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ABVC BioPharma Reports Second Quarter 2021 Results

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  • ABVC


Clinical Trials Continue Despite COVID-19 Restrictions

Fremont, CA, Aug. 12, 2021 (GLOBE NEWSWIRE) -- via NewMediaWire -- ABVC Biopharma, Inc., a clinical stage biopharmaceutical company developing therapeutic solutions in oncology/hematology, central nervous system (CNS), and ophthalmology, today announced its unaudited financial and operating results for the three-month period ended June 30, 2021.

  • Revenues.We generated $31,441 and $226,513 in revenues for the three months ended June 30, 2021 and 2020, respectively; and incurred $646 and $4,236 in cost of sales for the three months ended June 30, 2021 and 2020, respectively. The decrease in revenues was mainly due to the impact of COVID-19 onto our CDMO business sector.

  • Operating Expenses. Our operating expenses have increased by $650,010, or 46%, to $2,066,310 for the three months ended June 30, 2021, from $1,416,290 for the three months ended June 30, 2020. Such increase in operating expenses was mainly due to the increase in selling, general and administrative expenses and research and development expenses.

Our selling, general and administrative expenses and stock-based compensation increased by $430,224, or 34%, mainly due to the increase in company’s marketing and up-list related expenses.

Our research and development expenses increased by $219,796 or approximately 158% primarily because of new service agreements signed with vendors during the three months ended June 30, 2021.

  • Other Income (Expense). Our other expense was $77,005 for the three months ended June 30, 2021, as compared to $1,038,688 for the three months ended June 30, 2020. The change was principally caused by the decrease in impairment loss of $944,204 during the quarter, and increase in interest income and rental income, as well as decreasing loss on investment in equity securities, while deducted from decrease in net other income.

Interest income was $10,722 for the three months ended June 30, 2021, as compared to $9,350 for the three months ended June 30, 2020. The increase of $1,372, or approximately 15%, was primarily due to the interest income for various related-party loans.

Loss on investment in equity securities was $53,591 for the three months ended June 30, 2021, as compared to $109,656 for the three months ended June 30, 2020. The decrease of $56,065, or approximately 51%, was primarily due to the loss on investment in BioFirst.

Other income and government grant income totaled $162 for the three months ended June 30, 2021, as compared to $170,179 for the three months ended June 30, 2020. The decrease of $170,017, or approximately 100%, was primarily due to the tax refund for greenlight project recorded in the first half year of 2020.

  • Net Loss. As a result of the above factors, our net loss was $2,052,956 for the three months ended June 30, 2021, compared to $2,184,057 for the three months ended June 30, 2020, representing a decrease of $131,101, or 6%.

“In spite of elevated COVID-19 restrictions, we were pleased to make significant clinical study progress during Q2 with respect to Vitargus, our medical device, and MDD for Cancer Patients, our depression medicine for cancer patients,” said Dr. Howard Doong, ABVC BioPharma’s chief executive officer.“For example, we identified three potential trial sites and principal investigators in Australia to conduct further clinical trials of Vitargus beginning in Q4 of this year, the data of which may be included in the pivotal trial phase required by the US FDA to obtain marketing approval. And, in connection with our medicine addressing depression for cancer patients, MDD for Cancer Patients, we submitted all necessary protocol documents to Cedar-Sinai Medical Center that we believe will enable them to issue their final approval to initiate clinical trial Phase I/II for this drug before the end of 2021.”

Dr. Doong continued, “We also took steps during the quarter to expand our patent protection for our medicines that address MDD andAttention Deficit/Hyperactivity Disorderby applying for additional patents in both the United States and China that include the results of the Phase II human trials for these medicines.”

Subsequent to the quarter, the company completed a public offering of 1,100,000 units, consisting of 1,100,000 shares of its common stock, Series A Warrants to purchase up to 1,100,000 shares of common stock at $6.30 per share and Series B Warrants to purchase up to 1,100,000 shares of common stock at $10.00 per share, resulting in net proceeds to ABVC BioPharma of $6,021,585, after deducting the underwriting commissions and offering expenses payable by us. We intend to use the net proceeds from the offering to fund clinical trials and for working capital and general business purposes. In addition, while we have not entered into any agreements, commitments or understandings relating to any significant transaction, we may use a portion of the net proceeds to pursue acquisitions, joint ventures, and other strategic transactions.

