Aoxing Pharmaceutical Reports Q1 Fiscal 2017 Financial Results

FOSTER CITY, CA / ACCESSWIRE / November 14, 2016 / Aoxing Pharmaceutical Company, Inc. (NYSE MKT: AXN) today announced that for the first quarter of fiscal year 2017, ended September 30, 2016, the Company reported revenues of $7,569,296, down 13% year-over-year from the revenue of $8,744,822 realized during the three months ended September 30, 2015. The year-over-year revenue decline was mainly due to lower sales for Zhongtong'an product, which represented 92.8% of total sales during the first quarter of fiscal 2017. Sales of Zhongtong'an product have been under pressure as inventories in the pipeline remain low. Our Tilidine product has not yet contributed to sales.

The Company's net income in Q1 of fiscal year 2017 was $346,080 (or $0.00 per share), compared to $1,267,936 (or $0.02 per share) for the three months ended September 30, 2015.

Aoxing's cash balance as of September 30, 2016 was $7,055,974, compared to $6,912,100 as of June 30, 2016, the end of its last fiscal year.

Mr. Zhenjiang Yue, Chairman and CEO of Aoxing Pharma, said, "Although the sales are currently under pressure, we believe the pipeline inventory is low and the revenue growth could recover going forward. We believe our marketing efforts for products other than Zhongtong'an, including our Tilidine tablets, could contribute more to the revenue with our market penetration."

About the Company

Aoxing Pharmaceutical Company, Inc. is a U.S. incorporated 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 Pharma 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 Food and Drug Administration ("CFDA"). For more information, please visit: www.aoxingpharma.com.

Safe Harbor Statement. This press release contains certain statements that may include "forward-looking statements." All statements other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and so these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including the risk factors discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on the SEC's website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these risk factors. Other than as required under the securities laws, the Company does not assume any duty to update these forward-looking statements.

AOXING PHARMACEUTICAL CO., INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

See accompanying notes to the consolidated financial statements

AOXING PHARMACEUTICAL CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)

See accompanying notes to the consolidated financial statements

CONTACT:

Aoxing Pharmaceutical Company:
646-367-1747
[email protected]

SOURCE: Aoxing Pharmaceutical Company, Inc.

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The Company's net income in Q1 of fiscal year 2017 was $346,080 (or $0.00 per share), compared to $1,267,936 (or $0.02 per share) for the three months ended September 30, 2015.

Aoxing's cash balance as of September 30, 2016 was $7,055,974, compared to $6,912,100 as of June 30, 2016, the end of its last fiscal year.

About the Company

AOXING PHARMACEUTICAL CO., INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

	September 30,			June 30,
	2016			2016
ASSETS	(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents	$	7,055,974			6,912,100
Accounts receivable, net		12,767,133			10,435,101
Notes receivable, net		1,227,593			765,317
Inventories, net		2,433,301			2,841,690
Prepaid expenses and other current assets		6,619,058			5,912,555
TOTAL CURRENT ASSETS		30,103,059			26,866,763

LONG-TERM ASSETS:
Property and equipment, net of accumulated depreciation		25,277,267			25,603,734
Deferred income tax		1,532,500			1,878,595
Other intangible assets, net		1,862,139			1,878,299
Investment in joint venture		-			4,200
TOTAL LONG-TERM ASSETS		28,671,906			29,364,828
TOTAL ASSETS	$	58,774,965			56,231,591

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Short-term borrowings	$	8,544,369			11,070,966
Accounts payable		3,137,060			2,709,819
Loan payable - bank		14,336,552			14,372,630
Current portion of loan payable - related parties		5,793			13,317
Current portion of loan payable - others		2,408,912			15,048
Accrued expenses and other current liabilities		11,406,652			9,633,750
TOTAL CURRENT LIABILITIES		39,839,338			37,815,530

LONG-TERM LIABILITIES:
Loan payable - related parties		7,495
Loan payable - others		89,941
Deferred income		322,967			340,089
TOTAL LONG-TERM LIABILITIES		420,403			340,089

Common stock, par value $0.001, 100,000,000 shares authorized, 76,209,195 shares issued and outstanding on September 30, 2016 and June 30, 2016		76,209			76,209
Additional paid in capital		73,638,151			73,629,751
Accumulated deficit		(55,947,665	)		(56,293,745	)
Accumulated other comprehensive income		1,764,235			1,723,740
TOTAL SHAREHOLDERS' EQUITY OF THE COMPANY		19,530,930			19,135,955

NONCONTROLLING INTEREST IN SUBSIDIARIES		(1,015,706	)		(1,059,983	)
TOTAL EQUITY		18,515,224			18,075,972

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	58,774,965			56,231,591

See accompanying notes to the consolidated financial statements

AOXING PHARMACEUTICAL CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)

	For the Three Months Ended
	September 30,
	2016		2015

SALES	$	$7,569,296	$	$8,744,822
COST OF SALES		1,514,932		1,758,079
GROSS PROFIT		6,054,364		6,986,743

OPERATING EXPENSES:
Research and development expense		377,287		377,306
General and administrative expenses		1,276,720		944,358
Selling expenses		2,577,366		2,394,346
Depreciation and amortization		119,485		131,530
TOTAL OPERATING EXPENSES		4,350,858		3,847,540

INCOME FROM OPERATIONS		1,703,506		3,139,203

OTHER INCOME/(EXPENSE):
Interest expense, net of interest income		(656,486)		(929,029)
Gain on foreign currency transactions		-		58,593
Equity in loss of joint venture, net of tax		(4,186)		(24,291)
Subsidy income		-		47,760

TOTAL OTHER (EXPENSE)		(660,672)		(846,967)

INCOME BEFORE INCOME TAX		1,042,834		2,292,236

Income tax		651,077		943,803
NET INCOME		391,757		1,348,433

Net income attributed to non-controlling interest in subsidiaries		45,677		80,497
INCOME ATTRIBUTABLE TO SHAREHOLDERS OF THE COMPANY		346,080		1,267,936

OTHER COMPREHENSIVE LOSS:
Foreign currency translation adjustment		(28,020)		(669,991)

COMPREHENSIVE INCOME		318,060		597,945

Other comprehensive income attributable to non-controlling interest		(1,401)		(33,500)

COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY	$	$319,461	$	$631,445


BASIC AND DILUTED LOSS PER COMMON SHARE	$	$0.00	$	$0.02
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING		76,209,195		69,852,302

See accompanying notes to the consolidated financial statements

CONTACT:

Aoxing Pharmaceutical Company:
646-367-1747
[email protected]

SOURCE: Aoxing Pharmaceutical Company, Inc.

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