##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
 FOR THE QUARTERLY PERIOD ENDED March 31, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
 FOR THE TRANSITION PERIOD FROM TO
 Commission file number 000-51409
 BMP SUNSTONE CORPORATION
 (Exact name of registrant as specified in its charter)
 Delaware
    
    20-0434726(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)600 W. Germantown Pike, Suite 400Plymouth Meeting, Pennsylvania
    
    19462(Address of principal executive offices)
    
    (Zip Code)
 (610) 940-1675
(Registrants telephone number, including area code)
 Beijing Med-Pharm Corporation
(Former name, if changed since last report)
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller Reporting Company o(Do not check if a smaller reporting company)
 o þ




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##### 



BMP SUNSTONE CORPORATION
INDEX
 PageNo.Part I. FINANCIAL INFORMATIONItem 1. Financial Statements (unaudited)Condensed Consolidated Balance Sheets as of March 31, 2008 (Unaudited) and December 31, 2007
    
    
    3Condensed Consolidated Statements of Operations (Unaudited) for the three months ended
March 31, 2008 and 2007
    
    
    4Condensed Consolidated Statements of Stockholders Equity (Unaudited) for the three months
ended March 31, 2007
    
    
    5Condensed Consolidated Statements of Cash Flows (Unaudited) for the three months ended March
31, 2008 and 2007
    
    
    6Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results Of Operations
    
    
    14Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    21Item 4. Controls and Procedures
    
    
    22Part II OTHER INFORMATIONItem 1A. Risk Factors
    
    
    23Item 4. Submission of Matters to a Vote of Security Holders
    
    
    23Item 6. Exhibits
    
    
    24SIGNATURESCertificate of the Chief Executive Officer required by Rule 13a-14 (a)Certificate of the Chief Financial Officer required by Rule 13a-14 (a)Certificate of the Chief Executive Officer required by Rule 13a-14(b)Certificate of the Chief Financial Officer required by Rule 13a-14(b)Exhibit 10.1Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
  2




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PART I. FINANCIAL INFORMATION
 
 ITEM 1. Financial Statements
 BMP SUNSTONE CORPORATION AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 ($ in thousands)
 (Unaudited)March 31,
    
    
    December 31,2008
    
    
    2007AssetsCurrent Assets:Cash and Cash Equivalents
    
    $
    8,398
    
    
    $
    22,837Restricted Cash
    
    
    1,297
    
    
    
    1,297Accounts
Receivable, net of allowance for doubtful accounts of $50 and $44
    
    
    27,821
    
    
    
    11,707Inventory,
net of allowance for obsolescence of $0
    
    
    7,581
    
    
    
    2,897Bills Receivable
    
    
    14,386
    
    
    
    Note Receivable
    
    
    659
    
    
    
    659Due from Related Party
    
    
    2,169
    
    
    
    Other Receivables
    
    
    1,499
    
    
    
    720VAT Receivable
    
    
    870
    
    
    
    828Prepaid Expenses and Other Current Assets
    
    
    4,748
    
    
    
    2,444Total Current Assets
    
    
    69,428
    
    
    
    43,389Property and Equipment, net
    
    
    23,355
    
    
    
    745Investment in Hong Kong Health Care
    
    
    
    
    
    
    33,126Investment in Alliance BMP
    
    
    15,093
    
    
    
    Investments, at Cost
    
    
    142
    
    
    
    137Goodwill
    
    
    65,953
    
    
    
    Other Assets
    
    
    923
    
    
    
    3,053Intangible Assets, net of accumulated amortization
    
    
    43,697
    
    
    
    473Total Assets
    
    $
    218,591
    
    
    $
    80,923Liabilities and Stockholders EquityCurrent Liabilities:Notes Payable
    
    $
    4,871
    
    
    $
    117Accounts Payable
    
    
    13,972
    
    
    
    8,784Deferred Revenue
    
    
    1,725
    
    
    
    151Due to Related Parties
    
    
    4,656
    
    
    
    Accrued Expenses
    
    
    19,234
    
    
    
    3,952Total Current Liabilities
    
    
    44,458
    
    
    
    13,004Long-Term Debt, net of debt discount
    
    
    22,525
    
    
    
    18,910Deferred Taxes
    
    
    10,934
    
    
    
    Total Liabilities
    
    
    77,917
    
    
    
    31,914Stockholders Equity:Common Stock, $.001 Par Value; 75,000,000 and 50,000,000 Shares Authorized as of March
31, 2008 and December 31, 2007, respectively; 39,492,026 and 31,240,913 Shares Issued and
Outstanding as of March 31, 2008 and December 31, 2007, respectively
    
