SOURCE: Aoxing Pharmaceutical Co., Inc.

October 04, 2010 08:30 ET

Aoxing Pharmaceutical Company Announces Fiscal Year 2010 Financial and Operational Results

NEW YORK, NY--(Marketwire - October 4, 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  

Contact Information

  • CONTACT:
    Aoxing Pharmaceutical Co., Inc.
    David Shao
    Chief Financial Officer
    646- 367-1747

    Investor Relations:
    The Trout Group
    Brian Korb
    646-378-2923