ABVC Biopharma Announces Fiscal Year 2021 Financial and Operational Results

FREMONT, CA, March 31, 2022 (GLOBE NEWSWIRE) — via NewMediaWire — ABVC BioPharma, Inc. (Nasdaq: ABVC), a biotechnology company specializing in botanically based solutions that seeks to deliver high efficacy with low toxicity for improved health outcomes, today announced its financial and operating results for the fiscal year ended December 31, 2021. Full Year 2021 Financial ResultsAll comparisons are made on a year-over-year basis. Revenues. We generated $355,797 and $483,045 in revenues for the year ended December 31, 2021 and 2020, respectively. The decrease of $127,248, or approximately 26%, was primarily caused by the decrease in contract services due to the impact of the COVID-19 pandemic.Operating Expenses. Our operating expenses were $12,056,679 in the year ended December 31, 2021, as compared to $8,970,105 in the year ended December 31, 2020. Such increase in operating expenses was mainly attributable to the increase in stock-based compensation and selling, general and administrative expenses by $2,632,427 which relates to costs in conjunction with our public offering and our recent stock issuances, as well as increasing research and development expenses of $454,147 to continue to develop our pipeline.Other Income (Expense).Other income was $495,141 for the year ended December 31, 2021, as compared to other expense of $2,308,160 for the year ended December 31, 2020. The increase was principally caused by an increase in foreign currency exchange income, government PPP forgiveness and a decrease in impairment loss and loss on investment in equity securities. Loss on impairment was $0 for the year ended December 31, 2021, compared to $961,217 for the year ended December 31, 2020. Net Loss. Net loss was $12,035,851 for the year ended December 31, 2021, compared to $10,593,584 for the year ended December 31, 2020. The Company’s net loss increased by $1,442,267, or approximately 14%, during the year ended December 31, 2021, from the year ended December 31, 2020. Working Capital.Working capital as of December 31, 2021 was $5,932,808, compared to $1,328,575 as of December 31, 2020, for an increase of $4,604,233, primarily as a result of an increase in net cash from financing activities. The net cash provided by financing activities increased by $427,707 due to the issuance of common stock partially offset by offering costs, repayment of convertible notes and repayment of short-term loans during the year ended December 31, 2021. Cash and Cash Equivalents. The Company considers highly liquid investments with maturities of three months or less, when purchased, to be cash equivalents. As of December 31, 2021 and 2020, the Company’s cash and cash equivalents amounted to $5,828,548 and $4,273,208, respectively. Fourth Quarter 2021 Highlights Vitargus® received the 2021 “National Innovation and Renewal of Diligence” award from the Institute for Biotechnology and Medicine Industry (IBMI) of Taiwan.ABVC selected two additional clinical sites in Thailand to participate in the Phase II, Part 2 clinical study of Vitargus®.BioKey, a wholly-owned subsidiary of the Company, took advantage of existing technology to produce a dietary supplement derived from the maitake mushroom. Research has shown that consuming certain amounts of the maitake mushroom tends to lower the risk of heart disease and provide immune system support. In addition, BioKey entered into a three-year distribution agreement with Define Biotech Co. Ltd. The agreement grants Define Biotech the exclusive right to distribute this new dietary supplement in China and Taiwan in exchange for a commitment to purchase $3 million worth of the new product over the three-year period. “We are delighted with our remarkable accomplishments and meaningful progress in 2021,” said Dr. Howard Doong, M.D., Ph.D., Chief Executive Officer of ABVC BioPharma. “I am pleased that the CSR for the Phase II clinical study of our major depressive disorder (MDD) drug was received by the US FDA without comments. The study demonstrated material improvement in both efficacy and safety, compared to existing medications available. As such, we will seek a Phase III partner in 2022 to further prove the statistical significance of our MDD results. In addition, Vitargus, a gel we developed to make retina reattachment surgery more comfortable for the patient, has shown advantages over existing devices available to surgeons, prompting us to start a self-funded pivotal trial phase in 2022. We remain excited about our ongoing research initiatives and look forward to expanding our product pipeline in the future.” 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, 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 globe.  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, LLCLucy PengPhone: +1 646-677-1872Email: [email protected] ABVC BIOPHARMA, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS           December 31, December 31,   2021 2020ASSETS       Current Assets      Cash and cash equivalents$         5,828,548   $          4,273,208  Restricted cash and cash equivalents             736,667               728,163  Accounts receivable, net             280,692               159,712  Accounts receivable – related parties, net             145,399               143,435  Due from related parties          1,286,618               696,255  Inventory, net               25,975                       –    Short-term investments             108,147                       –    Prepayment for long-term investments             684,720                       –    Prepaid expense and other current assets             528,354               172,193   Total Current Assets                9,625,120            6,172,966         Property and equipment, net             525,881               514,834 Operating lease right-of-use assets          1,471,899            1,772,747 Goodwill, net                     –                         –   Long-term investments             932,755            1,190,727 Deferred tax assets             981,912            1,790,597 Prepaid expenses – noncurrent             119,309               119,315 Security deposits               41,157                 45,519   Total Assets $        13,698,033   $        11,606,705         LIABILITIES AND EQUITY       Current Liabilities      Accounts payable$                    –    $              23,044  Short-term bank loans          1,640,000            1,629,000  Short term loan                     –                 100,000  Notes payable                     –                 106,800  Accrued expenses and other current liabilities          1,300,803            2,118,854  Advance from customers               10,985                 12,070  Operating lease liability – current portion             347,100               316,178  Due to related parties             393,424               288,445  Convertible notes payable – related parties, current portion                     –                 250,000   Total Current Liabilities          3,692,312            4,844,391  Paycheck Protection Program Loan Payable                     –                 124,400  Tenant security deposit               10,580                 19,280  Operating