Fremont, CA – 
Third Quarter 2021 Financial Results
- Revenues. The Company generated $98,999 and $115,553 in revenues for the three months ended September 30, 2021 and 2020, respectively; and incurred $393 and $8,619 in cost of sales for the three months ended September 30, 2021 and 2020, respectively. The decrease in revenues was mainly due to the impact of COVID-19 on our CDMO business sector.
- Operating Expenses increased by $672,460, or 48%, to $2,069,160 for the three months ended September 30, 2021 from $1,396,700 for the three months ended September 30, 2020. Such increase in operating expenses was mainly due to the increase in selling, general and administrative expenses and research and development expenses. The Company’s selling, general and administrative expenses and stock-based compensation increased by $543,537, or 43%, mainly due to the increase in company’s marketing and Nasdaq up-list related expenses.
- Research and Development expenses increased by $128,923 or approximately 96% primarily because of new service agreements signed with vendors during the three months ended September 30, 2021.
- Other Income (Expense) was $8,643 and ($886,100) for the three months ended September 30, 2021 and 2020, respectively. The change was principally caused by the decrease in interest income and rental income, as well as decreasing loss on investment in equity securities and the increase in government grant income. Interest income was $9,333 for the three months ended September 30, 2021 as compared to $19,571 for the three months ended September 30, 2020. The decrease of $10,238, or approximately -49%, was primarily due to the repayment of certain related-party loans. Other income totaled $131,927 for the three months ended September 30, 2021 as compared to other expense of $171 for the three months ended September 30, 2020. The increase of $132,098 was primarily due to the receipt of the second round of PPP loan forgiveness during the third quarter of 2021.
- Net Loss was $1,886,244 for the three months ended September 30, 2021 compared to $2,131,131 for the three months ended September 30, 2020, representing a decrease of $244,887, or 11%.
Third Quarter 2021 Highlights
- The company completed a successful NASDAQ listing that resulted in improved trading liquidity for its shareholders and completion of a public offering of its shares.
- Selected the first study site and principal investigator for conducting Phase II clinical trials of Vitargus® in Australia.
- Strengthened its intellectual property protections with the filing of two new PCT (Patent Cooperation Treaty) applications in connection with ABVC medicines that help to treat major depressive disorder (MDD) and Attention-Deficit Hyperactivity Disorder (ADHD).
- Restructured its joint venture agreement with BioLite Japan K.K., a drug discovery and research firm, which strengthened the company’s global abilities to identify early-stage opportunities in drug development, digital health, and medical device technology, especially in Japan.
Dr. Howard Doong (M.D., Ph.D), Chief Executive Officer of ABVC BioPharma, commented, “ABVC is proud of its accomplishments since the start of the year, highlighted by clinical trial success that continued to demonstrate that botanically derived medicines are safe and effective.” Dr. Doong further noted, “Our successful public offering completed during the quarter and the subsequent exercise of our Series A warrants by many investors has provided sufficient cash to assure that we can meet our goals through mid-2023. And, we are particularly pleased that our up listing on to the Nasdaq exchange has resulted in materially improved liquidity of our stock coupled with a far wider investor base, including several prominent funds that specialize in the biotech sector. Heading into 2022, we continue to proceed down the right path with the development of our product pipeline.”
About ABVC BioPharma, Inc.
ABVC BioPharma is a clinical-stage biopharmaceutical company with an active pipeline of six drugs and one medical device (ABV-1701/Vitargus®) under development. For its drug products, it is focused on utilizing its licensed technology to conduct proof-of-concept trials through Phase II of the clinical development process at world-famous research institutions (such as Stanford University, University of California at San Francisco, and Cedars-Sinai Medical Center). For Vitargus®, the company intends to conduct the clinical trials through Phase III at various locations throughout the world.