The Company's common stock began trading on The Nasdaq Capital Market on August 3, 2021,under the ticker symbol "ABVC".

About ABVC Biopharma
ABVC Biopharma is a clinical-stage biopharmaceutical company 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). The company has an active pipeline of six drugs and one medical device (ABV-1701/Vitargus®) under development.
Disclaimer
Clinical trials are in early stages, and there is no guarantee that any specific outcome will be achieved. Past performance is not indicative of future results. Investments may be speculative and illiquid, and there is a risk of complete loss.
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.
Contact:

Andy An – Chief Financial Officer
765-610-8826
andyan@ambrivis.com

ABVC BIOPHARMA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS


June 30,
2021

December 31,
2020

(Unaudited)

ASSETS

Current Assets

Cash and cash equivalents

$

924,841

$

4,273,208

Restricted cash and cash equivalents

732,163

728,163

Accounts receivable, net

297,024

159,712

Accounts receivable - related parties, net

145,475

143,435

Due from related parties

710,257

696,255

Inventory, net

-

-

Prepaid expense and other current assets

817,889

172,193

Total Current Assets

3,627,649

6,172,966

Property and equipment, net

511,747

514,834

Operating lease right-of-use assets

1,636,436

1,772,747

Goodwill, net

-

-

Long-term investments

1,095,751

1,190,727

Deferred tax assets

1,912,356

1,790,597

Prepaid expenses – noncurrent

119,985

119,315

Security deposits

41,042

45,519

Total Assets

$

8,944,966

$

11,606,705

LIABILITIES AND EQUITY

Current Liabilities

Accounts payable

$

5,047

$

23,044

Short-term bank loans

1,634,500

1,629,000

Short-term loan

100,000

100,000

Notes payable

107,400

106,800

Accrued expenses and other current liabilities

1,865,254

2,118,854

Advance from customers

10,985

12,070

Operating lease liabilities – current portion

337,170

316,178

Due to related parties

315,676

288,445

Convertible notes payable - related parties, current portion

-

250,000

Total Current Liabilities

4,376,032

4,844,391

Paycheck Protection Program loan payable

236,498

124,400

Tenant security deposit

17,180

19,280

Operating lease liability – noncurrent portion

1,299,267

1,456,567

Convertible notes payable – noncurrent portion

2,500,000

2,500,000

Total Liabilities

8,428,977

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, 24,470,526 and 24,420,526 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively

24,470

24,420

Additional paid-in capital

41,001,757

40,751,807

Stock subscription receivable

(2,708,880

)

(3,160,360

)

Accumulated deficit

(28,742,458

)

(25,642,387

)

Accumulated other comprehensive income

965,581

564,860

Treasury stock

(9,100,000

)

(9,100,000

)

Total Stockholders’ Equity

1,440,470

3,438,340

Noncontrolling interest

(924,481

)

(776,273

)

Total Equity

515,989

2,662,067

Total Liabilities and Equity

$

8,944,966

$

11,606,705



ABVC BIOPHARMA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)

Three Months Ended
June 30,

Six Months Ended
June 30,

2021

2020

2021

2020

Revenues

$

31,441

$

226,513

$

294,591

$

305,299

Cost of revenues

646

4,236

1,891

8,195

Gross profit

30,795

222,277

292,700

297,104

Operating expenses

Selling, general and administrative expenses

1,231,692

1,277,133

2,399,287

2,430,022

Research and development expenses

358,878

139,082

480,193

231,872

Stock-based compensation

475,740

75

701,480

600

Total operating expenses

2,066,310

1,416,290

3,580,960

2,662,494

Loss from operations

(2,035,515

)

(1,194,013

)

(3,288,260

)

(2,365,390

)

Other income (expense)

Interest income

10,722

9,350

63,251

20,070

Interest expense

(82,671

)

