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Jiangbo Pharmaceuticals Reports Results for Third Quarter of Fiscal Year 2010
Date:5/17/2010

LAIYANG, China, May 17 /PRNewswire-Asia-FirstCall/ -- Jiangbo Pharmaceuticals, Inc. (OTC Bulletin Board: JGBO) ("Jiangbo" or the "Company"), a pharmaceutical company with its principal operations in the People's Republic of China, today announced financial results for the third quarter fiscal year 2010 ended March 31, 2010.

    Third Quarter Highlights

    -- Revenue was $25.6 million, a slight decrease of 0.6% year-over-year
    -- Gross profit was $18.6 million, as compared to $18.9 million, and gross
       margin was 72.7%, as compared to 73.4% in the year ago quarter
    -- Operating income rose 3.1% to $13.7 million
    -- GAAP net income was $15.2 million, or $1.33 per basic share, compared
       $8.9 million or $0.86 per basic share a year ago
    -- Excluding loss from discontinued operation, non-cash gain or loss
       related to the change in fair value of derivative liabilities,
       unrealized gain or loss on trading securities, and amortization
       expenses for debt discount and financing cost, non-GAAP adjusted net
       income was $7.7 million, or $0.50 per diluted share, as compared to
       non-GAAP adjusted net income of $10.1 million, or $0.68 per diluted
       share.

"Our third quarter operating income returned to growth as a result of strengthened sales effort and improved operational efficiency stemming from our continued cost control efforts," said Jiangbo's Chairman and CEO, Mr. Wubo Cao. "Sales of several of our key products, including Clarithromycin sustained-release and Radix Isatidis, experienced strong year-over-year growth and reflected the recent reinforcement of our sales effort and distribution channels. We continue to evaluate strategic opportunities to cost-effectively market our key products to deliver organic revenue growth in future quarters."

Third Quarter Fiscal Year 2010 Results

Total revenue for the three months ended March 31, 2010 was $25.6 million, compared to $25.7 million for the three months ended March 31, 2009. Sales volume for Clarithromycin sustained-released tablets grew 23.0% year-over-year as a result of the Company's reinforced sales efforts and tighter management of its distribution channels. Similarly, sales volume for Radix Isatidis dispersible tablets rose 44.7% over the prior year quarter. Strong sales growth of these two products was offset by a decline in sales volume for Itopride Hydrochloride granules and Baobaole chewable tablets, which were down 10.8% and 35.9%, respectively. Itopride and Baobaole continued to experience competition from similar products, including some that are included in the National Basic Medical Insurance Catalog. As the sales growth of OTC drugs, such as Baobaole chewable tablets and Radix Isatidis dispersible tablets, require continued support through advertising and promotion, management is evaluating the appropriate investment in TV advertising to drive the sales.

Gross profit in the third quarter was $18.6 million, as compared to $18.6 million in the prior year period. Gross margin decreased to 72.7% from 73.4%, primarily due to changes in the sales of product mix.

Selling, general and administrative expenses were $3.8 million for the three months ended March 31, 2010, down 15.1% from $4.5 million in the prior year period and primarily reflected the Company's more effective cost control efforts. Year-over-year spending reduction stemmed primarily from lower advertising, marketing and promotion, as well as salaries, wages and related benefits.

Research and development expenses totaled $1.1 million, consistent with those in the prior year period. The Company is obligated to make monthly payment to the designated university/institute to support two cooperative research and development agreements which were signed in fiscal 2008.

Income from operations rose 3.1% to $13.7 million from $13.3 million, primarily reflecting lower year-over-year operating expenses.

Other income was $5.0 million, as compared to other expenses of $1.1 million for the three months ended March 31, 2009. The increase was mainly due to an $11.6 million non-cash gain related to the change in the fair value of derivative liabilities, partly offset by $6.6 million interest expenses and non-cash amortization expense related to debt discount and debt issuance costs related to the convertible debentures, as compared to $1.2 million in the third quarter of 2009.

GAAP net income for the three months ended March 31, 2010 was $15.2 million, as compared to $8.9 million in the year ago quarter. Basic earnings per share (EPS) were $1.33, compared with $0.86 a year ago. Diluted EPS assumes the conversion of the Company's convertible notes and is calculated by adding interest expenses to and deducting the unamortized loan issuance costs and debt discount from net income. As a result, the Company recorded earnings of $0.02 per diluted share, as compared to a loss of $1.49 per diluted share in the same quarter last year.

