ABVC BioPharma(ABVC) - 2019 Q3 - Quarterly Report

Financial Performance - Total revenues for the three months ended September 30, 2019, were $197,733, compared to $601,757 for the nine months ended September 30, 2019[9]. - Gross profit for the three months ended September 30, 2019, was $194,936, while total operating expenses were $1,310,558, resulting in a loss from operations of $(1,115,622)[9]. - The company reported a net loss of $(1,329,685) for the three months ended September 30, 2019, compared to a net loss of $(687,300) for the same period in 2018[9]. - For the nine months ended September 30, 2019, the net loss was $2,817,454, compared to a net loss of $2,136,962 for the same period in 2018, representing an increase of approximately 31.8%[11]. - The company reported a comprehensive loss of $(1,275,920) for the three months ended September 30, 2019, compared to $(582,849) for the same period in 2018[9]. - The net loss for the nine months ended September 30, 2019, was $2,817,454, an increase from a net loss of $2,136,962 for the same period in 2018[94]. - Basic loss per share for the nine months ended September 30, 2019, was $(0.16), compared to $(0.18) for the same period in 2018[203]. Assets and Liabilities - Total current assets increased to $1,707,567 as of September 30, 2019, from $566,476 as of December 31, 2018[8]. - Total liabilities decreased to $6,674,702 as of September 30, 2019, from $11,280,510 as of December 31, 2018[8]. - The company had total assets of $7,404,893 as of September 30, 2019, compared to $5,940,124 as of December 31, 2018[9]. - The total accumulated deficit as of September 30, 2018, was $(8,438,433), which increased to $(12,209,446) by December 31, 2018[12]. - The Company reported an accumulated deficit of $14,773,552 as of September 30, 2019, compared to $12,209,446 as of December 31, 2018[94]. - The Company had a working capital deficiency of $4,170,357 as of September 30, 2019, improved from $10,421,310 at December 31, 2018[94]. Cash Flow and Financing Activities - Net cash used in operating activities for the nine months ended September 30, 2019, was $1,638,709, an increase from $1,168,300 in the prior year, indicating a rise of about 39.9%[11]. - The company reported a net cash provided by financing activities of $2,483,244 for the nine months ended September 30, 2019, compared to $667,114 in the same period of 2018, reflecting a significant increase of approximately 272.5%[11]. - The ending cash, cash equivalents, and restricted cash equivalents as of September 30, 2019, totaled $1,051,800, up from $216,659 at the end of September 30, 2018[11]. - Cash and cash equivalents increased significantly to $1,035,678 as of September 30, 2019, compared to $226,688 as of December 31, 2018[8]. - The company issued common stock for acquisition amounting to $531,147 during the reporting period[11]. Research and Development - Research and development expenses for the three months ended September 30, 2019, were $269,239, up from $54,514 in the same period of 2018[9]. - The company has a business model focused on developing new drugs and innovative medical devices, integrating research from world-renowned institutions[19]. - The Company has entered into a co-development agreement with BioHopeKing Corporation to develop BLI-1401-2 for Triple Negative Breast Cancer, sharing development costs 50/50[98]. Stock and Equity - The weighted average number of common shares outstanding for the three months ended September 30, 2019, was 19,020,824, compared to 11,884,804 for the same period in 2018[9]. - The total number of common shares outstanding as of September 30, 2019, was 19,477,504, reflecting an increase from 11,884,804 shares as of September 30, 2018, due to stock issuances[13]. - The Company converted a total of $4,872,340 of debt into common stock at a conversion price of $7.00 per share, resulting in the issuance of 696,051 shares[200]. Debt and Interest Expenses - The total short-term bank loans amounted to $1,885,500 as of September 30, 2019, up from $899,250 in 2018, indicating a growth of 109%[138]. - Total interest expenses related to convertible notes payable for the three months ended September 30, 2019, were $18,755, compared to $3,567 for the same period in 2018, representing a significant increase of 426%[137]. - Interest expenses for the short-term bank loans were $1,351 for the three months ended September 30, 2019, slightly down from $1,402 in 2018[141]. - The Company received a loan of $500,000 from Cathay Bank with a revolving line of credit of $1,000,000, maturing on January 1, 2020[144]. - The Company entered into a new unsecured loan agreement for NT$3,000,000 (approximately $96,600) at a fixed interest rate of 12% per annum for working capital purposes[152]. Accounting and Revenue Recognition - The Company adopted ASC 606 for revenue recognition starting January 1, 2018, with no significant change in revenue reported during the periods presented[44]. - Revenue is recognized when customers obtain control of goods or services, reflecting the expected consideration[45]. - Merchandise sales revenue is recognized upon delivery to customers, recorded at the net sales price after accounting for discounts and returns[46]. - Collaborative revenues include nonrefundable upfront license fees, development milestones, and reimbursements for R&D costs, with no royalty revenues received to date[51]. - The Company assesses long-lived assets for impairment annually, adjusting carrying values based on future discounted cash flows if necessary[69]. Impairment and Goodwill - The Company anticipates future cash flows indicate that the recoverability of goodwill is not reasonably assured[75]. - The Company evaluates goodwill for impairment annually, with the last evaluation indicating impairment due to the current financial condition and uncertainty in generating future operating income[75].