(140,525

)

(212,900

)

(272,042

)

Rent income

53,331

5,249

58,198

10,480

Rent income – related parties

800

1,200

2,400

2,400

Impairment loss

-

(944,204

)

-

(944,204

)

Investment loss

-

(38,937

)

-

(38,937

)

Gain/Loss on foreign exchange changes

(5,758

)

8,656

(4,807

)

8,658

Gain/Loss on investment in equity securities

(53,591

)

(109,656

)

(101,382

)

(180,067

)

Other income

162

170,179

233

176,501

Government grant income

-

-

124,400

-

Total other expenses

(77,005

)

(1,038,688

)

(70,607

)

(1,217,141

)

Loss before provision income tax

(2,112,520

)

(2,232,701

)

(3,358,867

)

(3,582,531

)

Provision for income tax

(59,564

)

(48,644

)

(110,588

)

(89,212

)

Net loss

(2,052,956

)

(2,184,057

)

(3,248,279

)

(3,493,319

)

Net loss attributable to noncontrolling interests

(81,390

)

(334,760

)

(148,208

)

(396,484

)

Net loss attributed to ABVC and subsidiaries

(1,971,566

)

(1,849,297

)

(3,100,071

)

(3,096,835

)

Foreign currency translation adjustment

364,581

(10,568

)

400,721

(17,019

)

Comprehensive loss

$

(1,606,985

)

$

(1,859,865

)

$

(2,699,350

)

$

(3,113,854

)

Net loss per share:

Basic and diluted

$

(0.08

)

$

(0.09

)

$

(0.13

)

$

(0.16

)

Weighted average number of common shares outstanding:

Basic and diluted

24,421,082

19,488,168

24,420,804

19,486,355



ABVC BIOPHARMA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020
(UNAUDITED)

2021

2020

Cash flows from operating activities

Net loss

$

(3,248,279

)

$

(3,493,319

)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation

5,869

21,599

Stock based compensation for nonemployees

701,480

600

Gain/Loss on investment in equity securities

101,382

180,067

Government grant income

(124,400

)

-

Other non-cash income and expenses

-

(5,886

)

Investment loss

-

983,141

Deferred tax

(111,388

)

(92,062

)

Changes in operating assets and liabilities:

Decrease (increase) in accounts receivable

(137,312

)

(39,845

)

Decrease (increase) in prepaid expenses and deposits

(219,020

)

20,091

Decrease (increase) in due from related parties

(12,346

)

(438,174

)

Increase (decrease) in accounts payable

(17,997

)

(16,183

)

Increase (decrease) in notes payable

-

51,240

Increase (decrease) in accrued expenses and other current liabilities

201,591

736,046

Increase (decrease) in advance from others

(1,085

)

836

Increase (decrease) in due to related parties

4,427

44,778

Net cash used in operating activities

(2,857,078

)

(2,047,071

)

Cash flows from investing activities

Net proceeds from sale of investment

-

33,300

Prepayment for equity investment

(421,974

)

-

Net cash provided by (used in) investing activities

(421,974

)

33,300

Cash flows from financing activities

Issuance of common stock for private placement

-

1,697,051

Issuance of common stock for stock-based compensation

-

493,480

Proceeds from short-term loan

-

100,000

Proceeds from short-term borrowing from third parties

-

31,850

Proceeds from short-term borrowing from related parties

-

71,688

Repayment of convertible notes

(306,836

)

-

Proceeds from long-term loans

236,498

124,400

Repayment of long-term bank loans

(4,396

)

(263,362

)

Net cash provided by financing activities

(74,734

)

2,255,107

Effect of exchange rate changes on cash and cash equivalents and restricted cash

9,419

4,590

Net increase (decrease) in cash and cash equivalents and restricted cash

(3,344,367

)

245,926

Cash and cash equivalents and restricted cash

Beginning

5,001,371

160,443

Ending

$

1,657,004

$

406,369

Supplemental disclosure of cash flows

Cash paid during the year for:

Interest expense paid

$

69,623

$

59,812

Income taxes paid

$

-

$

-