exchange rate changes on cash and cash equivalents
|
115,013 | 74,062 | ||||||
Net increase in cash and cash equivalents
|
4,698,048 | 4,998,469 | ||||||
Cash and cash equivalents, beginning balance
|
1,759,078 | 16,971,789 | ||||||
Cash and cash equivalents, ending balance
|
$ | 6,457,126 | $ | 21,970,258 | ||||
SUPPLEMENTAL DISCLOSURES:
|
||||||||
Interest received
|
$ | 6,945 | $ | - | ||||
Interest payments
|
$ | 93,132 | $ | - | ||||
Income tax payments
|
$ | 188,745 | $ | 1,660,292 |
n
|
Shaanxi Biostar has the full right to control and administer the financial affairs and daily operation of Aoxing Pharmaceutical and has the right to manage and control all assets of Aoxing Pharmaceutical. The registered owners of Aoxing Pharmaceutical as a group have no right to make any decision about Aoxing Pharmaceutical’s activities without the consent of Shaanxi Biostar.
|
n
|
Shaanxi Biostar is assigned all voting rights of Aoxing Pharmaceutical and has the right to appoint all directors and senior management personnel of Aoxing Pharmaceutical. The registered owners of Aoxing Pharmaceutical possess no substantive voting rights.
|
n
|
Shaanxi Biostar is committed to provide financial support if Aoxing Pharmaceutical requires additional funds to maintain its operations and to repay its debts.
|
n
|
Shaanxi Biostar is entitled to a management fee equal to Aoxing Pharmaceutical’s net profits and is obligated to assume all operation risks and bear all losses of Aoxing Pharmaceutical. Therefore, Shaanxi Biostar is the primary beneficiary of Aoxing Pharmaceutical.
|
March 31,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
Raw materials
|
$
|
425,203
|
$
|
405,900
|
||||
Work in process
|
219,440
|
125,007
|
||||||
Finished goods
|
513,331
|
193,145
|
||||||
Goods in transit
|
256,488
|
123,083
|
||||||
$
|
1,414,462
|
$
|
847,135
|
Buildings
|
30 years
|
Building improvements
|
30 years
|
Machinery & equipment
|
5-10 years
|
Furniture & fixtures and vehicles
|
5-10 years
|
March 31,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
Buildings
|
$
|
3,559,116
|
$
|
3,539,652
|
||||
Building improvements
|
1,980,672
|
1,969,840
|
||||||
Machinery & equipment
|
1,178,193
|
1,167,414
|
||||||
Furniture & fixtures
|
67,108
|
66,741
|
||||||
Vehicle
|
130,918
|
130,202
|
||||||
Construction in progress
|
2,095,423
|
2,083,964
|
||||||
9,011,430
|
8,957,813
|
|||||||
Less: Accumulated depreciation
|
(2,099,196
|
)
|
(1,977,292
|
)
|
||||
$
|
6,912,234
|
$
|
6,980,521
|
Land use rights
|
50 years
|
Proprietary technologies
|
10 years
|
March 31,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
Land use rights
|
$
|
3,448,863
|
$
|
3,430,002
|
||||
Proprietary technologies
|
8,962,142
|
8,913,131
|
||||||
12,411,005
|
12,343,133
|
|||||||
Less: Accumulated amortization
|
(3,553,335
|
)
|
(3,206,694
|
)
|
||||
$
|
8,857,670
|
$
|
9,136,439
|
Years Ending December 31,
|
||||
2013 (9 months)
|
$
|
1,039,923
|
||
2014
|
1,386,564
|
|||
2015
|
1,386,564
|
|||
2016
|
1,386,564
|
|||
2017
|
173,214
|
|||
Thereafter
|
3,484,841
|
March 31,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