lease liability – noncurrent portion          1,124,799            1,456,567  Convertible notes payable – noncurrent portion                     –              2,500,000   Total Liabilities          4,827,691            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, 28,926,322 and 24,420,526 shares issued and outstanding               28,926                 24,420  Additional paid-in capital        58,113,667          40,751,807  Stock subscription receivable         (2,257,400)          (3,160,360) Accumulated deficit       (38,481,200)        (25,642,387) Accumulated other comprehensive income             539,660               564,860  Treasury stock         (9,100,000)          (9,100,000)  Total Stockholders’ equity          8,843,653            3,438,340 Noncontrolling Interest               26,689             (776,273)  Total Equity          8,870,342            2,662,067         Total Liabilities and Equity $        13,698,033   $        11,606,705  ABVC BIOPHARMA, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS           Year Ended December 31,   2021 2020Revenue$            355,797   $             483,045         Cost of revenue                5,086                 18,716         Gross profit             350,711               464,329         Operating expenses      Selling, general and administrative expenses          5,746,119            4,273,468  Research and development expenses          1,003,805               549,658  Stock based compensation          5,306,755            4,146,979   Total operating expenses        12,056,679            8,970,105         Loss from operations       (11,705,968)          (8,505,776)        Other income (expense)      Interest income               43,196                 71,045  Interest expense           (227,210)            (405,032) Operating sublease income              134,576                 20,071  Operating sublease income – related parties                4,800                  4,800  Impairment loss                     –               (961,217) Investment loss                     –                 (40,589) Gain/Loss on foreign exchange  changes             426,316                 (3,275) Gain/Loss on investment in equity securities           (269,844)          (1,168,733) Other income (expense)               22,409               174,770  Government grant income             360,898                       –     Total other income (expenses)             495,141           (2,308,160)        Loss before provision for income tax       (11,210,827)        (10,813,936)        Provision for income tax expense (benefit)              825,024             (220,352)        Net loss       (12,035,851)        (10,593,584)        Net loss attributable to noncontrolling interests             802,962             (802,420)       Net loss attributed to ABVC and subsidiaries       (12,838,813)          (9,791,164)Foreign currency translation adjustment             (25,200)              (98,893)Comprehensive loss$      (12,864,013) $        (9,890,057)        Net loss per share:      Basic and diluted$                (0.51) $                (0.50)        Weighted average number of common shares outstanding:      Basic and diluted        25,053,522          19,715,559          ABVC BIOPHARMA, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE YEAR ENDED DECEMBER 31, 2021 AND 2020               2021 2020Cash flows from operating activities      Net loss  $      (12,035,851)  $       (10,593,584) Adjustments to reconcile net loss to net cash used in operating activities:       Depreciation               11,993                 37,142   Stock based compensation          5,306,755            4,146,979   Gain/Loss on investment in equity securities             269,844            1,168,733   Government grant income           (360,898)                      –     Other non-cash income and expenses                     –                 (15,360)  Investment loss                     –              1,001,806   Deferred tax             824,199             (223,201)  Changes in operating assets and liabilities:        Decrease (increase) in accounts receivable           (120,980)                 3,696    Decrease (increase) in prepaid expenses and other current assets           (357,276)              (15,778)   Decrease (increase) in due from related parties           (595,037)                20,645    Decrease (increase) in inventory             (25,830)                      –      Increase (decrease) in accounts payable             (23,044)                   (951)   Increase (decrease) in accrued expenses and other current liabilities           (173,151)            (359,822)   Increase (decrease) in advanced from others               (1,085)                (1,015)   Increase (decrease) in due to related parties           (317,358)              266,791     Net cash used in operating activities         (7,597,719)          (4,563,919)          Cash flows from investing activities      Net proceeds from sale of investment                      –                 147,804  Purchase of investments           (107,547)                      –    Purchase of equipment             (17,503)                      –    Loan to related parties                     –               (373,235) Prepayment for equity investment           (680,916)       Net cash used in investing activities           (805,966)            (225,431)          Cash flows from financing activities      Issuance of common stock         11,119,452            7,615,331  Payment for offering costs           (850,429)                      –    Proceeds from convertible notes                     –              2,500,000  Repayment of convertible notes           (306,836)                      –    Repayment of short-term loan           (100,000)                      –    Repayment of notes payable           (107,400)                      –    Repayment of short-term bank loan                     –               (350,000) Proceeds from short-term loan                     –                 100,000  Proceeds from long-term loan             236,498               124,400  Proceeds from (repayments of) short term borrowings from third parties               4,265             (480,989) Proceeds from borrowings from related parties                     –                   72,704  Repayment of long-term bank loans                     –                 (13,603)    Net cash provided by financing activities          9,995,550            9,567,843            Effect of exchange rate changes on cash and cash equivalents and restricted cash             (28,021)                62,435            Net increase in cash and cash equivalents and restricted cash          1,563,844            4,840,928           Cash and cash equivalents and restricted cash      Beginning          5,001,371               160,443  Ending $         6,565,215  $         5,001,371           Supplemental disclosure of cash flows      Cash paid during the year for:       Interest expense paid$            333,873  $            208,556   Income taxes paid$                    –    $                    –   Non-cash financing and investing activities       Common shares issued for debt conversion$         2,693,548  $         1,717,051