News | News By Subject | News by Disease News By Date | Search News
Get Our FREE
Industry eNewsletter
email:    
   

China Aoxing Pharmaceutical Corp. (CAXG) Reports Second Quarter 2010 Financial and Operational Results



2/17/2010 10:35:21 AM

NEW YORK, NY--(Marketwire - February 17, 2010) -

China Aoxing Pharmaceutical Company, Inc. (OTCBB: CAXG) ("China Aoxing"), a China-based pharmaceutical company specializing in research, development, manufacturing and distribution of narcotic and pain-management products, today announced financial and operational results for the three months ended December 31, 2009, or the second quarter of fiscal year 2010.

Second Quarter 2010 Highlights:

-- Successful restructuring Bank of China loan with forgiveness of $3,579,085 in from bond holders -- Continuous improvement of operating efficiency with record low operating loss -- Completed Phase II clinical study for oral TJSL capsules, a novel investigational drug to treat primary dysmenorrhea, or menstrual pain, in adult women -- Completed pivotal clinical trial of Tilidine for acute and chronic treatments of moderate to severe pain -- Received GMP re-certification for four dosage forms at new manufacturing facility

Revenues for the three months ended December 31, 2009 were $1,556,431, a 33% decrease from the revenues of $2,315,709 realized during the three months ended December 31, 2008. The decrease in revenue was impacted by the relocation of the LRT manufacturing facility in the summer of 2009. The consolidation of the LRT facility necessitated GMP re-certification of six formulations at the new facility, delaying fulfillment of the purchase orders for those formulations. As of December 31, 2009, the new facility has successfully passed the GMP re-certification on capsule, tablet, granule and oral solution formulations while re-certification on pill and tincture formulations is expected to conclude in the first half of 2010.

General and administrative expenses were $825,503 in the three months ended December 31, 2009, similar to $796,900 in the three months ended December 31, 2008.

During the three months ended in December 31, 2009, the company continued to improve its profitability and operating efficiency. Loss from operations decreased to $285,225 during the three months ended December 31, 2009, or a 39% reduction from $466,735 incurred during the three months ended December 31, 2008.

Net income for the three months ended December 31, 2009 was $5,446,154, and income attributable to the Company after 5% minority interest was $5,282,170, mainly attributable to the forgiveness of debt and the decrease in the fair value of the outstanding financial derivatives. In comparison, during the three months ended December 31, 2008, the recorded net loss was $1,999,699, and the Company recorded net loss in the amount of $1,972,987 after 5% minority interest and an expense of $1,144,012 attributable to the increase in the fair value of the outstanding financial derivatives.

Mr. Zhenjiang Yue, Chairman and Chief Executive Officer of China Aoxing, commented, "We are very pleased with our financial and business results of this period. As promised, we successfully restructured our capital structure and improved our financial condition significantly, forming the important basis of our future business expansion. The GMP re-certification of four dosage forms at our manufacturing facility is an important step and will help alleviate product backlog. We are excited about the prospects for our business in 2010 and will continue advancing the new generation of narcotics and pain medicine into the market place in China."

About China Aoxing Pharmaceutical Company, Inc.

China Aoxing Pharmaceutical Company, Inc. (OTCBB: CAXG) is a pharmaceutical company specializing in research, development, manufacturing and distribution of a variety of narcotics and pain-management products. It has a strategic alliance with American Oriental Bioengineering, Inc. (NYSE: AOB). Headquartered in Shijiazhuang City, the pharmaceutical capital of China, outside of Beijing, China Aoxing has China's largest and the most advanced manufacturing facility for highly regulated narcotic medicines, addressing a very under-served and fast-growing market in China. Its facility is one of the few GMP facilities licensed for narcotics medicines. The Company is working closely with the Chinese government and SFDA to assure the strictly regulated availability to medical professionals of its narcotic drugs and pain medicines throughout China.

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.