Current portion
|
||||||||
Deposits paid for research and development of new medicine - note 9b)
|
$
|
2,390,781
|
$
|
3,170,275
|
||||
Deposits paid for advertising
|
1,243,206
|
475,542
|
||||||
Other receivables*
|
4,117,372
|
4,094,856
|
||||||
Prepaid expenses and other receivables
|
$
|
7,751,359
|
$
|
7,740,673
|
||||
Non-current portion
|
||||||||
Deposits paid to former equity holders of Shaanxi Weinan to acquire drug approval numbers - note 11)
|
$
|
8,766,198
|
$
|
8,718,258
|
||||
$
|
8,766,198
|
$
|
8,718,258
|
Balance as at
|
||||||||||
Inception date
|
Details
|
March 31, 2013
|
December 31, 2012
|
|||||||
October 24, 2012
|
RMB 10,000,000, one year term loan, annual interest rate at7.80%
|
$ | 1,593,854 | $ | 1,585,137 | |||||
November 8, 2012
|
RMB 10,000,000, one year term loan, annual interest rate at7.80%
|
1,593,854 | 1,585,138 | |||||||
December 5, 2012
|
RMB 10,000,000, one year term loan, annual interest rate at7.80%
|
1,593,854 | 1,585,138 | |||||||
Total
|
$ | 4,781,562 | $ | 4,755,413 |
Outstanding as at,
|
||||||||||||
Expiry date
|
Exercise Price
|
March 31, 2013
|
December 31, 2012
|
|||||||||
May 31, 2013
|
6.00 | 18,333 | 18,333 | |||||||||
June 30, 2014
|
8.22 | 10,784 | 10,784 | |||||||||
November 1, 2014*
|
9.00 | 166,667 | 166,667 | |||||||||
195,784 | 195,784 |
Weighted Average
|
||||||||||||
Number of options
|
Exercise Price ($)
|
Remaining Life (years)
|
||||||||||
Balance, December 31, 2011
|
362,222 | 8.22 | 2.94 | |||||||||
Granted, April 20, 2012
|
24,000 | 1.68 | 4.27 | |||||||||
Balance, December 31, 2012
|
386,222 | 7.81 | 2.08 | |||||||||
Balance, March 31, 2013
|
386,222 | 7.81 | 1.83 | |||||||||
Vested as at December 31, 2012
|
357,777 | 7.40 | 1.59 | |||||||||
Vested as at March 31, 2013
|
357,777 | 7.40 | 1.37 | |||||||||
Unvested as at December 31, 2012
|
28,445 | 2.64 | 3.80 | |||||||||
Unvested as at March 31, 2013
|
28,445 | 2.64 | 3.55 |
a)
|
Research and Development on clinical trials
|
b)
|
Capital commitments
|
Three Months Ended March 31,
|
Increase (Decrease) due to changes in
|
|||||||||||||||||||
2013
|
2012
|
Product offering
|
Sales volume
|
Sales price
|
||||||||||||||||
Aoxing Pharmaceutical Products
|
||||||||||||||||||||
Xin Aoxing Oleanolic Acid Capsule
|
$ | 5,443,928 | $ | 10,388,009 | $ | - | $ | (5,438,584 | ) | $ | 494,503 | |||||||||
Other Aoxing Pharmaceutical products
|
2,502,174 | 3,315,975 | - | (667,068 | ) | (146,733 | ) | |||||||||||||
New product
|
110,155 | - | 110,155 | - | - | |||||||||||||||
Temporarily discontinued (4 products)
|
- | 622,840 | (622,840 | ) | - | - | ||||||||||||||
Sub-total
|
8,056,257 | 14,326,824 | (512,685 | ) | (6,105,652 | ) | 347,770 | |||||||||||||
Shaanxi Weinan Products
|
||||||||||||||||||||
Shaanxi Weinan products
|
1,639,478 | 1,563,653 | 177,100 | (101,275 | ) | |||||||||||||||
New products
(5 products)
|
443,736 | - | 443,736 | - | - | |||||||||||||||
Sub-total
|
2,083,214 | 1,563,653 | 443,736 | 177,100 | (101,275 | ) | ||||||||||||||
Hospital products
|
1,952,438 | - | 1,952,438 | - | - | |||||||||||||||
Medical device
|
