ABVC BioPharma(ABVC) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial information of ABVC BioPharma, Inc. and its subsidiaries Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements for ABVC BioPharma, Inc. and its subsidiaries, including the Balance Sheets, Statements of Operations and Comprehensive Loss, Statements of Cash Flows, and Statements of Stockholders' Equity (Deficit) for the periods ended June 30, 2025, and December 31, 2024 (for balance sheet) or June 30, 2024 (for income statement and cash flow, restated) Unaudited Condensed Consolidated Balance Sheets This section presents the unaudited condensed consolidated balance sheets for ABVC BioPharma, Inc. as of June 30, 2025, and December 31, 2024 | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :---------------- | | Total Current Assets | $2,770,401 | $2,179,815 | | Total Assets | $16,241,060 | $7,539,907 | | Total Current Liabilities | $6,532,514 | $6,557,461 | | Total Liabilities | $6,751,327 | $6,815,948 | | Total Stockholders' Equity | $7,013,635 | $1,226,140 | | Total Equity | $9,489,733 | $723,959 | Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss This section details the unaudited condensed consolidated statements of operations and comprehensive loss for the specified periods | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 (Restated) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 (Restated) | | :----------------------------------- | :------------------------------- | :------------------------------------------ | :----------------------------- | :---------------------------------------- | | Revenues | $0 | $117,142 | $0 | $118,347 | | Gross loss | $0 | $116,952 | $0 | $117,880 | | Total operating expenses | $2,294,983 | $977,059 | $2,987,988 | $3,816,242 | | Loss from operations | $(2,294,983) | $(860,107) | $(2,987,988) | $(3,698,362) | | Net loss | $(2,332,833) | $(1,047,412) | $(3,277,023) | $(3,975,079) | | Net loss attributed to ABVC and subsidiaries | $(2,257,022) | $(942,336) | $(3,099,097) | $(3,776,535) | | Basic and diluted Net loss per share | $(0.13) | $(0.08) | $(0.19) | $(0.36) | Unaudited Condensed Consolidated Statements of Cash Flows This section outlines the unaudited condensed consolidated statements of cash flows for the specified periods | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 (Restated) | | :----------------------------------- | :----------------------------- | :---------------------------------------- | | Net cash used in operating activities | $(1,434,007) | $(1,167,241) | | Net cash used in investing activities | $(665,779) | $(501,614) | | Net cash provided by financing activities | $2,356,083 | $1,726,303 | | Net decrease in cash and cash equivalents and restricted cash | $212,511 | $25,989 | | Cash and cash equivalents and restricted cash, Ending | $1,076,326 | $742,769 | Unaudited Condensed Consolidated Statements of Stockholders' Equity (Deficit) This section presents the unaudited condensed consolidated statements of stockholders' equity (deficit) for the specified periods | Metric | Balance at December 31, 2024 | Balance at June 30, 2025 | | :----------------------------------- | :--------------------------- | :----------------------- | | Common Stock (shares) | 13,868,484 | 19,533,416 | | Common Stock (amounts) | $13,868 | $19,533 | | Additional Paid-in Capital | $78,595,065 | $86,378,577 | | Accumulated Deficit | $(68,949,807) | $(72,048,904) | | Total Stockholders' Equity | $1,226,140 | $7,013,635 | | Noncontrolling Interest | $(502,181) | $2,476,098 | | Total Equity | $723,959 | $9,489,733 | Notes to Unaudited Condensed Consolidated Financial Statements This section provides detailed notes supporting the unaudited condensed consolidated financial statements 1. Organization and Description of Business This section describes ABVC BioPharma, Inc.'s corporate structure and its focus on plant-derived biopharmaceutical development - ABVC BioPharma, Inc. (formerly American BriVision (Holding) Corporation) is a Nevada corporation focused on biotechnology, specifically developing new drugs and medical devices from plants[22] - The Company's pipeline development involves licensing drugs/medical devices from Asia-Pacific research institutions after pre-clinical and Phase I safety studies, then conducting Phase II clinical trials in the U.S., Australia, and Taiwan[22] - Key subsidiaries include BriVision, BioLite Holding Inc., BioKey Inc., BioKey (Cayman), Inc., and majority-owned AiBtl BioPharma Inc. The Company gained a controlling interest (58.85%) in AiBtl through licensing agreements for CNS drugs (MDD and ADHD)[23][27] 2. Liquidity, Going Concern, and Restatement This section addresses the Company's financial viability, going concern status, and the restatement of prior financial statements - The Company reported a net loss of $3,277,023 and a working capital deficit of $2,762,113 for the six months ended June 