CHINA AOXING PHARMACEUTICAL CO., INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, June 30, 2009 2009 (Unaudited) ASSETS CURRENT ASSETS: Cash $ 6,383,715 $ 1,271,922 Accounts receivable 1,252,030 1,064,381 Inventory 1,127,255 712,521 Deposits with suppliers 378,432 261,780 Deferred tax assets 2,119,730 3,331,045 Prepaid expenses and sundry current assets 376,983 302,449 ------------ ------------ TOTAL CURRENT ASSETS 11,638,145 6,944,098 ------------ ------------ LONG - TERM ASSETS Property and equipment, net of accummulated depreciation 24,438,138 29,324,362 Other intangible assets 1,502,868 1,549,497 Goodwill 18,944,464 18,926,527 ------------ ------------ TOTAL LONG-TERM ASSETS 44,885,470 49,800,386 ------------ ------------ TOTAL ASSETS $ 56,523,615 $ 56,744,484 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Short-Term borrowings $ 292,517 $ 292,193 Accounts payable 3,056,835 2,816,711 Deposit payable - 3,871,552 Current portion of long term debt - other 46,803 144,635 Current portion of long term debt - related party 111,208 4,494,629 Accrued expenses and taxes payable and other sundry current liabilities 1,025,402 2,403,185 Loan payable - Bank - 6,094,428 Convertible debentures 1,113,294 1,023,733 ------------ ------------ TOTAL CURRENT LIABILITIES 5,646,059 21,141,066 ------------ ------------ LONG-TERM DEBT-- RELATED PARTY 4,825,431 4,104,201 ------------ ------------ -- OTHER 7,346,328 3,491,113 ------------ ------------ WARRANT AND DERIVATIVE LIABILITIES 887,369 3,368,901 ------------ ------------ Common stock, par value $0.001, 100,000,000 shares authorized, 91,669,562 and 82,827,999 shares issued and outstanding at December 31, 2009 and June 30, 2009, respectively 91,670 82,828 Preferred stock, par value $0.001 300,000 shares authorized 0 shares issued and outstanding at December 31,2009 and June 30, 2009, respectively - - Additional paid in capital 49,200,045 39,104,586 Accumulated deficit (11,873,857) (14,791,039) Other comprehensive income 470,951 461,017 ------------ ------------ TOTAL STOCKHOLDERS' EQUITY 37,888,809 24,857,392 NONCONTROLLING INTEREST IN SUBSIDIARIES (70,381) (218,189) ------------ ------------ TOTAL EQUITY 37,818,428 24,639,203 ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 56,523,615 $ 56,744,484 ============ ============ CHINA AOXING PHARMACEUTICAL CO., INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS) (UNAUDITED) For the three months ended For the six months ended December 31, December 31, 2009 2008 2009 2008 SALES $ 1,556,431 $ 2,315,709 $ 3,003,094 $ 5,913,774 COST OF SALES 540,516 1,331,695 990,659 3,269,040 ------------ ------------ ------------ ------------ GROSS PROFIT 1,015,915 984,014 2,012,435 2,644,734 ------------ ------------ ------------ ------------ COSTS AND EXPENSES: Research and development expense 78,761 73,907 192,064 340,236 General and administrative expenses 825,503 796,900 1,702,987 1,989,792 Selling expenses 287,404 492,518 548,297 1,123,536 Depreciation and amortization 109,473 87,424 218,690 231,882 ------------ ------------ ------------ ------------ TOTAL COSTS AND EXPENSES 1,301,141 1,450,749 2,662,038 3,685,446 ------------ ------------ ------------ ------------ LOSS FROM OPERATIONS (285,226) (466,735) (649,603) (1,040,712) ------------ ------------ ------------ ------------ OTHER INCOME (EXPENSE): Interest expense (451,070) (429,884) (1,043,155) (905,378) Change in fair value of warrant and derivative liabilities 4,623,692 (1,144,012) 2,481,533 (996,285) Gain on foreign currency transactions 241 60,481 241 263,518 Loss on sale of assets 0 - (21,415) Forgiveness of debt 3,579,085 (555) 3,579,085 1,459,196 ------------ ------------ ------------ ------------ TOTAL OTHER INCOME (EXPENSE) 7,751,948 -1,513,970 4,996,289 (178,949) ------------ ------------ ------------ ------------ INCOME (LOSS) BEFORE INCOME TAXES 7,466,722 (1,980,705) 4,346,686 (1,219,661) Income taxes (credit) 2,020,568 18,994 1,211,315 98,687 ------------ ------------ ------------ ------------ NET INCOME (LOSS) 5,446,154 (1,999,699) 3,135,371 (1,318,348) Noncontrolling interest in subsidiaries 163,984 (26,712) 147,808 28,520 ------------ ------------ ------------ ------------ INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY 5,282,170 (1,972,987) 2,987,563 (1,346,868) OTHER COMPREHENSIVE INCOME (LOSS): Foreign currency translation adjustment (27,744) (408,127) 9,934 (381,778) ------------ ------------ ------------ ------------ COMPREHENSIVE INCOME (LOSS) $ 5,254,426 $ (2,381,114) $ 2,997,497 (1,728,646) ============ ============ ============ ============ BASIC AND DILUTED EARNINGS (LOSSES) PER COMMON SHARE 0.06 (0.02) 0.03 (0.02) ============ ============ ============ ============ WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 91,669,562 82,771,294 89,540,442 81,988,536 ============ ============ ============ ============ CHINA AOXING PHARMACEUTICAL CO., INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) For the six months ended December 31, 2009 2008 OPERATING ACTIVITIES: Net income (loss) $ 2,987,563 $ (1,346,868) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 538,657 601,310 Deferred tax assets 1,211,315 - Loss on sale of assets 21,416 - Forgiveness of debt (3,640,718) (1,459,196) Non-cash interest expense related to debentures and warrants 89,561 125,810 Stock issued for services 273,454 520,187 Change in fair value of warrants and derivative liability (2,481,533) 996,285 Minority interest 147,808 28,520 Changes in operating assets and liabilities: Accounts receivable (189,611) 237,456 Inventories (413,919) (32,383) Prepaid expenses and sundry current assets (187,396) (200,211) Accounts payable 122,885 28,006 Accrued expenses, taxes and sundry current liabilities 922,215 (1,569,960) ------------ ------------ NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (598,303) (2,071,044) ------------ ------------ INVESTING ACTIVITIES: Acquisition of property and equipment (420,692) (1,021,280) Cash received from sale of assets 950,626 - ------------ ------------ NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 529,934 (1,021,280) ------------ ------------ FINANCING ACTIVITIES: Repayment of bank loan (4,270,485) Proceeds Other borrowings 3,753,122 2,989,634 Loans from related party 715,504 - Sale of common stock 5,000,000 - ------------ ------------ NET CASH PROVIDED BY FINANCING ACTIVITIES 5,198,141 2,989,634 ------------ ------------ EFFECT OF EXCHANGE RATE ON CASH (17,979) (342,551) ------------ ------------ INCREASE (DECREASE) IN CASH 5,111,793 (445,241) CASH - BEGINNING OF PERIOD 1,271,922 1,565,513 ------------ ------------ CASH - END OF PERIOD $ 6,383,715 1,120,272 ============ ============ Supplemental disclosures of cash flow information: Non-cash financing activities: Conversion of AOB loan and accrued interest into common stock 4,830,847 - ============ ============ Conversion of convertible debentures into common stock - 290,000 ============ ============ Common stock issued as payment for accrued interest - 25,570 ============ ============


Investor Relations Contact:

Brian Korb
Vice President
The Troup Group LLC
Tel: +1 646 378 2923
Email: bkorb@troutgroup.com

Website: www.chinapainmed.com


Read at BioSpace.com


comments powered by Disqus
   

ADD TO DEL.ICIO.US    ADD TO DIGG    ADD TO FURL    ADD TO STUMBLEUPON    ADD TO TECHNORATI FAVORITES