Aoxing Pharmaceutical Company Reports Third Quarter 2010 Financial and Operational Results
NEW YORK, NY--(Marketwire - May 18, 2010) - Aoxing Pharmaceutical Company (
Third Quarter 2010 Highlights:
- Successfully listed on the NYSE, AMEX under ticker "ANX"
- Entered into a Joint-venture agreement with Johnson Matthey Plc to focus on research, development, manufacturing & marketing API for narcotics & neurological drugs in China
- Strategic alliance with QRx Pharma Ltd. to collaborate in the development of two proprietary narcotic drugs for China & ex-China markets
- Our leading product for dental pain, Zhongtongan, continued to expand gross margins
- Continuous improvement of profitability and operating efficiency
Revenues for the three months ended March 31, 2010 were $1,561,915, comparable to the revenues of $1,587,989 realized during the three months ended March 31, 2009. Our product sales level remains low, due to the negative impact of our relocation and GMP re-certification of the LRT manufacturing facility started in the summer of 2009. This process has delayed our fulfillment of the purchase orders for those formulations manufactured in that facility. As of March 31, 2010, our new facility has successfully passed the GMP re-certification on capsule, tablet, granule and oral solution formulations, while we are preparing for re-certification on pill and tincture formulations.
General and administrative expenses were $916,912 in the three months ended March 31, 2010, or 15% higher than $797,954 in the three months ended March 31, 2009. The increase of general and administrative expenses reflects our ramp-up of operations in anticipation of growth in sales.
Our loss from operations decreased to $490,427 during the three months ended March 31, 2010 from $707,244 during the three months ended March 31, 2009. For the nine months ended March 31, 2010, loss from operations decreased to $1,140,030 from $1,747,956 during the nine months ended March 31, 2009. The 31% and 35% decreases in the loss were primarily due to the dominant role played by Zhongtongan in our sales as well as ongoing improvement of operational efficiency.
During the nine months ended March 31, 2010, net income attributable to the Company's shareholders was $3,181,148, as compared to a loss of $1,586,078 attributable to the Company's shareholders for the nine months ended March 31, 2009.
Mr. Zhenjiang Yue, Chairman and Chief Executive Officer of Aoxing Pharma, commented, "We are very pleased to report another successful quarter as we achieved a number of significant milestones and are well-positioned to take advantage of growth opportunities. We will continue to seek international business collaborations to expand our pipeline and product opportunities similar to the deals we announced with QRxPharma and Johnson Matthey."
About Aoxing Pharmaceutical Company, Inc.
Aoxing Pharmaceutical Company, Inc. is a US incorporated specialty pharmaceutical company with its main operations in China, specializing in research, development, manufacturing and distribution of a variety of narcotics and pain-management products. Headquartered in Shijiazhuang City, outside Beijing, Aoxing has the largest and most advanced manufacturing facility for highly regulated narcotic medicines. Its facility is one of the few GMP facilities licensed for the manufacture of narcotic medicines by the China State Food and Drug Administration (SFDA). It has strategic alliance partnership with QRxPharma and American Oriental Bioengineering, Inc. For more information: [ www.aoxingpharma.com ].
Safe Harbor Statement from Aoxing Pharmaceutical Company, Inc.
Statements made in this press release are forward-looking and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. The economic, competitive, governmental, technological and other risk factors identified in the Company's filings with the Securities and Exchange Commission, including the Form 10-K for the year ended June 30, 2009, may cause actual results or events to differ materially from those described in the forward-looking statements in this press release. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise.
AOXING PHARMACEUTICAL CO., INC. AND SUBSIDIARIES | |||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||
March 31, | June 30, | ||||||||
2010 | 2009 | ||||||||
(Unaudited) | |||||||||
ASSETS | |||||||||
CURRENT ASSETS: | |||||||||
Cash | $ | 3,212,657 | $ | 1,271,922 | |||||
Accounts receivable | 1,586,310 | 1,064,381 | |||||||
Inventory | 1,730,433 | 712,521 | |||||||
Deposits with suppliers | 950,851 | 252,128 | |||||||
Deferred tax assets | 2,715,600 | 3,331,045 | |||||||
