ABVC BioPharma Reports Second Quarter 2022 Financial and Operational Results

FREMONT, CA, Aug. 15, 2022 (GLOBE NEWSWIRE) — via NewMediaWire – ABVC BioPharma, Inc. (Nasdaq: ABVC), a clinical stage biopharmaceutical company developing therapeutic solutions in oncology/hematology, CNS, and ophthalmology, today announced its financial and operating results for the second quarter of 2022. Second Quarter 2022 Financial Results All comparisons are made on a year-over-year basis. Revenues. The Company generated $312,860 and $31,441 in revenues for the three months ended June 30, 2022 and 2021, respectively. The increase in revenues was mainly due to the revenue generated from the clinical development service agreement signed between BioKey and Rgene. Operating Expenses increased by $285,043, or 14%, to $2,351,353 for the three months ended June 30, 2022 from $2,066,310 for the three months ended June 30, 2021. The increase was mainly attributable to the increase in selling, general and administrative expenses by $361,139 which relates to costs in conjunction with our recent stock issuance, and increase in research and development expenses of $173,904 to continue developing our product pipeline, while being offset by a decrease in stock-based compensation of $250,000. Other Income (Expense) was $17,076 for the three months ended June 30, 2022, compared to $(77,005) for the three months ended June 30, 2021. The change was principally caused by the increase in interest income and decrease in interest expense, as well as the loss on investment in equity securities which occurred in the six months ended June 30, 2021. Net Interest income (expense) was $24,257 for the three months ended June 30, 2022, compared to $(71,949) for the three months ended June 30, 2021. The increase of $96,206, or approximately 134%, was primarily due to the repayment of convertible notes payable during the year ended 2021. Net Loss. As a result of the above factors, our net loss was $1,947,333 for the three months ended June 30, 2022 compared to $2,052,956 for the three months ended June 30, 2021, representing a decrease of $105,623, or 5%. Recent Operational Highlights Vitargus® Phase II Study Australia: Vitargus® Phase II Clinical Study protocol documents are now under review by the Australian Bellberry Human Research Ethics Committee (“HREC”). Upon approval, a Clinical Trial Notification (“CTN”) will be issued, leading to a final review by the Australian Therapeutic Goods Administration (“TGA”). Upon TGA approval, the clinical trial will begin in Australia. Thailand: The Ethics Committee (“EC”) of Srinagarind Hospital, Khon Kaen University of Thailand approved the Vitargus® Phase II Clinical Study Protocol (ABV-1701-02). Ramathibodi Hospital, Mahidol University, expects to receive EC approval in the near future. Prior to initiating the two studies, the Food and Drug Administration of Thailand must issue an EC investigational product (IP) import license. Vitargus Manufacturing: Vitargus will be manufactured through a new aseptic process that enhances the stability, consistency and efficacy of the final product, while significantly reducing manufacturing time. This new manufacturing process eliminates the labor-intensive and time-consuming gamma ray sterilization of the Vitargus components by using a sterile fill-lyophilization-finish (FLF).  ADHD Phase II Part 2 Clinical Update A total of 22 subjects have been enrolled in the ADHD Phase II Part 2 Clinical study from a total of 32 subjects screened since results on the first subject was treated. One participant completed the 8-week treatment per the study design. “A Phase II Tolerability and Efficacy Study of PDC-1421 Treatment in Adult Patients with Attention-Deficit Hyperactivity Disorder (ADHD), Part II” is expected to eventually enroll approximately 100 patients. Five prestigious research hospitals in Taiwan and the research hospital at the University of California, San Francisco are participating in the study, which is a continuation of the Phase II Part I study of ABV-1505, accepted by the U.S. Food & Drug Administration in October 2020. Other Developments BioKey, ABVC’s wholly owned subsidiary based in Fremont, California, has entered into a Clinical Development Service Agreement with Rgene to guide three Rgene drug products, RGC-1501 for the treatment of Non-Small Cell Lung Cancer (NSCLC), RGC-1502 for the treatment of pancreatic cancer and