    
    39
    
    
    
    31Additional Paid in Capital
    
    
    156,317
    
    
    
    66,123Common Stock Warrants
    
    
    9,156
    
    
    
    9,747Accumulated Deficit
    
    
    (30,078
    )
    
    
    (27,600
    )Accumulated Other Comprehensive Income
    
    
    5,240
    
    
    
    708Total Stockholders Equity
    
    
    140,674
    
    
    
    49,009Total Liabilities and Stockholders Equity
    
    $
    218,591
    
    
    $
    80,923
  3




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BMP SUNSTONE CORPORATION AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
 ($ in thousands except per share amounts)
 For the three months ended March 31,2008
    
    
    2007(in $ thousands except per share amounts)Revenues:
    
    $
    
    
    
    $Third Parties
    
    
    17,298
    
    
    
    5,685Related Parties
    
    
    791
    
    
    
    Total Revenues
    
    
    18,089
    
    
    
    5,685Cost of
Goods Sold
    
    
    10,368
    
    
    
    5,031Gross Margin
    
    
    7,721
    
    
    
    654Sales and Marketing Expenses
    
    
    5,961
    
    
    
    614General and Administration Expenses
    
    
    3,156
    
    
    
    1,859Total Operating Expenses
    
    
    9,117
    
    
    
    2,473Loss From Operations
    
    
    (1,396
    )
    
    
    (1,819
    )Other Income (Expense):Interest Income
    
    
    48
    
    
    
    150Interest Expense
    
    
    (1,569
    )
    
    
    (19
    )Debt Issuance Cost Amortization
    
    
    (210
    )
    
    
    Equity
Method Investment Income
    
    
    996
    
    
    
    Total Other
Income (Expense)
    
    
    (735
    )
    
    
    131Loss Before Provision For Income Taxes
    
    
    (2,131
    )
    
    
    (1,688
    )Provision For Income Taxes
    
    
    347
    
    
    
    Net Loss
    
    $
    (2,478
    )
    
    $
    (1,688
    )Basic and Fully-Diluted Loss Per Share
    
    $
    (0.07
    )
    
    $
    (0.06
    )Basic and Fully-Diluted Weighted-average Shares Outstanding
    
    
    35,096
    
    
    
    26,588
  4




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BMP SUNSTONE CORPORATION AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (Unaudited)
 ($ in thousands)
 AccumulatedOtherComprehensiveIncomeAdditional
    
    
    Common
    
    
    
    
    
    
    Foreign
    
    
    TotalNumber
    
    
    $.001 Par
    
    
    Paid-in
    
    
    Stock
    
    
    Accumulated
    
    
    Currency
    
    
    Stockholdersof Shares
    
    
    Value
    
    
    Capital
    
    

Warrants
    
    
    Deficit
    
    
    Translation
    
    
    EquityBalance as of December 31, 2007
    
    
    31,240,913
    
    
    $
    31
    
    
    $
    66,123
    
    
    $
    9,747
    
    
    $
    (27,600
    )
    
    $
    708
    
    
    $
    49,009Stock-Based Compensation
    
    
    
    
    
    
    
    
    
    
    563
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    563Common Stock Issuance
    
    
    8,000,000
    
    
    
    8
    
    
    
    88,611
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    88,619Warrant and Option Exercise
    
    
    251,113
    
    
    
    
    
    
    
    1,020
    
    
    
    (591
    )
    
    
    
    
    
    
    
    
    
    
    429Net Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,478
    )
    
    
    
    
    
    
    (2,478
    )Other Comprehensive (Loss) IncomeForeign Currency Translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,532
    
    
    
    4,532Total Comprehensive (Loss)Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,054Balance as of March 31, 2008
    
    
    39,492,026
    
    
    $
    39
    
    
    $
    156,317
    
    
    $
    9,156
    
    
    $
    (30,078
    )
    
    $
    5,240
    
    
    $
    140,674
  5




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BMP SUNSTONE CORPORATION AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
  Balance Sheet
 For the three months ended March 31,2008
    
    
    2007Cash Flows from Operating Activities:Net Loss
    
    $
    (2,478
    )
    
    $
    (1,688
    )Adjustments to Reconcile Net Loss to Net Cash Used in
Operating Activities:Bad Debt
Expense
    
    
    4
    
    
    
    Depreciation and Amortization of Property and Equipment
    
    
    257
    
    
    
