Biostar Pharmaceuticals to acquire a Xi'an-based medical equipment and nutrients manufacturer for $1.1M

Potential acquisition will expand product portfolio and Introduces Medical Devices to BioStar's Distribution Network

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 it has signed a letter of intent ("LOI') with a Xi'an-based medical equipment and nutrients manufacturer ("Acquiree") to acquire 100% of the Acquiree for $1.1 million in cash.

The Acquiree manufactures and distributes topical hernia treatment belts with two traditional Chinese medicine bags being applied to body points associated with hernia. The Acquiree also manufactures a nutraceutical product for treatment of gynecological inflammation in young and middle-aged women. The Acquiree has been manufacturing and selling its products in Xi'an and an adjacent province since 2004. Biostar has calculated the revenue contribution from the acquisition to add approximately $3.0 million in revenues to BioStar's revenues in 2010.

"Our potential acquisition of this company will add a unique medical device and other nutrients to our portfolio of medicines as well as open a medical equipment distribution opportunity for us," began Mr. Rongua Wang, Chairman and CEO of Biostar Pharmaceuticals. "We have been monitoring this target acquisition for the last couple of years and have always been impressed with the market potential of its product line. If the acquisition is successful, we anticipate a very smooth assimilation of their products into our distribution network and corporate culture," Mr. Wang concluded.