NEW YORK, NY--(Marketwire - October 04, 2010) - Aoxing Pharmaceutical (NYSE Amex: AXN) ("Aoxing Pharma"), a specialty pharmaceutical company focusing on research, development, manufacturing and distribution of narcotic and pain-management products, today announced its financial and operational results for the fiscal year ended June 30, 2010.
Financial Results:
Revenues for fiscal year 2010 totaled $6.12 million, compared to $8.94 million for fiscal year 2009. The reduction of revenue occurred because the Company consolidated its manufacturing facilities in the summer of 2009, requiring re-certification or the facilities by the Chinese government. For a large part of the year the Company produced only a limited number of products for which it had obtained recertification. The primary contributor to revenue was Zhongtongan, a proprietary and flagship dental pain product, contributing 73% of total product sales.
Operating expenses for fiscal year 2010 were $7.36 million, compared to $10.15 million for fiscal year of 2009. The improvement occurred because the Company recorded an impairment loss of $2.12 million in fiscal year 2009, as well as management's efforts to improve operational efficiency. As a result, loss from operations for fiscal year 2010 was $3.58 million, or 44% less than the operating loss of $6.35 million in fiscal year 2009.
Net loss for fiscal year 2010 was $0.84 million, or $0.02 per share, 69% reduction than a net loss of $2.70 million or $0.06 per share in fiscal year 2009.
Aoxing Pharma ended the year with $3,99 million in cash, an increase during fiscal year 2010 of $2.71 million. The increase resulted from a private placement in August 2009 that produced net proceeds of nearly $5 million. From that sum, $3.94 million was used for operating activities and $1.79 million for capital investment activities during fiscal year 2010.
Zhenjiang Yue, Aoxing Pharma's founder, CEO and Chairman, said, "We have entered 2011 with exciting advances in our narcotic and pain management product franchise. We now have a clear path forward to commercialize our own pipeline products, as well as new product opportunities under the international joint venture and product collaborations with our strategic partners, including Johnson Matthey, QRxPharma and Phoenix PharmaLabs, in broader acute, chronic-pain and drug addiction therapeutics. As we focus on these priorities, we continue to manage our financial performance effectively throughout the organization. We effectively worked through the recertification process and have successfully listed on the NYSE Amex, setting us up to continuously build our global business presence in narcotics and CNS related therapeutics in the coming fiscal year 2011."
Recent Highlights and Updates
- Aoxing Pharma successfully listed on the NYSE Amex under the ticker symbol"AXN" on Apirl 14, 2010, followed by its inclusion in the broad-market Russell 3000®, Russell 2000®Index, Russell Microcap®, Russell Global®Index as well as other growth and value style Russell indexes in June 2010.
- Aoxing Pharma and Johnson Matthey Plc entered into a landmark Joint-venture agreement to focus on research, development, manufacturing & marketing API for narcotics & neurological drugs planned to begin in 2011.
- Aoxing Pharma and QRxPharma Limited entered into strategic alliance to co-develop two proprietary narcotic drugs, MoxDuo (IV) and MoxDuo (IR), a proprietary combination product of morphine and oxycodone, for China & ex-China markets.
- Aoxing Pharma and Phoenix PharmaLabs entered into a strategic alliance to co-develop a novel class of molecules in pain and drug addiction therapeutics.
- Aoxing Pharma continues in advancing its pipeline development, including (a) Completion of the registration trial of Tilidine tablets for acute post-operative pain and cancer pain; (b) Approval of registration clinical trial license of Buprenorphine/Naloxone sublingual tablets for opioid addiction treatment; (c) Tongjinshule capsules, a novel menstrual pain drug, entering the registration trial. (d) Planned launch of several new products in 2011.
About Aoxing Pharmaceutical Company, Inc.
Aoxing Pharmaceutical Company, Inc. is a US incorporated specialty pharmaceutical company with its 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 in China 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 a joint venture collaboration with Johnson Matthey Plc to produce and market narcotics and neurological drugs in China. It also has strategic alliance partnership with QRxPharma, Phoenix PharmaLabs, Inc. and American Oriental Bioengineering, Inc. For more information, please visit: www.aoxingpharma.com.
Safe Harbor Statement from Aoxing Pharmaceutical Company, Inc.