    26Amortization
of Intangible Assets and Inventory at Fair Value
    
    
    1,103
    
    
    
    64Stock-Based Compensation
    
    
    563
    
    
    
    316Amortization
of Debt Discount and Deferred Debt Issuance Costs
    
    
    977
    
    
    
    Equity Method Investment Income
    
    
    (996
    )
    
    
    Loss on Disposal of Asset
    
    
    2
    
    
    
    7Increase in Accounts Receivable
    
    
    (1,359
    )
    
    
    (185
    )Increase in Inventory
    
    
    (1,627
    )
    
    
    (765
    )Decrease in Other Receivables
    
    
    1,279
    
    
    
    154(Increase) Decrease in Value Added Tax Receivable
    
    
    (8
    )
    
    
    41Increase in Prepaid Expenses Other Current Assets
    
    
    (1,621
    )
    
    
    (82
    )(Decrease) Increase in Accounts Payable
    
    
    (135
    )
    
    
    925Increase in Deferred Revenue
    
    
    
    
    
    
    100Increase
(Decrease) in
Accrued Expenses
    
    
    2,515
    
    
    
    (63
    )Net Cash Used in Operating Activities
    
    
    (1,524
    )
    
    
    (1,150
    )Cash Flows from Investing Activities:Acquisition
Payment Due to Wanwei Group
    
    
    
    
    
    
    (214
    )Acquisition of Property and Equipment
    
    
    (726
    )
    
    
    (143
    )Cash
Received in Acquisition of Hong Kong Fly
    
    
    2,132
    
    
    
    Investment in Alliance BMP
    
    
    (12,319
    )
    
    
    Net Cash Used In Investing Activities
    
    
    (10,913
    )
    
    
    (357
    )Cash Flows from Financing Activities:Net Proceeds from Exercise of Warrants
    
    
    427
    
    
    
    534Payments on Note Payable
    
    
    (1,839
    )
    
    
    (73
    )Net Cash
(Used) Provided by Financing Activities
    
    
    (1,412
    )
    
    
    461Effect of exchange rate changes on cash
    
    
    (590
    )
    
    
    38Net Decrease in Cash and Equivalents
    
    
    14,439
    
    
    
    (1,008
    )Cash and Equivalents, Beginning
    
    
    22,837
    
    
    
    15,331Cash and Equivalents, Ending
    
    $
    8,398
    
    
    $
    14,323Supplemental Disclosure of Cash Flow Information:Cash Paid During the Years for:Income Taxes
    
    
    
    
    
    
    Interest
    
    
    126
    
    
    
    26
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BMP SUNSTONE CORPORATION AND SUBSIDIARIES
 
 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 1. Basis of Presentation:
  Earnings Per Share:
 Significant
Account Policy:
 Bills
receivable
 Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities,
 Reclassification:
 Recent Accounting Pronouncements:
   
    
    Level 1Unadjusted quoted prices in active markets that are accessible at the
measurement date for identical, unrestricted assets or liabilities.
 7




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##### Table of Contents




    
    Level 2Inputs other than quoted prices included within Level 1 that are observable for
the asset or liability, either directly or indirectly, including quoted prices for
similar assets or liabilities in active markets; quoted prices for identical or similar
assets or liabilities in markets that are not active; inputs other than quoted prices
that are observable for the asset or liability (e.g., interest rates); and inputs that
are derived principally from or corroborated by observable market data by correlation
or other means.
    
    Level 3Inputs that are both significant to the fair value measurement and unobservable.
     2. Acquisitions:   Acquisition of Guangzhou Pharmaceuticals Corporation
  Acquisition of Sunstone
   8




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##### Table of Contents



($ in thousands)Purchase PriceValue of
shares to acquire 51% of Hong Kong Health Care (i)
    
    $
    88,619Direct
acquisition costs
    
    
    570$
    89,189Less: Fair Value of identifiable assets acquired:Cash
    
    
    1,075Accounts receivable
    
    
    7,094Bills Receivable
    
    
    7,768Inventory
    
    
    2,059Prepaid expenses and other assets
    
    
    787Due from related parties
    
    
    1,013Deferred income taxes
    
    
    165Land use rights
    
    
    1,045Fixed assets
    
    
    9,91530,921Plus: Fair value of liabilities assumed:Borrowings
    
    
    4,724Accounts payable
    
    
    2,280Accrued liabilities and other payables
    
    
    6,984Due to related parties
    
    
    2,354Deferred tax
liability (ii)
    
    
    11,19827,540Excess of cost over fair value of net assets acquired-intangible assets and goodwill
    