- | 9,064 | (9,064 | ) | - | - | ||||||||||||||
Total sales
|
$ | 12,091,909 | $ | 15,899,541 | $ | 1,874,425 | $ | (5,928,552 | ) | $ | 246,495 |
Three Months Ended March 31,
|
Increase (Decrease) due to changes in
|
|||||||||||||||||||
2013
|
2012
|
Product offering
|
Sales volume
|
Product cost
|
||||||||||||||||
Aoxing Pharmaceutical Products
|
||||||||||||||||||||
Xin Aoxing Oleanolic Acid Capsule
|
$ | 1,367,670 | $ | 2,135,507 | $ | - | $ | (1,366,327 | ) | $ | 598,490 | |||||||||
Other Aoxing Pharmaceutical products
|
1,666,223 | 1,895,158 | - | (407,200 | ) | 178,265 | ||||||||||||||
New Product
|
79,659 | - | 79,659 | - | - | |||||||||||||||
Temporarily discontinued (4 products)
|
- | 302,490 | (302,490 | ) | - | - | ||||||||||||||
Sub-total
|
3,113,552 | 4,333,155 | (222,831 | ) | (1,773,527 | ) | 776,755 | |||||||||||||
Shaanxi Weinan Products
|
||||||||||||||||||||
Shaanxi Weinan products
|
703,896 | 723,568 | - | 76,770 | (96,442 | ) | ||||||||||||||
New Products
(5 products)
|
191,827 | - | 191,827 | - | - | |||||||||||||||
Sub-total
|
895,723 | 723,568 | 191,827 | 76,770 | (96,442 | ) | ||||||||||||||
Hospital products
|
1,393,744 | - | 1,393,744 | - | - | |||||||||||||||
Medical device
|
- | 6,427 | (6,427 | ) | - | - | ||||||||||||||
Total cost of sales
|
$ | 5,403,019 | $ | 5,063,150 | $ | 1,356,313 | $ | (1,696,757 | ) | $ | 680,313 |
Three Months Ended March 31, | ||||||||||||||||
2013
|
2012
|
|||||||||||||||
Gross Profit
|
Product Gross Margin %
|
Gross Profit | Product Gross Margin% | |||||||||||||
Aoxing Pharmaceutical Products
|
||||||||||||||||
Xin Aoxing Oleanolic Acid Capsule
|
$ | 4,076,258 | 74.9 | % | $ | 8,252,502 | 79.4 | % | ||||||||
Other Aoxing Pharmaceutical products
|
835,951 | 33.4 | % | 1,420,817 | 42.8 | % | ||||||||||
New Product
|
30,496 | 27.7 | % | - | - | |||||||||||
Temporarily discontinued (4 products)
|
- | - | 320,350 | 51.4 | % | |||||||||||
Sub-total
|
4,942,705 | 61.4 | % | 9,993,669 | 69.8 | % | ||||||||||
Shaanxi Weinan Products
|
||||||||||||||||
Shaanxi Weinan products
|
935,582 | 57.1 | % | 840,085 | 53.7 | % | ||||||||||
New Product (5 products)
|
251,909 | 56.8 | % | - | - | |||||||||||
Sub-total
|
1,187,491 | 57.0 | % | 840,085 | 53.7 | % | ||||||||||
Hospital products
|
558,694 | 28.6 | % | - | - | |||||||||||
Medical device
|
- | - | 2,637 | 29.1 | % | |||||||||||
Total gross profit
|
$ | 6,688,890 | 55.3 | % | $ | 10,836,391 | 68.2 | % |
Three Months Ended March 31, | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Operating expenses | % of net sales | Operating expenses | % of net sales | % change | ||||||||||||||||
Advertising expenses
|
$ | 1,886,681 | 15.6 | % | $ | 2,848,933 | 17.9 | % | (33.8 | %) | ||||||||||
Selling expenses
|
2,197,346 | 18.2 | % | 2,907,801 | 18.3 | % | (24.4 | %) | ||||||||||||
General and administrative expenses
|
1,071,601 | 8.9 | % | 1,057,424 | 6.7 | % | 1.3 | % | ||||||||||||
Research and development expenses
|
796,001 | 6.6 | % | 791,127 | 5.0 | % | 0.6 | % | ||||||||||||
Total operating expenses
|
$ | 5,951,629 | 49.2 | % | $ | 7,605,285 | 47.8 | % | (21.7 | %) |
1.