Forward-Looking Statements
Clinical trials are in early stages, and there is no guarantee that any specific outcome will be achieved. This press release contains “forward-looking statements.” Such statements may be preceded by the words “intends,” “may,” “will,” “plans,” “expects,” “anticipates,” “projects,” “predicts,” “estimates,” “aims,” “believes,” “hopes,” “potential,” or similar words. Forward-looking statements are not guarantees of future performance, are based on certain assumptions, and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company’s control, and cannot be predicted or quantified, and, consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with (i) our inability to manufacture our product candidates on a commercial scale on our own, or in collaboration with third parties; (ii) difficulties in obtaining financing on commercially reasonable terms; (iii) changes in the size and nature of our competition; (iv) loss of one or more key executives or scientists; and (v) difficulties in securing regulatory approval to proceed to the next level of the clinical trials or to market our product candidates. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (SEC), including the Company’s Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Investors are urged to read these documents free of charge on the SEC’s website at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise.
This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that state or jurisdiction.
Contact
ICR, LLC
Lucy Peng
Phone: +1 646-677-1872
Email: Lucy.Peng@icrinc.com
| ABVC BIOPHARMA, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS |
||||||||
| September 30, 2021 |
December 31, 2020 |
|||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 3,715,609 | $ | 4,273,208 | ||||
| Restricted cash and cash equivalents | 734,163 | 728,163 | ||||||
| Short-term Investment | 111,320 | – | ||||||
| Accounts receivable, net | 331,367 | 159,712 | ||||||
| Accounts receivable – related parties, net | 141,826 | 143,435 | ||||||
| Due from related parties | 561,085 | 696,255 | ||||||
| Inventory, net | 60,007 | – | ||||||
| Prepayment for long-term investments | 639,738 | – | ||||||
| Prepaid expense and other current assets | 815,916 | 172,193 | ||||||
| Total Current Assets | 7,111,031 | 6,172,966 | ||||||
| Property and equipment, net | 527,764 | 514,834 | ||||||
| Operating lease right-of-use assets | 1,554,280 | 1,772,747 | ||||||
| Goodwill, net | – | – | ||||||
| Long-term investments | 1,006,533 | 1,190,727 | ||||||
| Deferred tax assets | 1,993,789 | 1,790,597 | ||||||
| Prepaid expenses – noncurrent | 120,320 | 119,315 | ||||||
| Security deposits | 41,099 | 45,519 | ||||||
| Total Assets | $ | 12,354,816 | $ | 11,606,705 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | 16,497 | $ | 23,044 | ||||
| Short-term bank loans | 1,637,250 | 1,629,000 | ||||||
| Short-term loan | – | 100,000 | ||||||
| Notes payable | – | 106,800 | ||||||
| Accrued expenses and other current liabilities | 1,133,748 | 2,118,854 | ||||||
| Advance from customers | 10,985 | 12,070 | ||||||
| Operating lease liabilities – current portion | 342,131 | 316,178 | ||||||
| Due to related parties | 298,269 | 288,445 | ||||||
| Convertible notes payable – related parties, current portion | – | 250,000 | ||||||
| Total Current Liabilities | 3,438,880 | 4,844,391 | ||||||
| Paycheck Protection Program loan payable | 104,167 | 124,400 | ||||||
| Tenant security deposit | 9,880 | 19,280 | ||||||
| Operating lease liability – noncurrent portion | 1,212,148 | 1,456,567 | ||||||
| Convertible notes payable – noncurrent portion | – | 2,500,000 | ||||||
| Total Liabilities | 4,765,075 | 8,944,638 | ||||||
| Equity | ||||||||
