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ABVC Biopharma Reports Third Quarter 2021 Financial and Operational Results

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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