Excluding loss from discontinued operation, non-cash gain or loss related to the change in fair value of derivative liabilities, unrealized gain or loss on trading securities, and amortization expenses for debt discount and financing cost, non-GAAP adjusted net income was $7.7 million, or $0.50 per diluted share, as compared to non-GAAP adjusted net income of $10.0 million, or $0.68 per diluted share a year ago.

Nine Month Results

Total revenue for the nine month period ended March 31, 2010 was $68.1 million, down 21.0% from $86.2 million for the nine month period ended March 31, 2009. The decrease was primarily due to a 26% average per unit sales price reduction year-over-year for Clarithromycin sustained-released tablets, Itopride Hydrochloride granules and Baobaole chewable tables during the first six months of fiscal year 2010, following restructuring of the Company's sales network in January 2009.

Gross profit totaled $50.2 million, down 24.4% from $66.5 million in the prior year period, representing a gross profit margin of 73.7%. Operating income was $33.5 million, a 4.6% increase year-over-year from $32.1 million last year.

GAAP net income was $22.7 million, or $2.07 basic EPS, as compared to $17.4 million, or $1.75 basic EPS in the corresponding period in 2009. Diluted EPS was $0.57 per share, as compared to a loss of $0.86 per share in the year ago period.

Excluding loss discontinued operation, non-cash gain or loss related to the change in fair value of derivative liabilities, unrealized gain or loss on trading securities, and amortization expenses for debt discount and financing costs, non-GAAP adjusted net income was $21.2 million, or $1.39 per fully diluted share for the nine months ended March 31, 2010, compared to non-GAAP adjusted net income of $23.5 million, or $1.64 per fully diluted share, for the nine months ended March 31, 2009.

Financial Condition

As of March 31, 2010, the Company had $96.5 million in cash and an additional $11.5 million in restricted cash, as compared to $104.4 million and $7.3 million, respectively, at the end of fiscal 2009. The decrease was mainly due to the late 2009 purchase of land use rights for a large parcel of land near Laiyang Jiangbo Pharmaceuticals for $17 million for future factory expansion. Working capital was $77.7 million at March 31, 2010 and $99.8 million at June 30, 2009.

Shareholder's equity was $124.2 million, as compared to $126.1 million at the end of fiscal 2009. The decrease in shareholder's equity was the result of the reclassification of the Company's derivative instruments from equity to liability. The Company generated $8.5 million in cash flows from operating activities in the first nine months of fiscal 2010.

The Company has continued a dialogue with holders of its November 2007 Notes and May 2008 Notes to find a mutually agreeable resolution regarding the delinquent interest payments. Jiangbo became delinquent on the payment of the interests due on the November 2007 Notes and May 2008 Notes due to continued delays in its ability to transfer cash out of the People's Republic of China (PRC). Pursuant to a certain Letter Agreement dated February 15, 2010 with holders of the November 2007 Notes and May 2008 Notes, the holders of such Notes had agreed to waive the outstanding default under the Notes as a result of the Company's failure to make timely interest payments on the Notes provided that the Company made the delinquent interest payments by February 25, 2010, and to date, remains unable to make these payments. Currently, $4.0 million aggregate principal amount of the November 2007 Notes and $22.9 million aggregate principal amount of the May 2008 Notes remains outstanding.

Guidance and Corporate Update

"We recognize the need to expand our commercial product portfolio and build a strong R&D pipeline to create sustainable long-term growth," added Mr. Cao. "As we continue to evaluate the best deployment of our cash for strategic product acquisition and licensing deals, we expect to continue improving our operational efficiency and to strengthen our operational management team to accelerate that effort."

The Company is maintaining its fiscal 2010 revenue guidance of $96 million to $98 million and operating income guidance of $42 million to $44 million. Management expects to continue to deploy its policy of engaging in cost-effective marketing of select key drugs and improving operational efficiency in the fourth quarter of fiscal 2010.

