ABVC BioPharma Reports Third Quarter 2023 Financial and Operational Results

FREMONT, CA - (NewMediaWire) - November 15, 2023 -  ABVC BioPharma, Inc. (NASDAQ: ABVC) ("Company"): Today, a biotechnology company specializing in botanically based solutions that deliver high efficacy and low toxicity to improve health outcomes announced its financial and operating results for the third quarter of 2023. These results, including the financial statements included herein, can be found in the Company's Quarterly Report on Form 10-Q that was filed earlier today with the Securities and Exchange Commission


Third Quarter 2023 Financial Results


All comparisons are made on a year-over-year basis.


Shareholders' Equity


On February 23, 2023, the Company entered into a securities purchase agreement with Lind Global Fund II, LP ("Lind"), according to which the Company issued Lind a secured, convertible note in the principal amount of $3,704,167 for a purchase price of $3,175,000, that is convertible into shares of the Company's common stock at an initial conversion price of $1.05 per share, subject to adjustment. The Company also issued Lind a common stock purchase warrant to purchase up to 5,291,667 shares of the Company's common stock at an initial exercise price of $1.05 per share, subject to adjustment. During the period ended September 30, 2023, the Company has been repaying Lind with securities for 614,912 shares, totaling $1,814,800. During July 2023, the warrant exercise price was reset to $3.5 under the issuance of common stock about securities purchase agreement on July 2023. As of September 30, 2023, the warrant has not yet been exercised.


On July 27, 2023, the Company entered a certain securities purchase agreement. Relating to the offer and sale of 300,000 shares of common stock, par value $0.001 per share, and 200,000 pre-funded warrants, at an exercise price of $0.001 per share, in a registered direct offering. According to the Purchase Agreement, the Company agreed to sell the Shares and Pre-funded Warrants at a per-share purchase price of $3.50 for gross proceeds of $1,750,000 before deducting any estimated offering expenses. On August 1, 2023, the pre-funded warrants were exercised.


On August 14, 2023, the Company entered a cooperation agreement with Zhonghui. The Company acquired 20% of the ownership of a property and the parcel of the land owned by Zhonghui in Leshan, Sichuan, China. During the third quarter of 2023, the Company issued to Zhonghui an aggregate of 370,000 shares of the Company's common stock at a per-share price of $20.


As mentioned earlier, the equity is before the reverse stock split in 2023.


As of September 30, 2023, the Company achieved a total of shareholders' equity of $9.10M and, therefore, believes it has regained compliance with NASDAQ's shareholders' equity requirement.


·      Revenues. We generated $15,884 and $42,269 in revenues for the three months ended September 30, 2023 and 2022, respectively. The revenue decrease was due to the completion of ongoing projects and awaiting new drug approval.


·      Operating Expenses. Operating Expenses decreased by $1,606,226, or 43%, to $2,141,143 for the three months ended September 30, 2023, from $3,747,369 for the three months ended September 30, 2022. Such a decrease in operating expenses was mainly attributable to decreased selling, general and administrative expenses, and research and development expenses, since research and development projects have been dormant. At the same time, the Company awaits results for further development while being offset by the increase in stock-based compensation.


·      Other Income (expense). Other expense was $1,214,206 for the three months ended September 30, 2023, compared to other expense of $56,461 for the three months ended September 30, 2022. The change was principally caused by the increase in interest expense and the loss on foreign exchange changes, while being offset by the increase in interest income for the three months ended September 30, 2023, and the decrease in other expenses for the three months ended September 30, 2022.


·      Net Loss. The net loss was $3,368,080 for the three months ended September 30, 2023, compared to $3,776,524 for the three months ended September 30, 2022, representing a decrease of $408,444, or 11%.


·      Cash and Cash Equivalents. The Company considers highly liquid investments with maturities of three months or less to be cash equivalents when purchased. As of September 30, 2023, and December 31, 2022, the Company's cash and cash equivalents amounted to $500,069 and $85,265, respectively.


Recent Operational Highlights




The MDD Phase II trials for ABV-1504 were completed successfully with good tolerance to the drug, and no serious adverse effects were reported. The product is ready for an End-of-Phase 2 meeting with the FDA to finalize the protocol for Phase III trials. At the same time, we commenced the ADHD Phase IIb trials at the University of California, San Francisco (UCSF) and another five sites in Taiwan. The trials are heading for the interim report, which we expect to complete by the end of 2023. ABV-1601 for MDD in cancer patients has completed Phase I study preparation, including the Site Initiation Visit (SIV).