30, 2025, indicating substantial doubt about its ability to continue as a going concern[28] - Management plans to improve operations for positive cash flow, raise additional capital through offerings, and seek financial support from related parties or shareholders to address liquidity concerns[29][34] - Financial statements for December 31, 2023, and June 30, 2024, were restated to correct misstatements in share-based payments, interest expense recognition for convertible debts, and misidentification of non-controlling interest in a subsidiary[30][32][33][35][36] Impact of Restatement on Six Months Ended June 30, 2024 (Selected Items) | Metric | As Reported | Adjustments | As Restated | | :----------------------------------- | :---------- | :---------- | :---------- | | Selling, general and administrative expenses | $1,471,708 | $(79,439) | $1,392,269 | | Stock based compensation | $2,957,736 | $(643,230) | $2,314,506 | | Interest expenses | $(944,715) | $555,960 | $(388,755) | | Net loss | $(5,253,708)| $1,278,629 | $(3,975,079)| 3. Summary of Significant Accounting Policies This section outlines the key accounting principles and policies applied in preparing the Company's financial statements - The financial statements are prepared in accordance with U.S. GAAP, with certain information condensed or omitted consistent with Article 8 of Regulation S-X[42] - Revenue recognition follows ASC 606, with collaborative revenues, milestone payments, and CDMO services being key sources. Revenue is recognized when control of goods/services is transferred, with significant judgment applied to distinct performance obligations and standalone selling prices[56][59][70] - Stock-based compensation for employees and non-employees is measured using a fair value method and recognized over the requisite service period. Total stock-based compensation for the six months ended June 30, 2025, was $1,620,386 (down from $2,314,506 in 2024)[75][76] - The Company currently has one reportable segment, and assets are reviewed on a consolidated basis[79] 4. Collaborative Agreements This section details the Company's partnerships for co-development and commercialization of drug products and medical devices - Collaborative agreements with BioHopeKing Corporation (BHK) involve co-development of BLI-1401-2 (Triple Negative Breast Cancer), BLI-1005 (Major Depressive Disorder), and BLI-1006 (Inflammatory Bowel Disease) in Asia (excluding Japan)[83][85] - BioLite Taiwan is entitled to receive 12% royalty on BHK's net sales for BLI-1401-2 Products and 50% of future net licensing income/sales profit for BLI-1005/BLI-1006. No royalties have been earned as of June 30, 2025[85][86] - A co-development agreement with Rgene Corporation covers ABV-1511 (Pancreatic Cancer) and ABV-1526 (Colorectal Cancer). The Company owns 26.65% of Rgene and provides clinical development services for RGC-1501, RGC-1502, and RGC-1503[88][90][91][92] - Collaborative agreements with BioFirst Corporation include global licensing rights for BFC-1401 Vitreous Substitute for Vitrectomy, ABV-2001 Intraocular Irrigation Solution, and ABV-2002 Corneal Storage Solution. Further development of ABV-2002 is on hold due to funding[97][102][104] - Licensing agreements with ForSeeCon Eye Corporation (FEYE) for Ophthalmology pipeline products (including Vitargus) involve a total licensing fee of $33.5 million (upfront payment in FEYE stock and cash milestone). The Company received 5 million FEYE shares but did not recognize revenue due to uncertain fair value[108] - Agreements with OncoX BioPharma, Inc. grant exclusive rights to develop and commercialize botanical drug extracts from Maitake Mushroom for Non-Small Cell Lung Cancer, Pancreatic Cancer, Triple Negative Breast Cancer, and Myelodysplastic Syndrome. Consideration includes OncoX shares (fair value uncertain) and cash milestone payments, plus 5% royalties on net sales[110][111][112][113] 5. Property and Equipment, and Prepayment for Asset Acquisition This section describes the Company's fixed assets and prepayments made for future asset acquisitions Property and Equipment, Net | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Land | $8,048,975 | $338,966 | | Buildings and leasehold improvements | $2,232,641 | $2,219,244 | | Machinery and equipment | $1,143,449 | $1,131,169 | | Office equipment | $182,022 | $163,448 | | Total Property and equipment, net | $8,215,366| $511,088 | - Prepayment for asset acquisition of $691,900 relates to a 20% ownership stake in a property and land in Chengdu, China, intended for a healthcare center. The value was adjusted from $7.4 million to $691,900 due to accounting guidance correction (ASC 718 instead of ASC 845)[117][118][119] - In March 2024, AiBtl issued common stock to acquire farmland in Taiwan for health-related businesses, recognizing $7,670,000 on its balance sheet. The title transfer is pending government review, with a nominee