Renovation at the Hongrui's factory is continuing and is now expected to finish by early July 2010. The Company has increased the scope of this project to include additional repairs and upgrades to ensure the production facilities will, similar to the existing Jiangbo facility, conform to GMP standards.

With $96.5 million in cash, Jiangbo continues to actively evaluate opportunities to in-license or acquire new branded drugs with sustainable long-term growth potential.

Conference Call

Jiangbo Pharmaceuticals, Inc. management will host a conference call on Monday, May 17, 2010 at 7:00 a.m. Eastern Time to discuss financial results for the third quarter ended March 31, 2010. The conference call will include Mr. Wubo Cao, Chairman and CEO, and Ms. Elsa Sung, CFO, of Jiangbo. To participate in the live conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: (877) 762-9219. International callers should dial +1 (706) 758 - 5465. The Conference ID for this call is 74532345.

If you are unable to participate in the call at this time, a replay will be available for 14 days starting on Monday, May 17, 2010 at 9:00 a.m. Eastern Time. To access the replay, dial (800) 642-1687, international callers dial (706) 645-9291. Conference ID is 74532345.

Use of Non-GAAP Adjusted Financial Information

This press release includes certain financial information, non-GAAP adjusted net income and non-GAAP adjusted fully diluted earnings per share, which are not presented in accordance with GAAP. Non-GAAP adjusted net income was derived by taking net income and adjusting it with non-cash gains or losses related to the change in fair value from derivative liabilities and the amortization of debt discount and debt issuance costs related to convertible debentures. The Company's management believes that these non-GAAP adjusted measures provide investors with a better understanding of the Company's historical results from its core business operations. To supplement the Company's condensed consolidated financial statements presented on a non-GAAP adjusted basis, the Company has provided non-GAAP adjusted financial information, which is non-GAAP adjusted net income and non-GAAP adjusted earnings per share, excluding the impact of these items in this press release. The non-GAAP adjusted information is not meant to be considered in isolation or as a substitute for GAAP financials. The non-GAAP adjusted financial information provided by the Company may also differ from non-GAAP adjusted information provided by other companies. A table at the end of this press release provides a reconciliation of the non-GAAP adjusted financial information to the nearest GAAP measure.

About Jiangbo Pharmaceuticals, Inc.

Jiangbo Pharmaceuticals, Inc. is a U.S. public company engaged in the research, development, production, marketing and sales of pharmaceutical products in the People's Republic of China. Its operations are located in Eastern China in an Economic Development Zone in Laiyang City, Shandong province. Jiangbo is a major pharmaceutical company in China producing both western and Chinese herbal-based medical drugs in tablet, capsule, granule, syrup and electuary (sticky syrup) form. http://www.jiangbopharma.com .

Safe Harbor Statement

Certain statements in this press release that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not guarantees of future performance and are subject to risks and uncertainties that could cause the Company's actual results and financial position to differ materially from those included within the forward-looking statements. Forward-looking statements involve risks and uncertainties, including those relating to the Company's ability to introduce, manufacture and distribute new drugs, improve operational efficiency, in-license or acquire new drugs, make required interest payment and NASDAQ listing. Actual results may differ materially from predicted results, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties include, among others, the Company's ability to obtain raw materials needed in manufacturing, the continuing employment of key employees, the failure risks inherent in testing any new drug, the possibility that regulatory approvals may be delayed or become unavailable, patent or licensing concerns that may include litigation, direct competition from other manufacturers and product obsolescence. More information about the potential factors that could affect the Company's business and financial results is included in the Company's filings, available via the United States Securities and Exchange Commission.


                        - Financial Statements Follow -




                JIANGBO PHARMACEUTICALS, INC. AND SUBSIDIARIES
         (FORMERLY KNOWN AS GENESIS PHARMACEUTICAL ENTERPRISES, INC.)
                         CONSOLIDATED BALANCE SHEETS

                                           March 31,           June 30,
                                              2010               2009
                                          (Unaudited)
    ASSETS
    CURRENT ASSETS:
      Cash                                $96,464,482       $104,366,117
      Restricted cash                      11,523,285          7,325,000
      Investments                              26,362            879,228
      Accounts receivable, net
       of allowance for doubtful
       accounts of $1,141,756 and
       $822,469 as of March 31,
       2010 and June 30, 2009,
       respectively                        27,619,639         19,222,707
      Inventories                           3,368,308          3,277,194
      Other receivables                        12,523            167,012
      Other receivable - related
       parties                                242,055                 --
      Advances to suppliers                   510,288            236,496
      Financing costs - current               565,684            680,303
         Total current assets             140,332,626        136,154,057