On July 31, 2023, ABVC signed a legally binding term sheet with a Chinese pharmaceutical company, Xinnovation Therapeutics Co., Ltd, for the exclusive licensing of ABV-1504 for Major Depressive Disorder (MDD) and ABV-1505 for Attention-Deficit/Hyperactivity Disorder in mainland China. Under this agreement, Xinnovation will hold exclusive rights to develop, manufacture, market, and distribute our innovative drugs for MDD and ADHD in the Chinese market and shall bear the costs for clinical trials and product registration in China. We are negotiating definitive agreements with Xinnovation and are excited that the licensing deal carries a possible aggregate income of $20 million for ABVC if all expected sales are made.


In November 2023, each of ABVC and one of its subsidiaries, BioLite, Inc. ("BioLite"), entered into a multi-year, global licensing agreement with AIBL for the Company and BioLites's CNS drugs with the indications of MDD (Major Depressive Disorder) and ADHD (Attention Deficit Hyperactivity Disorder) (the "Licensed Products"). The potential license will cover the Licensed Products' clinical trial, registration, manufacturing, supply, and distribution rights. The Licensed Products for MDD and ADHD, owned by ABVC and BioLite, were valued at $667M by a third-party evaluation. The parties are determined to collaborate on the global development of the Licensed Products. The parties are also working to strengthen new drug development and business collaboration, including technology, interoperability, and standards development. As per each of the respective agreements, each of ABVC and BioLite shall receive 23 million shares of AIBL stock at $10 per share, and if certain milestones are met, $3,500,000 and royalties equaling 5% of net sales, up to $100 million.




Vitargus®, a vitreous substitute, is a groundbreaking, advanced-staged R&D product that we believe will be the first biodegradable hydrogel used in retinal detachment surgery. Vitargus® has completed the feasibility study in Australia and was approved by the Australian Therapeutic Goods Administration (TGA) to initiate the next trial phase in two participating sites. This is vital to obtaining final regulatory approval for Vitargus® in Australia.


The Science Park Administration in Taiwan approved ABVC's plan to set up a pilot Good Manufacturing Practice (GMP) facility to produce Vitargus® and to pursue the process development work for manufacturing optimization. We are undertaking this project, proposed by ABVC's Taiwan affiliate and co-development partner, BioFirst Corporation, to upgrade the Vitargus® manufacturing processes so it can ultimately handle the global market supply. ABVC and BioFirst Corporation expect to complete the facility's construction in Hsinchu Biomedical Science Park, Taiwan, in 2024.




The United States Food & Drug Administration (US FDA) approved the Investigational New Drug (IND) application for the proposed clinical investigation of BLEX 404, the primary active ingredient in ABV-1519, for advanced inoperable or metastatic EGFR-mutated non-small cell lung cancer. This treatment is being co-developed by BioKey, Inc. ("BioKey") and by the Rgene Corporation, Taiwan. The study is under review at the Taiwan FDA for approval. This is the fourth IND approved by the US FDA for BLEX 404. The previous three INDs are for the combination therapies of triple-negative breast cancer, myelodysplastic syndromes (MDS), and pancreatic cancer.




BioKey, a wholly-owned subsidiary of the Company based in Fremont, California, produces dietary supplements derived from the maitake mushroom in tablet and liquid forms. BioKey has entered the second year of the distribution agreement with Define Biotech Co. Ltd. BioKey is currently set to produce an additional $1 million worth of products for the global market. We continue to work on distribution for the US and Canadian markets with Shogun Maitake.


On the regulatory services front for our clients, we received two ANDA approvals from the US FDA. We have a three-year contract, worth up to $3 million, for clinical development services between BioKey and Rgene Corporation. With this base, we are actively developing BioKey as a contract research, development, and manufacturing organization (CRDMO) to become a one-stop solution for pharmaceutical services. We also established BioKey (Cayman), Inc. to attract strategic investors to aid BioKey in getting listed on the Taiwan Stock Exchange.


Strategic Investments


ABVC entered a cooperation agreement with Zhonghui United Technology (Zhonghui) Group Co., Ltd. and its affiliated enterprises to develop a large-scale health and wellness base in Chengdu, China. The anticipated partnership aims to establish an integrated platform to facilitate collaborations between researchers and industry leaders. ABVC issued 370,000 shares of common stock to Zhonghui at $20 per share in consideration for a 20% ownership of certain property owned by Zhonghui, estimated at $37 million by a third-party valuation company, and another piece of land Zhonghui currently owns in that same area. The parties are waiting for the Chinese government's final asset ownership certification over these properties. Still, based on the cooperation agreement, Zhonghui does maintain the right to replace these properties with suitable replacements acceptable to ABVC.