Prepaid expenses and sundry current assets | 573,164 | 312,101 | |||||||
TOTAL CURRENT ASSETS | 10,769,014 | 6,944,098 | |||||||
LONG - TERM ASSETS | |||||||||
Property and equipment, net of accumulated depreciation | 24,934,322 | 29,324,362 | |||||||
Other intangible assets | 1,473,747 | 1,549,497 | |||||||
Goodwill | 18,947,063 | 18,926,527 | |||||||
TOTAL LONG-TERM ASSETS | 45,355,132 | 49,800,386 | |||||||
TOTAL ASSETS | $ | 56,124,146 | $ | 56,744,484 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
CURRENT LIABILITIES: | |||||||||
Short-Term borrowings | $ | 292,564 | $ | 292,193 | |||||
Accounts payable | 3,055,294 | 2,816,711 | |||||||
Deposit payable | - | 3,871,552 | |||||||
Current portion of long term debt - other | 419,830 | 144,635 | |||||||
Current portion of long term debt - related party | 668,580 | 4,494,629 | |||||||
Accrued expenses and taxes payable and other sundry current liabilities | 806,337 | 2,403,185 | |||||||
Loan payable - Bank | - | 6,094,428 | |||||||
Convertible debentures | 1,158,074 | 1,023,733 | |||||||
TOTAL CURRENT LIABILITIES | 6,400,679 | 21,141,066 | |||||||
LONG-TERM DEBT-- RELATED PARTY | 4,252,030 | 4,104,201 | |||||||
-- OTHER | 6,974,491 | 3,491,113 | |||||||
WARRANT AND DERIVATIVE LIABILITIES | 312,930 | 3,368,901 | |||||||
Common stock, par value $0.001, 100,000,000 shares authorized, 46,434,781 and 41,414,000 shares issued and outstanding at March 31, 2010 and June 30, 2009, respectively | 46,435 | 41,414 | |||||||
Additional paid in capital | 49,440,384 | 39,104,586 | |||||||
Accumulated deficit | (11,705,036 | ) | (14,791,039 | ) | |||||
Other comprehensive income | 497,377 | 461,017 | |||||||
TOTAL STOCKHOLDERS' EQUITY | 38,279,161 | 24,815,978 | |||||||
NONCONTROLLING INTEREST IN SUBSIDIARIES | (95,144 | ) | (218,189 | ) | |||||
TOTAL EQUITY | 38,184,016 | 24,597,789 | |||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 56,124,146 | $ | 56,703,070 | |||||
AOXING PHARMACEUTICAL CO., INC. AND SUBSIDIARIES | ||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||
For the three months ended | For the nine months ended | |||||||||||||||||
March 31, | March 31, | |||||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||||
SALES | $ | 4,565,009 | $ | 1,587,989 | $ | 4,565,009 | $ | 7,501,763 | ||||||||||
COST OF SALES | 1,365,069 | 1,070,086 | 1,365,069 | 4,339,126 | ||||||||||||||
GROSS PROFIT | 3,199,941 | 517,903 | 3,199,941 | 3,162,637 | ||||||||||||||
COSTS AND EXPENSES: | ||||||||||||||||||
Research and development expense | 506,133 | 143,197 | 506,133 | 483,434 | ||||||||||||||
General and administrative expenses | 2,619,899 | 797,954 | 2,619,899 | 2,787,746 | ||||||||||||||
Selling expenses | 885,236 | 169,809 | 885,236 | 1,293,344 | ||||||||||||||
Depreciation and amortization | 328,703 | 114,187 | 328,703 | 346,069 | ||||||||||||||
TOTAL COSTS AND EXPENSES | 4,339,970 | 1,225,147 | 4,339,970 | 4,910,593 | ||||||||||||||
LOSS FROM OPERATIONS | (1,140,030 | ) | (707,244 | ) | (1,140,030 | ) | (1,747,956 | ) | ||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||||
Interest expense | (1,545,940 | ) | (495,489 | ) | (1,545,940 | ) | (1,400,868 | ) | ||||||||||
Change in fair value of warrant and derivative liabilities | 3,055,971 | 1,502,314 | 3,055,971 | 506,028 | ||||||||||||||
Gain on foreign currency transactions | (8,033 | ) | (42,481 | ) | (8,033 | ) | 220,579 | |||||||||||
Loss on sale of assets | (21,415 | ) | (561,913 | ) | (21,415 | ) | (561,913 | ) | ||||||||||
Forgiveness of debt | 3,579,085 | 3,579,085 | 1,459,654 | |||||||||||||||
TOTAL OTHER INCOME (EXPENSE) | 5,059,667 | 402,431 | 5,059,667 | 223,480 | ||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES | 3,919,637 | (304,813 | ) | 3,919,637 | (1,524,476 | ) | ||||||||||||
Income taxes (credit) | 615,445 | 615,445 | (98,686 | ) | ||||||||||||||
NET INCOME (LOSS) | 3,304,192 | (304,813 | ) | 3,304,192 | (1,623,162 | ) | ||||||||||||
Minority interest in income of subsidiary | (24,764 | ) | 65,605 | 123,044 | 37,084 | |||||||||||||
INCOME (LOSS) ATTRIBUTABLE TO THE SHAREHOLDERS OF AOXING PHARMACEUTICAL CO. | 3,328,956 | -239,208 | 3,181,148 | -1,586,078 | ||||||||||||||
OTHER COMPREHENSIVE INCOME (LOSS) : | ||||||||||||||||||
Foreign currency translation adjustment | 26,426 | 159,152 | 36,360 | (222,626 | ) | |||||||||||||
COMPREHENSIVE INCOME (LOSS) | $ | 3,355,382 | (80,056 | ) | $ | 3,217,508 | (1,808,704 | ) | ||||||||||
BASIC AND DILUTED EARNINGS (LOSSES) PER COMMON SHARE | 0.07 | (0.00 | ) | 0.07 | -0.02 | |||||||||||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | 46,348,115 | 41,409,778 | 45,288,507 | 41,130,750 |