    $
    85,808
  (i)
    
    Under the terms of the Sale and Purchase Agreement dated
September 28, 2007, 400,000 shares of the 8,000,000 to the
Sellers remain contingent on specified events or transactions in the
future and are not included in the above purchase price valuation until earned.(ii)
    
    Deferred tax liability of $11,198,000 was recorded at February 18, 2008 representing 25% tax rate on intangible assets acquired as part of the acquisition of Sunstone.
 9




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##### Table of Contents



Weighted AverageIntangible assets
    
    Amortization Period
    
    
    Gross Carrying AmountCustomer Relationships
    
    10 Years
    
    $
    9,719Trademarks
    
    Indefinite
    
    
    9,222Favorable contracts
    
    17.3 Years
    
    
    3,121$
    22,062
 Equity
Method Investment Income:
   ($ amounts in thousands)Equity in earnings of Hong Kong Health Care for the period January 1, 2008 through
February 17, 2008
    
    $
    1,345Less adjustments of excess fair value:Amortization expense of intangible assets
    
    
    (349
    )Total equity method investment gain after amortization
    
    $
    996
 Pro Forma Information
  Three months ended($ in thousands, except per share amounts)
    
    March 31, 2008Pro Forma Revenue
    
    $
    26,826Pro Forma Net Loss
    
    $
    (1,448
    )Loss per Share  Basic and Fully Diluted Pro forma
    
    $
    (0.04
    )
  3. Segment Information:
  Sunstone OTC Segment
  Pharmaceutical Distribution Segment
   Sales and Marketing Segment
   10




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##### Table of Contents



RevenueThree months ended March 31,2008
    
    
    2007($ in thousands)OTC Sales(i)
    
    $
    9,457
    
    
    $
    Pharmaceutical Distribution
    
    
    8,632
    
    
    
    5,685Sales and Marketing intersegment
    
    
    319
    
    
    
    101Eliminations
    
    
    (319
    )
    
    
    (101
    )Total Revenue
    
    $
    18,089
    
    
    
    5,685
 Operating Income (Loss)Three months ended March 31,2008
    
    
    2007($ in thousands)OTC Sales(i)
    
    $
    1,283
    
    
    $
    Pharmaceutical Distribution
    
    
    (390
    )
    
    
    (221
    )Sales and Marketing
    
    
    (695
    )
    
    
    (461
    )Corporate
    
    
    (1,406
    )
    
    
    (1,231
    )Eliminations
    
    
    (188
    )
    
    
    94Total Operating Loss
    
    $
    (1,396
    )
    
    $
    (1,819
    )
  4.
Accrued Expenses
  2008
    
    2007Accrued
salary and related
    
    $
    2,600
    
    
    $
    802Accrued
professional fees
    
    
    330
    
    
    
    602Accrued
taxes and related expenses
    
    
    4,763
    
    
    
    248Accrued
social welfare and related expenses
    
    
    1,352
    
    
    
    252Accrued
other
    
    
    10,189
    
    
    
    2,046Total
Accrued expenses
    
    $
    19,234
    
    
    $
    3,952
 5. Shareholders Equity
  Three months ended March 31,2008
    
    2007Weighted average basic shares
    
    
    35,096,301
    
    
    
    26,588,464
  Three months ended March 31,2008
    
    2007Number of shares
    
    
    1,501,842
    
    
    
    2,030,684Range of exercise price
    
    $
    1.15 - $7.95
    
    
    $
    1.15-$7.95
 6. Stock-Based Compensation:
  11




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Three months ended March 31,2008
    
    2007Expected life (years)
    
    
    5.0
    
    
    
    5.0Risk-free interest rate
    
    
    2.36
    %
    
    
    5.15
    %Expected Volatility
    
    
    55
    %
    
    
    78.83
    %Expected Dividend yield
    
    
    0.00
    %
    
    
    0.00
    %
    Weighted-Weighted-
    
    
    AverageAverage
    
    
    RemainingExercise
    
    
    Contractual
    
    
    AggregatePrice
    
    
    Term
    
    
    IntrinsicOptions
    
    
    per Share
    
    
    (in years)
    
    
    ValueOutstanding on January 1, 2008
    
    
    2,920,626
    
    
    $
    4.30
    
    
    
    
    
    
    $
    Granted
    
    
    170,000
    
    
    
    8.69
    
    
    
    
    
    
    
    Exercised
    
    
    (79,625
    )
    
    
    1.56
    
    
    
    
    