    PLANT AND EQUIPMENT, net               13,437,640         13,957,397

    OTHER ASSETS:
      Restricted investments                  161,471          1,033,463
      Financing costs, net of current              --            556,365
      Intangible assets, net               32,852,205         17,041,181
         Total other assets                33,013,676         18,631,009

          Total assets                   $186,783,942       $168,742,463

    LIABILITIES AND SHAREHOLDERS'
     EQUITY
      Accounts payable                     $2,227,240         $6,146,497
      Short term bank loans                 2,200,500          2,197,500
      Notes payable                        11,523,285          7,325,000
      Other payables                        2,880,338          2,152,063
      Refundable security deposits
       due to distributors                  3,080,700          4,102,000
      Other payables - related
       parties                                951,461            238,956
      Accrued liabilities                   4,045,510          1,356,898
      Liabilities assumed from
       reorganization                         536,614          1,565,036
      Taxes payable                         4,952,356         11,248,226
      Derivative Liabilities               20,074,873                 --
      Convertible debt, net of
       discount $17,083,153 as
       of March, 31, 2010                  10,146,847                 --
         Total current liabilities         62,619,724         36,332,176

    CONVERTIBLE DEBT, net of
     discount $28,493,089 as of
     June 30, 2009                                 --          6,346,911

          Total liabilities                62,619,724         42,679,087

    COMMITMENTS AND CONTINGENCIES

    SHAREHOLDERS' EQUITY:
      Convertible preferred stock
      Series A ($0.001 par value;
       0 shares issued and
       outstanding as of March 31,
       2010 and June 30, 2009)                     --                 --
      Common stock ($0.001 par value,
       22,500,000 and 15,000,000
       shares authorized, 11,474,802
       and 10,435,099 shares issued
       and outstanding as of March
       31, 2010 and June 30, 2009,
       respectively)                           11,475             10,435
      Paid-in-capital                      28,488,749         48,397,794
      Capital contribution
       receivable                             (11,000)           (11,000)
      Retained earnings                    85,611,586         67,888,667
      Statutory reserves                    3,253,878          3,253,878
      Accumulated other
       comprehensive income                 6,809,530          6,523,602
         Total shareholders'
          equity                          124,164,218        126,063,376
          Total liabilities and
           shareholders' equity          $186,783,942       $168,742,463



                JIANGBO PHARMACEUTICALS, INC. AND SUBSIDIARIES
         (FORMERLY KNOWN AS GENESIS PHARMACEUTICAL ENTERPRISES, INC.)
       CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
         FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2010 AND 2009
                                 (UNAUDITED)

                      For the Three Months Ended  For the Nine Months Ended
                                March 31,                  March 31,
                            2010         2009         2010         2009
    REVENUES:
    Sales             $   25,571,389  $25,725,837  $68,135,385 $ 85,991,330
    Sales - related
     parties                      --           --           --      243,943
     Total revenues       25,571,389   25,725,837   68,135,385   86,235,273

    COST OF SALES
    Cost of sales          6,974,455    6,853,810   17,901,903   19,705,020
    Cost of sales
     - related
     parties                      --           --           --       54,500
     Total cost of
      sales                6,974,455    6,853,810   17,901,903   19,759,520

    GROSS PROFIT          18,596,934   18,872,027   50,233,482   66,475,753

    RESEARCH AND
     DEVELOPMENT EXPENSE   1,093,440    1,098,675    3,299,400    3,295,125

    SELLING, GENERAL AND
     ADMINISTRATIVE
     EXPENSES              3,799,136    4,477,356   13,400,155   31,111,752

    INCOME FROM
     OPERATIONS           13,704,358   13,295,996   33,533,927   32,068,876


   OTHER (INCOME)
    EXPENSE:
    Change in fair
     value of
     derivative
     liabilities        (11,624,079)           --  (13,490,071)          --
    Other income
     - related
     parties                (80,652)      (76,552)    (241,956)    (313,276)
    Non-operating
     (income)
     expense                  5,790      (131,104)     220,061    1,062,488
    Interest
     expense, net         6,643,163     1,241,843   15,562,981    4,143,968
    Loss from
     discontinued
     operations              36,000       103,008      200,769    1,693,830
     Total other
      income (expense),
      net                (5,019,778)    1,137,195    2,251,784    6,587,010