On July 27, 2023, we entered a definitive securities purchase agreement with a single institutional investor to purchase $1.75 million worth of our common stock and pre-funded warrants in a registered direct offering. Under the terms of the securities purchase agreement, the Company sold 300,000 shares of common stock and 200,000 pre-funded warrants. The purchase price per share of common stock is $3.50, and the purchase price for the pre-funded warrants is identical to the purchase price for a share of common stock, less the exercise price of $0.01 per share.


Nasdaq Compliance


The Company has regained compliance with Nasdaq Marketplace Rules relating to maintaining a minimum $1.00 bid price and believes it regained compliance with the $2.5 million minimum shareholders equity requirements, as explained above.


As per Nasdaq Marketplace Rules, the Company had to present evidence on closing bid price of at least $1.00 per share for ten consecutive trading days, which it completed on August 08, 2023.


"We are delighted with our remarkable accomplishments and meaningful progress in 2023, and look forward to upcoming reports to end 2023 on a positive note," said Uttam Patil, Ph.D., Chief Executive Officer of ABVC BioPharma. "I am pleased with ABV-1505 (ADHD) Phase II, part II study making substantial progress at five Taiwan study sites and UCSF and expecting to be completed in 2023, Phase I studies of ABV-1601 for treating depression in cancer patients being initiated at CSMC in the US, and the progress of End-of-Phase II meeting preparation for ABV-1504 (MDD) with Dr. Maurizio Fava and Dr. Thomas Laughren of Clinical Trials Network and Institute (CTNI). In addition, ABV-1701 Vitargus®, a hydrogel we developed to make retina reattachment surgery more comfortable and successful for patients, has shown advantages over existing devices available to surgeons in a Phase I clinical study completed in Australia in 2018, indicating a promising outcome from the Phase II trials. We remain excited about our ongoing research initiatives and look forward to expanding our product pipeline."


About ABVC BioPharma


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, the Company utilizes in-licensed technology from its network of world-renowned research institutions to conduct proof-of-concept trials through Phase II of clinical development. The Company's network of research institutions includes Stanford University, University of California at San Francisco, and Cedars-Sinai Medical Center. For Vitargus®, the Company intends to conduct global clinical trials through Phase III.


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. None of the outcomes expressed herein are guaranteed. 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.



Tom Masterson

Email: tmasterson@allelecomms.com

   September 30, December 31,
   2023  2022 
Current Assets     
Cash and cash equivalents$500,069  $85,265 
Restricted cash and cash equivalents 620,868   1,306,463 
Accounts receivable, net 1,530   98,325 
Accounts receivable - related parties, net 624,373   757,343 
Due from related party - Current 535,046   513,819 
Short-term Investment 68,521   75,797 
Prepaid expense and other current assets 143,127   150,235 
Total Current Assets 2,493,534   2,987,247 
Property and equipment, net 7,953,936   573,978 
Operating lease right-of-use assets 899,817   1,161,141 
Long-term investments 2,677,395   842,070 
Deferred tax assets 34,256   117,110 
Prepaid expenses - noncurrent 128,898   135,135 
Security deposits 44,259   58,838 
Prepayment for long-term investments 1,429,016   2,838,578 
Due from related parties - noncurrent 930,396   1,141,378 
Total Assets$16,591,507  $9,855,475 
Current Liabilities     
Short-term bank loans$852,500  $1,893,750 
Accrued expenses and other current liabilities 3,558,213   2,909,587 
Advance from customers 79,501   10,985 
Operating lease liability – current portion 392,666   369,314 
Due to related parties 480,196   359,992 
Total Current Liabilities 5,363,076   5,543,628 
Tenant security deposit 5,680   7,980 
Operating lease liability – noncurrent portion 507,151   791,827 
Convertible notes payable – third parties 1,654,004   - 
Total Liabilities 7,529,911   6,343,435 
Preferred stock, $0.001 par value, 20,000,000 authorized, nil shares issued and outstanding -   - 
Common stock, $0.001 par value, 10,000,000 authorized, 4,823,043 and 3,286,190 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively 4,823   3,286 
Additional paid-in capital 80,662,290   67,937,050 
Stock subscription receivable (677,220)  (1,354,440)
Accumulated deficit (62,309,161)  (54,904,439)
Accumulated other comprehensive income 519,123   517,128 
Treasury stock (9,100,000)  (9,100,000)
Total Stockholders’ equity 9,099,855   3,098,585 
Noncontrolling Interest (38,259)  137,554 
Total Equity 9,061,596   3,236,139 
Total Liabilities and Equity$16,591,507  $9,579,574 