    
    
    Canceled
    
    
    (22,354
    )
    
    
    9.00Outstanding on March 31, 2008
    
    
    2,988,647
    
    
    $
    4.58
    
    
    
    7.63
    
    
    $
    13,701,060Exercisable on March 31, 2008
    
    
    1,556,764
    
    
    $
    1.82
    
    
    
    6.50
    
    
    $
    2,830,921
  12




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##### Table of Contents



Weighted-AverageGrant-Date FairNonvested Shares
    
    Shares
    
    
    ValueNonvested at January 1, 2008
    
    
    1,400,469
    
    
    $
    4.87Granted
    
    
    170,000
    
    
    
    4.29Vested
    
    
    (122,586
    )
    
    
    2.33Canceled
    
    
    (21,000
    )
    
    
    6.22Non-vested at March 31, 2008
    
    
    1,426,883
    
    
    $
    4.99
  7. Related Party Transactions
   Balance atMarch 31, 2008($ in thousands)Amounts due from related parties:Accounts receivable due from entities controlled by Han
    
    $
    1,575Loan due from Han
    
    
    572Amounts due from Tong
    
    
    22$
    2,169Amounts due to related parties:Due to Han and entities controlled by Han
    
    $
    1,627Due to Tong
and entities controlled by Tong
    
    
    3,029$
    4,656
 13




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##### Table of Contents



ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion should be read in conjunction with the Consolidated Financial
Statements and notes thereto contained herein and in conjunction with the financial statements and
notes thereto included in the Companys Annual Report on Form 10-K for the year ended December 31,
2007.
 Forward-Looking Statements
  Overview
  
    
    pre-market entry analysis;
    
    clinical trial management;
    
    product registration;
    
    market research;
    
    pharmaceutical marketing to physicians, hospitals and other healthcare providers;
    
    OTC marketing to retail pharmacies; and
    
    pharmaceutical distribution.
  14




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##### Table of Contents



Financial Overview
    Acquisitions
 Acquisition of Guangzhou Pharmaceutical Corporation
  Acquisition of Sunstone
    15




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##### Table of Contents



Liquidity and Capital Resources
   
    
    our operating expenses and general working capital;
    
    the marketing of our current and future products; and
    
    our pursuit of internal growth and strategic acquisitions including
our proposed acquisition of Shanghai Rongheng Pharmaceutical Company
Limited, or Rongheng.
      16




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##### Table of Contents



Results of Operations
 Critical Accounting Policies
    Bills receivable
 Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities
 Investment Valuation
  17




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##### Table of Contents



Three months Ended March 31, 2008 Compared to Three months Ended March 31, 2007
  For the Three Months Ended March 31,
    
    
    For the Three Months Ended March 31,($ amounts in thousands)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Net Revenues
    
    $
    18,089
    
    
    $
    5,685
    
    
    
    100.0
    %
    
    
    100.0
    %Cost of Sales
    
    
    10,368
    
    
    
    5,031
    
    
    
    57.3
    %
    
    
    88.5
    %Gross Margin
    
    
    7,721
    
    
    
    654
    
    
    
    42.7
    %
    
    
    11.5
    %Sales and Marketing Expenses
    
    
    5,961
    
    
    
    614
    
    
    
    33.0
    %
    
    
    10.8
    %General and Administrative Expenses
    
    
    3,156
    
    
    
    1,859
    
    
    
    17.4
    %
    
    
    32.7
    %Total Operating Expenses
    
    
    9,117
    
    
    
    2,473
    
    
    
    50.4
    %
    
    
    43.5
    %Loss From Operations
    
    
    (1,396
    )
    
    
    (1,819
    )
    
    
    -7.7
    %
    
    
    -32.0
    %Other Income (Expense):Interest Income
    
    
    48
    
    
    
    150
    
    
    
    0.3
    %
    
    
    2.6
    %Interest Expense
    
    
    (1,569
    )
    
    
    (19
    )
    
    
    -8.7
    %
    
    
    -0.3
    %Debt Issuance Cost Amortization
    
    
    (210
    )
    
    
    
    
    
    
    -1.2
    %
    
    
    0.0
    %Equity
Method Investment Income
    
    
    996
    
    
    
    
    
    
    
    5.5
    %
    
    
    0.0
    %Total Other Income (Expense)
    
    
    (735
    )
    
    
    131
    
    
    
    -4.1
    %
    
    
    2.3
    %Loss Before Provision for Income Taxes
    
    
    (2,131
    )
    
    
    (1,688
    )
    
