Biostar Pharmaceuticals Announces Closing of a $3.6 Million Equity Financing
XIANYANG, China, Nov. 6 /PRNewswire-Asia-FirstCall/ -- Biostar
Pharmaceuticals, Inc. (OTC Bulletin Board: BSPM) ("Biostar" or "the Company"),
a Xianyang-based developer, manufacturer and supplier of pharmaceutical
products and medical nutrients addressing a variety of diseases and conditions,
today announced that it has closed a private placement of approximately $3.6
million worth of securities with certain accredited investors on Monday,
November 2, 2009. Investors received 2,060,000 shares of Series B convertible
preferred stock, which convert on a 1 to 1 basis into Biostar common shares
with attached warrants to purchase a total of 500,000 shares of the Company's
common stock. The warrants are exercisable for a period of five years from
the date of issuance at an exercise price of $3.00 and include a call
provision. Biostar will use the net proceeds for the completion of the
Company's new raw materials processing facility, which will help ensure
product quality while reducing production costs for its pharmaceutical and
nutrient Products. The Company plans to sell a portion of the processed raw
materials to other pharmaceutical companies in the Shaanxi province, and
increase its advertising budget in two municipalities, so as to increase its
sales there.
After completing this transaction, Biostar has approximately 26.1 million
shares outstanding on a diluted basis.
"After evaluating several financing options to complete our raw materials
processing facility, we feel confident that this option was best suited for us
for the time being," stated Chairman Ronghua Wang. "Upon completion of the
raw materials processing facility, we will manage and control a large portion
of our production which includes harvesting, raw material processing,
pharmaceutical ingredient synthesizing and finally medicine manufacturing in
our current facility. We anticipate that increase of the hepatitis product
sales market will boost gross margins for our core products while providing
incremental net income through new material sales. We are confident our
organic growth, complemented by this new facility will enable us to meet the
Make Good provisions with our new investors, which call for income from
operations of $15.9 million for 2009 and $21.1 million for 2010," Wang
concluded.
This serves as a summary of the transaction and does not include all the
details. Please visit http://www.sec.gov to review the 8-K which that
accompanied this transaction for complete details and risk disclosures.
About Biostar Pharmaceuticals, Inc.
Biostar Pharmaceuticals, Inc., through its wholly-owned subsidiary in
China, develops, manufactures and markets pharmaceutical and medical nutrient
products for a variety of diseases and conditions. The Company's most popular
product is its Xin Ao Xing Oleanolic Acid Capsule, an over-the-counter ("OTC")
medicine for chronic hepatitis B, a disease affecting approximately 10% of the
Chinese population. In addition to its hepatitis product, Biostar
manufactures two broad-based OTC products, two prescription-based
pharmaceuticals and thirteen nutrients. The Company has adopted international
standards and is in the process of applying for three patents.
Safe Harbor Statement
Certain statements in this release are forward looking statements, within
the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and
Section 21E of the U.S. Securities Exchange Act of 1934, as amended, which
involve a number of risks and uncertainties that could cause actual results to
differ materially from those in such forward-looking statements. The risks
and uncertainties relating to these statements include, but are not limited to,
risks and uncertainties regarding the success of our investments, risks and
uncertainties regarding fluctuations in earnings, our ability to sustain our
previous levels of profitability including on account of our ability to manage
growth, intense competition, wage increases in China, our ability to attract
and retain highly skilled professionals, time and cost overruns on fixed-price,
fixed-time frame contracts, client concentration, our ability to successfully
complete and integrate potential acquisitions, withdrawal of governmental
fiscal incentives, political instability and regional conflicts and legal
restrictions on raising capital or acquiring companies outside China.
Additional risks that could affect our future operating results are more fully
described in our United States Securities and Exchange Commission filings
including our S-1 dated June 27, 2008, our Quarterly Report on Form 10-Q for
the quarter ended March 31, 2009, our 10-K for the year ended December 31,
2008, and other recent filings. These filings are available at
http://www.sec.gov . We may, from time to time, make additional written and
oral forward-looking statements, including statements contained in our filings
with the Securities and Exchange Commission and our reports to shareholders.
We do not undertake to update any forward-looking statements that may be made
from time to time by or on our behalf.
