ABVC Biopharma Reports Third Quarter 2021 Financial and Operational Results

FREMONT, CA, Nov. 15, 2021 (GLOBE NEWSWIRE) -- via NewMediaWire -- ABVC BioPharma, Inc. (Nasdaq: ABVC), a biotechnology company specializing in botanically based solutions that deliver high efficacy with low toxicity for improved health outcomes, today announced its financial and operating results for the third quarter of 2021.

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