The decrease in revenue was impacted by the relocation of the LRT manufacturing facility in the summer of 2009. The consolidation of the LRT facility necessitated GMP re-certification of six formulations at the new facility, delaying fulfillment of the purchase orders for those formulations.
Net income for the quarter was $5.44m and income attributable to the company after 5% minority interest was $5.28m mainly attributable to the forgiveness of debt and the decrease in the fair value of the outstanding financial derivatives. In comparison, during the quarter net loss was $2m and the company recorded net loss in the amount of $2.7m after 5% minority interest and an expense of $1.14m attributable to the increase in the fair value of the outstanding financial derivatives.
However, China Aoxing continued to improve its profitability and operating efficiency. Loss from operations for the quarter decreased 39% to $285,225 from $466,735 for the previous year quarter.
Zhenjiang Yue, chairman and chief executive officer of China Aoxing, said: “We are very pleased with our financial and business results of this period. As promised, we successfully restructured our capital structure and improved our financial condition significantly, forming the important basis of our future business expansion. The GMP re-certification of four dosage forms at our manufacturing facility is an important step and will help alleviate product backlog. We are excited about the prospects for our business in 2010 and will continue advancing the new generation of narcotics and pain medicine into the market place in China.”