    INCOME BEFORE
     PROVISION FOR
     INCOME TAXES        18,724,136    12,158,801   31,282,143   25,481,866

    PROVISION FOR
     INCOME TAXES         3,539,870     3,302,953    8,618,061    8,093,320

    NET INCOME           15,184,266     8,855,848   22,664,082   17,388,546

    OTHER COMPREHENSIVE
     INCOME:
    Unrealized
     holding gain
     (loss)                  32,164     (200,025)      88,535   (2,147,642)
    Foreign currency
     translation
     adjustment                 509     (201,173)     197,393      378,284

    COMPREHENSIVE
     INCOME          $   15,184,775  $ 8,654,650  $22,950,010  $15,619,188

    BASIC WEIGHTED
     AVERAGE NUMBER
     OF SHARES           11,419,991   10,277,762   10,965,346    9,937,189


    BASIC EARNINGS
     PER SHARE       $         1.33  $      0.86  $      2.07 $       1.75

    DILUTED WEIGHTED
     AVERAGE NUMBER
     OF SHARES           15,235,811   14,632,762   15,234,156   14,305,589


    DILUTED EARNINGS
     PER SHARE       $         0.02  $     (1.49) $      0.57 $      (0.86)




                JIANGBO PHARMACEUTICALS, INC. AND SUBSIDIARIES
         (FORMERLY KNOWN AS GENESIS PHARMACEUTICAL ENTERPRISES, INC.)
               CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

                                   Common Stock
                                 Par Value $0.001                   Capital
                                 Number               Paid-in    contribution
                               of shares    Amount    capital      receivable

     BALANCE, June 30, 2008    $9,767,844  $9,770   $45,554,513     $(11,000)

      Shares issued for
       adjustments for 1:40
       reverse split                1,104      --            --           --
      Cancellation of
       common stock for
       settlement @ $8
       per share                   (2,500)     (2)     (19,998)           --
      Common stock issued
       for service @ $8
       per share                    2,500       2       19,998            --
      Common stock issued
       for service @ $9
       per share                    2,500       2       22,498            --
      Common stock issued
       to Hongrui @ $4.035
       per share                  643,651     643    2,596,488            --
      Conversion of
       convertible debt
       to stock                    20,000      20      159,980            --
      Stock based
       compensation                    --      --       64,315            --
      Net income
      Adjustment to
       statutory reserve
      Change in fair value
       on restricted
       marketable equity
       securities                      --      --           --            --
      Foreign currency
       translation gain


     BALANCE, June 30, 2009   $10,435,099 $10,435  $48,397,794      $(11,000)

      Cumulative effect
       of reclassification
       of warrants                     --      --  (34,971,570)           --

     BALANCE, July 1, 2009
      as adjusted              10,435,099  10,435   13,426,224       (11,000)

      Common stock issued
       for payment for other
       payable-related
       party @ $8.75 per
       share                        2,286       2      19,998             --
      Common stock issued
       for services @
       $8.75 per share              1,143       1       9,999             --
      Common stock issued
       for services @ $9.91
       per share                    1,009       1       9,999             --
      Common stock issued
       for interest
       payment @ $8 per
       share                       84,015      85     990,968             --
      Conversion of
       convertible debt
       to stock                   951,250     951   7,609,049             --
      Reclassification
       of derivative
       liabilities to
       APIC due to
       conversion of
       convertible debt                --      --   6,287,408             --
      Stock based
       compensation                    --      --     135,104             --
      Net income
      Change in fair value
       on restricted
       marketable equity
       securities
      Foreign currency
       translation gain                --      --          --             --
     BALANCE, March 31, 2010
      (Unaudited)              11,474,802  11,475  28,488,749        (11,000)


                                                       Accumulated
                                Retained Earnings        other
                            Statutory    Unrestricted comprehensive
                             reserves      earnings      income       Totals