| Preferred stock, $0.001 par value, 20,000,000 authorized, nil shares issued and outstanding | – | – | ||||||
| Common stock, $0.001 par value, 100,000,000 authorized, 27,935,783 and 24,420,526 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively | 27,935 | 24,420 | ||||||
| Additional paid-in capital | 49,716,411 | 40,751,807 | ||||||
| Stock subscription receivable | (2,483,140 | ) | (3,160,360 | ) | ||||
| Accumulated deficit | (30,548,946 | ) | (25,642,387 | ) | ||||
| Accumulated other comprehensive income | 981,718 | 564,860 | ||||||
| Treasury stock | (9,100,000 | ) | (9,100,000 | ) | ||||
| Total Stockholders’ Equity | 8,593,978 | 3,438,340 | ||||||
| Noncontrolling interest | (1,004,237 | ) | (776,273 | ) | ||||
| Total Equity | 7,589,741 | 2,662,067 | ||||||
| Total Liabilities and Equity | $ | 12,354,816 | $ | 11,606,705 | ||||
ABVC BIOPHARMA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenues | $ | 98,999 | $ | 115,553 | $ | 393,590 | $ | 420,852 | ||||||||
| Cost of revenues | 393 | 8,619 | 2,284 | 16,814 | ||||||||||||
| Gross profit | 98,606 | 106,934 | 391,306 | 404,038 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Selling, general and administrative expenses | 1,579,996 | 1,262,199 | 3,979,283 | 2,693,001 | ||||||||||||
| Research and development expenses | 263,424 | 134,501 | 743,617 | 366,374 | ||||||||||||
| Stock-based compensation | 225,740 | – | 927,220 | 999,820 | ||||||||||||
| Total operating expenses | 2,069,160 | 1,396,700 | 5,650,120 | 4,059,195 | ||||||||||||
| Loss from operations | (1,970,554 | ) | (1,289,766 | ) | (5,258,814 | ) | (3,655,157 | ) | ||||||||
| Other income (expense) | ||||||||||||||||
| Interest income | 9,333 | 19,571 | 72,584 | 39,641 | ||||||||||||
| Interest expense | (38,677 | ) | (16,311 | ) | (251,577 | ) | (288,353 | ) | ||||||||
| Rent income | 2,624 | 4,774 | 60,822 | 15,254 | ||||||||||||
| Rent income – related parties | 1,200 | 1,200 | 3,600 | 3,600 | ||||||||||||
| Impairment loss | – | (8,507 | ) | – | (952,711 | ) | ||||||||||
| Investment loss | – | 665 | – | (38,272 | ) | |||||||||||
| Gain/Loss on foreign exchange changes | (5,999 | ) | (90 | ) | (10,806 | ) | 8,569 | |||||||||
| Gain/Loss on investment in equity securities | (91,765 | ) | (887,231 | ) | (193,147 | ) | (1,067,298 | ) | ||||||||
| Other (expense) income | (404 | ) | (171 | ) | (171 | ) | 176,330 | |||||||||
| Government grant income | 132,331 | – | 256,731 | – | ||||||||||||
| Total other expenses | 8,643 | (886,100 | ) | (61,964 | ) | (2,103,240 | ) | |||||||||
| Loss before provision income tax | (1,961,911 | ) | (2,175,866 | ) | (5,320,778 | ) | (5,758,397 | ) | ||||||||
| Provision for income tax | (75,667 | ) | (44,735 | ) | (186,255 | ) | (133,947 | ) | ||||||||
| Net loss | (1,886,244 | ) | (2,131,131 | ) | (5,134,523 | ) | (5,624,450 | ) | ||||||||
| Net loss attributable to noncontrolling interests | (79,756 | ) | (285,085 | ) | (227,964 | ) | (681,569 | ) | ||||||||
| Net loss attributed to ABVC and subsidiaries | (1,806,488 | ) | (1,846,046 | ) | (4,906,559 | ) | (4,942,881 | ) | ||||||||
| Foreign currency translation adjustment | 16,137 | (25,384 | ) | 416,858 | (42,403 | ) | ||||||||||
| Comprehensive loss | $ | (1,790,351 | ) | $ | (1,871,430 | ) | $ | (4,489,701 | ) | $ | (4,985,284 | ) | ||||
| Net loss per share: | ||||||||||||||||
| Basic and diluted | $ | (0.07 | ) | $ | (0.09 | ) | $ | (0.20 | ) | $ | (0.25 | ) | ||||
| Weighted average number of common shares outstanding: | ||||||||||||||||
| Basic and diluted | 26,882,181 | 19,488,168 | 25,053,522 | 19,486,959 | ||||||||||||
ABVC BIOPHARMA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Nine Months Ended September 30, |
||||||||||||||||||||
| 2021 | 2020 | |||||||||||||||||||
| Cash flows from operating activities | ||||||||||||||||||||