Statements made in this press release that are forward-looking 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 anticipated 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, 2010, 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
June 30,
2010 2009
ASSETS
CURRENT ASSETS:
Cash $ 3,985,710 $ 1,271,922
Accounts receivable, net 1,724,198 1,064,381
Loan receivable 748,790 -
Inventory 1,564,975 712,521
Deposits with suppliers 475,042 261,780
Prepaid expenses and sundry current assets 421,391 302,449
------------ ------------
TOTAL CURRENT ASSETS 8,920,106 3,613,053
------------ ------------
LONG - TERM ASSETS
Property and equipment, net of accummulated
depreciation 25,569,782 29,324,362
Other intangible assets 1,431,182 1,549,497
Goodwill 19,012,321 18,926,527
Deferred tax assets 3,394,103 3,331,045
------------ ------------
TOTAL LONG-TERM ASSETS 49,407,388 53,131,431
------------ ------------
TOTAL ASSETS $ 58,327,494 $ 56,744,484
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-Term borrowings $ 293,746 $ 292,193
Accounts payable 2,965,514 2,816,711
Deposit payable - 3,871,552
Current portion of long term debt - other 46,999 144,635
Current portion of long term debt - related
parties 94,760 4,494,629
Accrued expenses and taxes payable and other
sundry current liabilities 2,076,555 2,403,185
Loan payable - Bank 8,078,019 6,094,428
Convertible debentures - 1,023,733
------------ ------------
TOTAL CURRENT LIABILITIES 13,555,593 21,141,066
------------ ------------
LONG-TERM DEBT-- RELATED PARTIES 6,329,118 5,857,357
------------ ------------
-- OTHER 2,221,943 1,737,957
------------ ------------
WARRANT AND DERIVATIVE LIABILITIES 1,913,534 3,368,901
------------ ------------
Common stock, par value $0.001, 100,000,000
shares authorized, 46,494,903 and 41,414,000
shares issued and outstanding at June 30,
2010 and June 30, 2009, respectively 46,495 41,414
Additional paid in capital 49,594,553 39,146,000
(15,598,600) (14,766,441)
Other comprehensive income 525,555 469,011
------------ ------------
TOTAL STOCKHOLDERS' EQUITY OF THE COMPANY 34,568,003 24,889,984
------------ ------------
NONCONTROLLING INTEREST IN SUBSIDIARIES (260,697) (250,781)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 34,307,306 24,639,203
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 58,327,494 $ 56,744,484
============ ============
AOXING PHARMACEUTICAL CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS)
For the year ended
June 30,
2010 2009
SALES $ 6,115,774 $ 8,941,907
COST OF SALES 2,341,195 5,135,661
------------ ------------
GROSS PROFIT 3,774,579 3,806,246
------------ ------------
COSTS AND EXPENSES:
Research and development expense 1,540,744 722,567
General and administrative expenses 3,588,532 3,474,778
Bad debt expenses 216,440 1,461,789
Selling expenses 1,367,997 1,480,118
Depreciation and amortization 645,004 670,059
Impairment loss 0 2,345,420
------------ ------------
TOTAL COSTS AND EXPENSES 7,358,717 10,154,731
------------ ------------
LOSS FROM OPERATIONS (3,584,138) (6,348,485)
------------ ------------
OTHER INCOME (EXPENSE):
Interest expense, net of interest income (2,427,675) (1,919,143)
Change in fair value of warrant and
derivative liabilities 1,455,368 627,183
Gain on foreign currency transactions (0) 203,037
Forgiveness of debt 3,648,616 1,461,299
------------ ------------
TOTAL OTHER INCOME (EXPENSE) 2,676,309 372,376
------------ ------------
INCOME (LOSS) BEFORE INCOME TAXES (907,829) (5,976,109)
Income taxes (credit) (63,058) (3,281,059)
------------ ------------
NET INCOME (LOSS) (844,771) (2,695,050)
Net loss attributed to non-controlling
interest (12,612) (242,787)
------------ ------------
INCOME (LOSS) ATTRIBUTABLE TO THE SHAREHOLDERS
OF THE COMPANY (832,159) (2,452,263)
OTHER COMPREHENSIVE INCOME (LOSS) :
Foreign currency translation adjustment 59,240 (159,874)
------------ ------------
COMPREHENSIVE INCOME (LOSS) (772,919) (2,612,137)
Other comprehensive income attributable to
non-controlling interest 2,697 (7,994)
------------ ------------
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO
THE COMPANY $ (775,616) (2,604,143)
============ ============
BASIC AND DILUTED EARNINGS (LOSSES) PER COMMON
SHARE (0.02) (0.06)
============ ============
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 45,581,724 41,201,368
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CONTACT:
Aoxing Pharmaceutical Co., Inc.
David Shao
Chief Financial Officer
646- 367-1747
Investor Relations:
The Trout Group
Brian Korb
646-378-2923