RGC 1503 for the treatment of colorectal cancer patients, through completion of Phase II clinical studies under U.S. FDA IND regulatory requirements. The FreeMind Group, a fundraising consulting group specializing in life sciences, will help ABVC explore and identify funding opportunities from non-dilutive sources, such as the National Institutes of Health, US Department of Defense, National Science Foundation, Food and Drug Administration and Biomedical Advanced Research and Development Authority, as well as private foundations. FreeMind will help ABVC identify the most suitable grant opportunities and assist in preparing and submitting funding applications. Dr. Maurizio Fava, a world leader in the field of depression, Psychiatrist-in-Chief of Massachusetts General Hospital (MGH), executive director of the Clinical Trials Network and Institute, Associate Dean for clinical and translational research and the Slater Family Professor of Psychiatry at Harvard Medical School, along with Dr. Thomas Laughren, Director of Regulatory for the MGH Psychiatry Clinical Trials Network and Institute and retired Division Director for the Division of Psychiatry Products, Center for Drug Evaluation and Research at the U.S. Food & Drug Administration, have both agreed to provide consulting services in connection with clinical studies of its central nervous system medicines designed to alleviate symptoms of Major Depression Disorder (MDD) and Adult Depression Hyperactive Disorder (ADHD). The Company’s MDD medicine has successfully completed Phase II clinical studies which were accepted by the U.S. Food & Drug Administration in October 2020. Its ADHD medicine successfully completed Phase II, part 1 and is initiating part 2 at the University of California, San Francisco Medical Center as well as at five clinical study sites in Taiwan. 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 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;  (v) difficulties in securing regulatory approval to proceed to the next level of the clinical trials or to market our product candidates; and (vi) impact of COVID-19 pandemic on our business, results of operations, financial condition and cash flows. 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. ContactICR, LLCStephanie OshchepkovPhone: +1 203-682-7175Email: [email protected] ABVC BIOPHARMA, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS           June 30, December 31,   2022  2021     (Unaudited)   ASSETS      Current Assets      Cash and cash equivalents$2,910,613  $5,828,548  Restricted cash and cash equivalents 688,633   736,667  Accounts receivable, net 289,474   280,692  Accounts receivable – related parties, net 142,225   145,399  Due from related parties 3,713,319   1,286,618  Inventory, net 21,855   25,975  Short-term investments 82,755   108,147  Prepayment for long-term investments 639,072   684,720  Prepaid expense and other current assets 1,301,448   528,354   Total Current Assets 9,789,394   9,625,120         Property and equipment, net 597,318   525,881 Operating lease right-of-use assets 1,294,550   1,471,899 Goodwill, net –   – Long-term investments 870,571   932,755 Deferred tax assets 1,080,703   981,912 Prepaid expenses – noncurrent 110,099   119,309 Security deposits 39,977   41,157   Total Assets$13,782,612  $13,698,033         LIABILITIES AND EQUITY      Current Liabilities      Short-term bank loans$1,574,000  $1,640,000  Accounts payable 2,085   –  Accrued expenses and other current liabilities 1,246,898   1,300,803  Advance from customers 10,985   10,985  Operating lease liability – current portion 350,284   347,100  Due to related parties 461,612   393,424   Total Current Liabilities 3,645,864   3,692,312          Tenant security deposit 11,980   10,580  Operating lease liability – noncurrent portion 944,266   1,124,799   Total Liabilities 4,602,110   4,827,691         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, 32,307,329 and 28,926,322 shares issued and outstanding 32,307   28,926  Additional paid-in capital 66,240,474   58,113,667  Stock subscription receivable (1,805,920)  (2,257,400) Accumulated deficit (46,335,637)  (38,481,200) Accumulated other comprehensive income 303,100   539,660  Treasury stock (9,100,000)  (9,100,000)  Total Stockholders’ equity 9,334,324   8,843,653 Noncontrolling Interest (153,822)  26,689   Total Equity 9,180,502   8,870,342         Total Liabilities and Equity$13,782,612  $13,698,033          ABVC BIOPHARMA, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(UNAUDITED)                 Three Months Ended June 30, Six Months Ended June 30,   2022  2021  2022  2021 Revenue$312,860  $31,441  $338,520  $294,591               Cost of revenue 8,367   646   10,263   1,891               Gross profit 304,493   30,795   328,257   292,700               Operating expenses            Selling, general and administrative expenses 1,592,831   1,231,692   2,783,909   2,399,287  Research and development expenses 532,782   358,878   892,186   480,193  Stock based compensation 225,740   475,740   4,917,743   701,480   Total operating expenses 2,351,353   2,066,310   8,593,838   3,580,960               Loss from operations (2,046,860)  (2,035,515)  (8,265,581)  (3,288,260)              Other income (expense)            Interest income 39,015   10,722   79,190   63,251  Interest expense (14,758)  (82,671)  (32,971)  (212,900) Operating sublease income 32,802   53,331   56,926   58,198  Operating sublease income – related parties –   800   –   2,400  Gain/Loss on foreign exchange changes 10,479   (5,758)  18,042   (4,807) Gain/Loss on investment in equity securities –   (53,591)  –   (101,382) Other (expense) income (50,462)  162   (59,872)  233  Government grant income –   –   –   124,400   Total other income (expense) 17,076   (77,005)  61,315   (70,607)              Loss before provision for income tax (2,029,784)  (2,112,520)  (8,204,266)  (3,358,867)              Provision for income tax (82,451)  (59,564)  (169,318)  (110,588)              Net loss (1,947,333)  (2,052,956)  (8,034,948)  (3,248,279)              Net loss attributable to noncontrolling interests (88,336)  (81,390)  (180,511)  (148,208)             Net loss attributed to ABVC and subsidiaries (1,858,997)  (1,971,566)  (7,854,437)  (3,100,071)Foreign currency translation adjustment (123,221)  364,581   (236,560)  400,721 Comprehensive loss$(1,982,218) $(1,606,985) $(8,090,997) $(2,699,350)              Net loss per share:            Basic and diluted$(0.06) $(0.08) $(0.26) $(0.13)              Weighted average number of common shares outstanding:          Basic and diluted 31,307,329   24,421,082   29,683,402   24,420,804                ABVC BIOPHARMA, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021(UNAUDITED)               2022  2021 Cash flows from operating activities       Net loss $(8,034,948) $(3,248,279) Adjustments to reconcile net loss to net cash used in operating activities:       Depreciation  10,902   5,869   Stock based compensation  4,917,743   701,480   Gain/Loss on sale of investment in equity securities –   101,382   Government grant income  –   (124,400)  Other non-cash income and expenses  18,831   –   Deferred tax  (170,118)  (111,388)  Changes in operating assets and liabilities:        Decrease (increase) in accounts receivable (8,782)  (137,312)   Decrease (increase) in prepaid expenses and other current assets (784,714)  (219,020)   Decrease (increase) in due from related parties (2,435,935)  (12,346)   Decrease (increase) in inventory  2,473   –    Increase (decrease) in accounts payable 2,085   (17,997)   Increase (decrease) in accrued expenses and other current liabilities (21,915)  201,591    Increase (decrease) in advanced from others –   (1,085)   Increase (decrease) in due to related parties 80,760   4,427     Net cash used in operating activities (6,423,618)  (2,857,078)          Cash flows from investing activities       Purchase of equipment  (115,246)  –  Prepayment for equity investment  –   (421,974)    Net cash used in investing activities (115,246)  (421,974)          Cash flows from financing activities       Issuance of common stock  3,663,925   –  Repayment of convertible notes  –   (306,836) Proceeds from long-term loan  –   236,498  Repayment of long-term bank loans  –   (4,396)    Net cash provided by (used in) financing activities3,663,925   (74,734)           Effect of exchange rate changes on cash and cash equivalents and restricted cash (91,030)  9,419            Net decrease in cash and cash equivalents and restricted cash (2,965,969)  (3,344,367)          Cash and cash equivalents and restricted cash      Beginning  6,565,215   5,001,371  Ending $3,599,246  $1,657,004           Supplemental disclosure of cash flows       Cash paid during the year for:        Interest expense paid $24,348  $69,623   Income taxes paid $-  $-