| Net loss | $ | (5,134,523 | ) | $ | (5,624,450 | ) | ||||||||||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||||||||
| Depreciation | 8,725 | 30,329 | ||||||||||||||||||
| Stock based compensation for non employees | 927,220 | 999,820 | ||||||||||||||||||
| Gain/Loss on investment in equity securities | 193,147 | 1,067,298 | ||||||||||||||||||
| Government grant income | (256,731 | ) | – | |||||||||||||||||
| Other non-cash income and expenses | – | (15,360 | ) | |||||||||||||||||
| Investment loss | – | 990,982 | ||||||||||||||||||
| Deferred tax | (187,055 | ) | (136,797 | ) | ||||||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||||||
| Decrease (increase) in accounts receivable | (171,655 | ) | 14,051 | |||||||||||||||||
| Decrease (increase) in prepaid expenses and deposits | (647,219 | ) | 47,310 | |||||||||||||||||
| Decrease (increase) in due from related parties | (45,784 | ) | 381,918 | |||||||||||||||||
| Increase (decrease) in accounts payable | (6,547 | ) | (921 | ) | ||||||||||||||||
| Increase (decrease) in inventory | (59,673 | ) | – | |||||||||||||||||
| Increase (decrease) in notes payable | – | 22,806 | ||||||||||||||||||
| Increase (decrease) in accrued expenses and other current liabilities | (338,928 | ) | 429,051 | |||||||||||||||||
| Increase (decrease) in advance from others | (1,085 | ) | 332 | |||||||||||||||||
| Increase (decrease) in due to related parties | 178,570 | (582,242 | ) | |||||||||||||||||
| Net cash used in operating activities | (5,541,538 | ) | (2,375,873 | ) | ||||||||||||||||
| Cash flows from investing activities | ||||||||||||||||||||
| Sale of investments | – | 137,088 | ||||||||||||||||||
| Loan to related parties | – | (469,627 | ) | |||||||||||||||||
| Purchase of investments | (110,700 | ) | – | |||||||||||||||||
| Purchases of property, plant and equipment | (17,503 | ) | ||||||||||||||||||
| Prepayment for equity investment | (636,174 | ) | – | |||||||||||||||||
| Net cash used in investing activities | (764,377 | ) | (332,539 | ) | ||||||||||||||||
| Cash flows from financing activities | ||||||||||||||||||||
| Proceeds from short-term loan | – | 100,000 | ||||||||||||||||||
| Proceeds from short-term borrowing from third parties | – | 512,212 | ||||||||||||||||||
| Proceeds from short-term borrowing from related parties | – | 72,433 | ||||||||||||||||||
| Issuance of common stock | 6,875,000 | 2,153,231 | ||||||||||||||||||
| Payment for offering costs | (850,429) | |||||||||||||||||||
| Repayment of convertible notes | (306,836 | ) | – | |||||||||||||||||
| Repayment of short-term loan | (100,000 | ) | – | |||||||||||||||||
| Repayment of notes payable | (107,100 | ) | – | |||||||||||||||||
| Proceeds from long-term loans | 236,498 | 124,400 | ||||||||||||||||||
| Repayment of long-term bank loans | (4,396 | ) | (263,483 | ) | ||||||||||||||||
| Net cash provided by financing activities | 5,742,737 | 2,698,793 | ||||||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents and restricted cash | 11,579 | 1,029 | ||||||||||||||||||
| Net increase (decrease) in cash and cash equivalents and restricted cash | (551,599 | ) | (8,590 | ) | ||||||||||||||||
| Cash and cash equivalents and restricted cash | ||||||||||||||||||||
| Beginning | 5,001,371 | 160,443 | ||||||||||||||||||
| Ending | $ | 4,449,772 | $ | 151,853 | ||||||||||||||||
| Supplemental disclosure of cash flows | ||||||||||||||||||||
| Cash paid during the year for: | ||||||||||||||||||||
| Interest expense paid | $ | 327,642 | $ | 130,309 | ||||||||||||||||
| Income taxes paid | $ | – | $ | – | ||||||||||||||||
| Non-cash financing and investing activities | ||||||||||||||||||||
| Common shares issued for debt conversion | $ | 2,693,550 | $ | 1,446,780 | ||||||||||||||||