   Three Months Ended September 30, Nine Months Ended September 30,
   2023  2022  2023  2022 
Revenue$15,884  $42,269  $150,265  $380,789 
Cost of revenue 29,614   10,741   162,831   21,004 
Gross profit (13,730)  31,528   (12,566)  359,785 
Operating expenses           
Selling, general and administrative expenses 1,182,093   3,216,146   3,841,633   6,000,055 
Research and development expenses 141,310   305,483   990,731   1,197,669 
Stock based compensation 817,740   225,740   1,409,969   5,143,483 
Total operating expenses 2,141,143   3,747,369   6,242,333   12,341,207 
Loss from operations (2,154,873)  (3,715,841)  (6,254,899)  (11,981,422)
Other income (expense)           
Interest income 40,246   48,165   147,998   127,354 
Interest expense (1,218,624)  (126,537)  (1,390,039)  (159,507)
Operating sublease income (3,000)  21,597   53,900   78,523 
Gain/Loss on foreign exchange changes (25,059)  (177)  (55,625)  17,865 
Other (expense) income (7,769)  491   (1,174)  (59,381)
Total other (expense) income (1,214,206)  (56,461)  (1,244,940)  4,854 
Loss before provision for income tax (3,369,079)  (3,772,302)  (7,499,839)  (11,976,568)
Provision for (benefit from) income tax (999)  4,222   80,696   (165,096)
Net loss (3,368,080)  (3,776,524)  (7,580,535)  (11,811,472)
Net loss attributable to noncontrolling interests (50,564)  (71,660)  (175,813)  (252,171)
Net loss attributed to ABVC and subsidiaries (3,317,516)  (3,704,864)  (7,404,722)  (11,559,301)
Foreign currency translation adjustment (15,082)  (190,019)  1,995   (426,579)
Comprehensive loss$(3,332,598) $(3,894,883) $(7,402,727) $(11,985,880)
Net loss per share:           
Basic and diluted$(0.82) $(1.14) $(2.08) $(3.71)
Weighted average number of common shares outstanding:         
Basic and diluted 4,055,345   3,257,912   3,555,474   3,119,795 

     Nine Months Ended September 30,
     2023  2022 
Cash flows from operating activities     
Net loss $(7,580,535) $(11,811,472)
Adjustments to reconcile net loss to net cash used in operating activities:     
Depreciation 20,949   17,364 
Stock based compensation for non employees 1,409,969   5,143,483 
Provision for doubtful accounts 38,500   521,955 
Other non-cash income and expenses 1,422,362   30,564 
Deferred tax (35,719)  (31,247)
Changes in operating assets and liabilities:     
Decrease (increase) in accounts receivable 191,265   (31,909)
Decrease (increase) in prepaid expenses and deposits 27,924   243,065 
Decrease (increase) in tenant security deposit (2,300)  - 
Decrease (increase) in due from related parties 189,755   (983,707)
Decrease in inventory -   5,486 
Increase (decrease) in accrued expenses and other current liabilities648,626   (99,306)
Increase (decrease) in contract liabilities 68,516   - 
Increase (decrease) in due to related parties (155,697)  58,402 
Net cash used in operating activities (3,756,385)  (6,937,322)
Cash flows from investing activities     
Purchase of equipment (21,201)  (119,603)
Increase in prepayment for long-term investments (493,158)  (1,518,793)
Net cash used in investing activities (514,359)  (1,638,396)
Cash flows from financing activities     
Issuance of common stock 1,050,000   3,917,425 
Proceeds from issuance of warrant 2,429,028   - 
Proceeds from convertible notes payable – third parties 1,352,512   - 
Proceeds from short-term loan -   350,000 
Repayment of short-term bank loans (1,000,000)  - 
Net cash provided by (used in) financing activities 3,831,540   4,267,425 
Effect of exchange rate changes on cash and cash equivalents and restricted cash 168,413   (286,775)
Net decrease in cash and cash equivalents and restricted cash (270,791)  (4,595,068)
Cash and cash equivalents and restricted cash     
Beginning  1,391,728   6,565,215 
Ending  $1,120,937  $1,970,147 
Supplemental disclosure of cash flows     
Cash paid during the year for:     
Interest expense paid$27,525  $161,741 
Income taxes paid$-  $1,600 
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