    
    -11.8
    %
    
    
    -29.7
    %Provision for Income Taxes
    
    
    347
    
    
    
    
    
    
    
    1.9
    %
    
    
    0.0
    %Net Loss
    
    $
    (2,478
    )
    
    $
    (1,688
    )
    
    
    -13.7
    %
    
    
    -29.7
    %
 Net Revenues
   Three Months Ended March 31,($ amounts in thousands)
    
    2008
    
    
    2007
    
    
    $ Increase
    
    
    % IncreaseOTC Sales
    
    $
    9,457
    
    
    $
    
    
    
    $
    9,457
    
    
    
    N/CDistribution products
    
    
    7,435
    
    
    
    5,279
    
    
    
    2,156
    
    
    
    41
    %Licensed products
    
    
    1,197
    
    
    
    406
    
    
    
    791
    
    
    
    195
    %$
    18,089
    
    
    $
    5,685
    
    
    $
    12,404
    
    
    
    218
    %
 OTC Sales
 Distribution Products
 Licensed Products
 18




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##### Table of Contents



Cost of Sales:
  Sales and Marketing Expenses
  General and Administrative Expenses:
  Interest Income:
  Interest Expense:
  19




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##### Table of Contents



Debt Issuance Cost Amortization:
  Equity
Method Investment Income:
   ($ amounts in thousands)Equity in earnings of Hong Kong Health Care for the period January 1, 2008 through
February 17, 2008
    
    $
    1,345Less adjustments of excess fair value:Amortization expense of intangible assets
    
    
    (349
    )Total equity method investment gain after amortization
    
    $
    996
 20




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##### Table of Contents



ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
 Foreign Exchange Rate Sensitivity
    Interest Rate Sensitivity
  21




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##### Table of Contents



ITEM 4. Controls and Procedures
 (a) Evaluation of Disclosure Controls and Procedures
      (b) Changes in Internal Control Over Financial Reporting
  22




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##### Table of Contents



PART II  OTHER INFORMATION
 
 ITEM 1A. Risk Factors
  
 Item 4. Submission of Matters to a Vote of Security Holders
   For
    
    Against
    
    Withheld
    
    Abstain
    
    Broker Non-Votes1.
    
    To approve the
issuance and sale
of 8,000,000 shares
of the Companys
common stock, par
value $0.001 per
share, to Han
Zhiqiang and Tong
Zhijun in exchange
for a 51% interest
in Hong Kong Fly
International
Health Care
Limited, a Hong
Kong corporation
that holds a 100%
equity interest in
Sunstone
Pharmaceutical Co.,
Ltd.
    
    
    19,648,271
    
    
    
    105,530
    
    
    
    
    
    
    
    16,400
    
    
    
    6,662,8792.
    
    To approve an
amendment to the
Companys
Certificate of
Incorporation to
change the name of
the Company from
Beijing Med-Pharm
Corporation to BMP
Sunstone
Corporation
    
    
    26,296,376
    
    
    
    131,642
    
    
    
    
    
    
    
    5,062
    
    
    
    03.
    
    To approve an
amendment to the
Companys
Certificate of
Incorporation to
increase the
authorized number
of shares of the
Companys common
stock, par value
$0.001 per share,
from 50,000,000
shares to
75,000,000 shares
    
    
    23,412,821
    
    
    
    3,014,852
    
    
    
    
    
    
    
    5,406
    
    
    
    1
 23




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##### Table of Contents



ITEM 6. Exhibits
 10.1
    
    Employment Agreement, dated as of March 31, 2008, between BMP Sunstone Corporation and Fred
M. Powell31.1
    
    Certificate of the Chief Executive Officer of BMP Sunstone Corporation required by Rule
13a-14(a) under the Exchange Act.31.2
    
    Certificate of the Chief Financial Officer of BMP Sunstone Corporation required by Rule
13a-14(a) under the Exchange Act32.1
    
    Certificate of the Chief Executive Officer of BMP Sunstone Corporation required by Rule
13a-14(b) under the Exchange Act32.2
    
    Certificate of the Chief Financial Officer of BMP Sunstone Corporation required by Rule
13a-14(b) under the Exchange Act
 24




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##### Table of Contents



SIGNATURES
  BMP SUNSTONE CorporationDate: May 19, 2008
    /s/ DAVID GAODavid GaoChief Executive Officer
(Principal Executive Officer)Date: May 19, 2008
    /s/ FRED M. POWELLFred M. PowellChief Financial Officer
(Principal Financial and Accounting Officer) 25