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Press release content from Globe Newswire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Globe Newswire
Press release content from Globe Newswire. The AP news staff was not involved in its creation.

ABVC Biopharma Reports Third Quarter 2021 Financial and Operational Results

November 15, 2021 GMT

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%.

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Third Quarter 2021 Highlights

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  • 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