|
If after taking legal action, it appears that an accounts receivable is not likely to become collectible, such accounts receivable will be written off if it is more than two years old.
|
2.
|
If during the collection period, the customer provides bankruptcy or other insolvency documentation, the corresponding accounts receivable will be written off.
|
3.
|
If we are no longer able to locate a particular customer in order for us to take any collection or legal actions, the accounts receivable for such customer will be written off if it is more than two years old.
|
Payments due by period ($ million)
|
||||||||||||||||||||
Total
|
Within 1 year
|
1-3 years
|
3-5 years
|
>5 years
|
||||||||||||||||
Short-term bank loan
|
$ | 4.8 | $ | 4.8 | $ | - | - | - | ||||||||||||
Research and development contracts
|
3.5 | 0.8 | 2.7 | - | - | |||||||||||||||
Total contractual obligations
|
$ | 8.3 | $ | 5.6 | $ | 2.7 | - | - |
Exhibit Number
|
Description
|
3.1
|
Articles of Incorporation filed with the corporate secretary of State of the State of Maryland on March 27, 2007 (1)
|
3.2
|
Articles of Amendment filed with the corporate secretary of State of the State of Maryland on August 1, 2007 (1)
|
3.3
|
Articles of Amendment filed with the corporate secretary of State of the State of Maryland on September 14, 2007 (1)
|
3.4
|
Certificate of Designation for the Series B Convertible Preferred Stock as filed with the corporate secretary of State of Maryland on November 2, 2009 (2)
|
3.5
|
Articles of Amendment to the Articles of Incorporation of Biostar Pharmaceuticals, Inc. (3)
|
3.6
|
Bylaws (1)
|
4.1
|
2009 Incentive Stock Plan ** (4)
|
4.2
|
2011 Stock Option Compensation Plan (5)**
|
4.3
|
2012 Stock Option Compensation Plan (6) **
|
31.1
|
|
31.2
|
|
32.1
|
|
32.2
|
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
101.CAL
|
XBRL Taxonomy Calculation Linkbase
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
101.DEF
|
XBRL Taxonomy Extension Definition Document
|
(1)
|
Previously filed as an exhibit to the Company’s Registration Statement on Form SB-2 (File No. 333-147363) filed with the SEC on November 13, 2007.
|
(2)
|
Previously filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on November 3, 2009.
|
(3)
|
Incorporated by reference from the Company’s Current Report on Form 8-K filed with the SEC on April 4, 2012.
|
(4)
|
Incorporated by reference from the Company’s Schedule 14A filed with the SEC on October 1, 2010.
|
(5)
|
Incorporated by reference from the Company’s Registration Statement on Form S-8 filed with the SEC on August 17, 2012.
|
(6)
|
Incorporated by reference from the Company’s Proxy Statement on Schedule 14A filed with the SEC on September 21, 2012.
|
BIOSTAR PHARMACEUTICALS, INC.
|
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Date: May 15, 2013
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By:
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/s/ Ronghua Wang
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Ronghua Wang
Chief Executive Officer and President
(Principal Executive Officer)
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Date: May 15, 2013
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By:
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/s/ Qinghua Liu
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Qinghua Liu
Interim Chief Financial Officer
(Principal Financial and Accounting Officer)
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