    BALANCE, June 30, 2008  $3,253,878   $39,008,403    $7,700,905 $95,516,469

     Shares issued for
      Adjustments for
      1:40 reverse
      split                         --            --            --          --
     Cancellation of
      common stock for
      settlement @ $8
      per share                     --            --            --     (20,000)
     Common stock
      issued for
      service @ $8
      per share                     --            --            --      20,000
     Common stock
      issued for
      service @ $9
      per share                     --            --            --      22,500
     Common stock
      issued to
      Hongrui @
      $4.035 per
      share                         --            --            --   2,597,131
     Conversion of
      convertible
      debt to stock                 --            --            --     160,000
     Stock based
      compensation                  --            --            --      64,315

     Net income                     --    28,880,264            --  28,880,264
     Adjustment to
      statutory reserve             --            --            --          --
     Change in fair
      value on restricted
      marketable equity
      securities                    --            --    (1,514,230) (1,514,230)
      Foreign currency
       translation gain             --            --       336,927     336,927


    BALANCE, June 30, 2009  $3,253,878  $67,888,667    $6,523,602 $126,063,376

     Cumulative effect
      of reclassification
      of warrants                   --   (4,941,163)           --  (39,912,733)

    BALANCE, July 1, 2009
     as adjusted             3,253,878   62,947,504     6,523,602   86,150,643
     Common stock issued
      for payment for
      other  payable-
      related party @
      $8.75 per share               --           --            --       20,000
     Common stock issued
      for services @
      $8.75 per share               --           --            --       10,000
     Common stock issued
      for  services @
      $9.91 per share               --           --            --       10,000
     Common stock issued
      for interest
      payment @ $8 per
      share                         --           --            --      991,053
     Conversion of
      convertible debt
      to stock                      --           --            --    7,610,000
     Reclassification of
      derivative liabilities
      to APIC due to
      conversion of
      convertible debt              --           --            --    6,287,408
     Stock based
      compensation                  --           --            --      135,104
     Net income                     --   22,664,082            --   22,664,082
     Change in fair value
      on restricted
      marketable equity
      securities                    --           --        88,535       88,535
     Foreign currency
      translation
      gain                          --           --       197,393      197,393
    BALANCE, March 31, 2010
     (Unaudited)             3,253,878   85,611,586     6,809,530  124,164,218



                JIANGBO PHARMACEUTICALS, INC. AND SUBSIDIARIES
         (FORMERLY KNOWN AS GENESIS PHARMACEUTICAL ENTERPRISES, INC.)
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR NINE MONTHS ENDED MARCH 31, 2010 AND 2009
                                 (Unaudited)

                                                 2010              2009
    CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                           $     22,664,082  $     17,388,546
    Loss from discontinued operations             200,769         1,693,830
    Income from continuing operations          22,864,851        19,082,376
    Adjustments to reconcile net income
     to net cash, net of acquisition,
     provided by operating activities:
         Depreciation                             615,565           464,094
         Amortization of intangible
          assets                                1,194,331           371,925
         Amortization of deferred debt
          issuance costs                          670,984           510,227
         Amortization of debt discount         11,409,936         2,679,526
         Loss from issuance of shares in
          lieu of cash interest payment           318,936                --
         Interest expense payment of
          shares in lieu of cash                    4,457                --
         Bad debt expense                         446,257           368,840
         Realized (gain) loss on marketable
          securities                              406,346          (106,865)
         Unrealized (gain) loss on
          marketable securities                  (270,339)        1,255,522
         Other non-cash settlement                     --           (20,000)
         Change in fair value of
          derivative liabilities              (13,490,071)               --
         Stock-based compensation                 155,104            43,340
      Changes in operating assets
       and liabilities
         Accounts receivable                   (8,813,521)        2,353,566
         Accounts receivable - related
          parties                                      --           488,646
         Inventories                              (86,604)          205,471
         Other receivables                        154,654            63,170
         Other receivables - related
          parties                                (241,956)         (317,303)
         Advances to suppliers and other
          assets                                 (273,373)        1,602,693
         Accounts payable                      (3,926,015)        3,171,180
         Customer deposit                      (1,026,480)        4,100,600
         Other payables                           725,041           194,283
         Other payables - related
          parties                                 712,114           (58,580)
         Accrued liabilities                    3,338,193           682,145
         Liabilities assumed from
          reorganization                          (95,384)       (1,164,323)
         Taxes payable                         (6,308,625)        5,107,831
            Net cash provided by
             operating activities               8,484,399        41,078,364

    CASH FLOWS FROM INVESTING ACTIVITIES:
    Cash used in acquisition                           --        (8,581,970)
    Proceeds from sale of marketable
     securities                                   531,750           167,623
    Purchase of equipment                         (76,977)         (130,814)
    Purchase of land use right                (16,975,633)               --
            Net cash used in investing
             activities                       (16,520,860)       (8,545,161)

    CASH FLOWS FROM FINANCING ACTIVITIES:
    Change in restricted cash                  (4,186,572)        4,149,305
    Proceeds from bank loans                    2,199,600         2,196,750
    Payments for bank loans                    (2,199,600)       (2,782,550)
    Proceeds from notes payable                19,173,180         7,009,097
    Principal payments on notes payable       (14,986,608)       (9,161,912)
            Net cash (used in) provided
             by financing activities                   --         1,410,690

    EFFECTS OF EXCHANGE RATE CHANGE IN CASH       134,826           198,836

    INCREASE (DECREASE) IN CASH                (7,901,635)       34,142,729

    CASH, beginning                           104,366,117        48,195,798

    CASH, ending                          $    96,464,482   $    82,338,527


    SUPPLEMENTAL DISCLOSURES OF CASH
     FLOW INFORMATION:
    Cash paid for Interest                $       393,111   $     1,130,837
    Cash paid for Income taxes            $     2,631,495   $     4,883,039

    Non-cash investing and financing
     activities:
      Common stock issued to acquire
       Hongrui                            $            --   $     2,597,132
      Common stock issued for stock
       based compensation                 $        20,000                --
      Common stock issued to offset
       related party payable              $        20,000                --
      Common stock issued for
      interest payment                    $       673,929   $            --
      Common stock issued for
       convertible notes conversion       $     7,610,000   $            --
      Marketable securities used to
       settle for liabilities assumed
       from  reorganization               $     1,133,807   $            --
      Derivative liability reclassified
       to equity upon conversion          $     6,287,408   $            --



              RECONCILIATION OF NON-GAAP NET INCOME AND DILUTED EPS

                                     For Three Months      For Nine Months
                                      Ended March 31        Ended March 31
                                     2010        2009       2010        2009


    Net Income                $15,184,265 $8,855,848  $22,664,082 $17,388,546

    Loss from discontinued
     operations                    36,000    103,008      200,769   1,693,830
    Unrealized loss (gain)  on
     trading securities,
    net                            (4,592)  (204,134)    (270,339)  1,255,522
    Loss (gain) in fair value of
     derivative
    liabilities               (11,624,079)        --  (13,490,071)         --
    Amortization of debt
     discount and debt
    issuance costs related to
     convertible
    debentures                  4,060,333   1,203,365  12,080,920   3,189,752



    Adjusted Net Income        $7,651,927  $9,958,087 $21,185,361 $23,527,650

    Diluted Weighted Average
     Number of
    Shares**                   15,235,811  14,632,762  15,234,156  14,305,589

    Adjusted Diluted Earnings
     per Share                  $    0.50   $    0.68 $     1.39   $    1.64


    ** Including outstanding options and warrants using treasury method of
       calculation plus the number of shares if converted from
       the convertible debt


    For more information, please contact:

    Jiangbo Pharmaceuticals, Inc.
     Ms. Elsa Sung, CFO
     Phone: +1-954-903-9378 x2
     Email: elsasung@jiangbo.com
     Web:   http://www.jiangbopharma.com

    CCG Investor Relations
     Ms. Lei Huang, Account Manager
     Phone: +1-646-833-3417
     Email: lei.huang@ccgir.com
     Web:   http://www.ccgirasia.com

     Mr. Crocker Coulson, President
     Phone: +1-646-213-1915
     Email: crocker.coulson@ccgir.com


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SOURCE Jiangbo Pharmaceuticals, Inc.
Copyright©2010 PR Newswire.
All rights reserved


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