holding agreement in place due to foreign ownership restrictions[121] 6. Long-Term Investments This section provides an overview of the Company's strategic long-term equity investments in other biotechnology firms Long-Term Investments Summary | Investee Name | Ownership Percentage (June 30, 2025) | Accounting Treatment | | :--------------------------------- | :----------------------------------- | :------------------- | | Braingenesis Biotechnology Co., Ltd. | 0.17% | Cost Method | | Genepharm Biotech Corporation | 0.67% | Cost Method | | BioHopeKing Corporation | 5.90% | Cost Method | | ForSeeCon Eye Corporation | 19.78% | Cost Method | | BioFirst Corporation | 18.68% | Equity Method | | OncoX BioPharma, Inc. | 24.97% | Equity Method | | Rgene Corporation | 37.00% | Equity Method | | BioLite Japan K.K. | 49.00% | Equity Method | Long-Term Investments, Net | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :---------------- | | Non-marketable Cost Method Investments, net | $884,390 | $790,250 | | Equity Method Investments, net | $1,953,532 | $1,468,504 | | Total Long-term investments | $2,837,922| $2,258,754 | - The Company's ownership in Rgene Corporation increased to 37% after a convertible loan was approved for conversion in May 2024 (informed April 2025), impacting the equity method accounting[125] Loss on Investment in Equity Securities | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Share of equity method investee losses | $(44,917) | $(79,057) | $(95,794) | $(79,057) | 7. Convertible Notes Payable This section details the Company's outstanding convertible debt instruments and their conversion activities - The Company has three secured, convertible notes with Lind Global Fund II, LP (Lind Notes 1, 2, and 3), which are convertible into common stock and have specific repayment terms, including cash or shares[129][133][135] - As of June 30, 2025, the 1st and 2nd Lind Notes were fully converted/repaid. The 3rd Lind Note had an outstanding principal of $200,000, which was fully converted in July 2025[133][136][191] - Total interest expenses related to the Lind Notes were $117,290 for the three months ended June 30, 2025 (down from $186,443 in 2024) and $326,662 for the six months ended June 30, 2025 (down from $359,537 in 2024)[139] Convertible Notes Payable, Net | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :---------------- | | Principal Amount at Balance Sheet Date | $269,010 | $1,460,000 | | Unamortized Discount | $14,815 | $509,954 | | Carrying Value | $254,195 | $950,046 | | Fair Value | $309,010 | $1,740,000 | 8. Accrued Expenses and Other Current Liabilities This section itemizes the Company's short-term financial obligations and accrued operational costs Accrued Expenses and Other Current Liabilities | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :---------------- | | Accrued research and development expense | $1,799,583 | $1,799,583 | | Accrued directors and officers (owners) compensation | $996,675 | $1,025,867 | | Cash portion of the Lind Note repayments | $769,660 | $127,759 | | Accrued compensation and employee benefits | $160,914 | $126,106 | | Others | $564,132 | $557,866 | | Total | $4,290,964| $3,509,422 | 9. Short-Term Loans This section outlines the Company's current borrowings from banks and other individual lenders Short-Term Loans | Lender | June 30, 2025 | December 31, 2024 | | :----------------- | :------------ | :---------------- | | Cathay United Bank | $159,951 | $200,252 | | CTBC Bank | $682,000 | $610,000 | | Other individual | $30,000 | $30,000 | | Total | $871,951 | $840,252 | - Cathay United Bank loan bears a floating interest rate (2.99% as of June 30, 2025) and is collateralized by BioLite Taiwan's building and improvements, with a personal guarantee from the Company's chairman[147] - CTBC Bank loans bear a fixed interest rate of 2.5% per annum, secured by a savings account deposit and personally guaranteed by the Company's chairman and BioFirst[149] 10. Related Parties Transactions This section discloses financial and operational dealings with entities and individuals connected to the Company - No cash receipts from related parties on licensing agreements or other services were recognized as revenue for the six months ended June 30, 2025, compared to $116,000 in revenue from FEYE in 2024[154][155] - Consulting fees to Lion Arts (controlled by the Jiangs) were $126,019 for the six months ended June 30, 2025, an increase from $75,862 in 2024[158] Due from Related Parties - Current | Related Party | June 30, 2025 | December 31, 2024 | | :-------------- | :------------ | :---------------- | | Rgene | $2,115 | $565,711 | | BioFirst | $1,420,290 | $589,340 | | Total | $1,422,405| $1,155,051 | Due to Related Parties | Related Party | June 30, 2025 | December 31, 2024 | | :-------------- | :------------ | :---------------- | | AiBtl Holding | $348,219 | $348,219 | | The Jiangs | $83,011 | $274,170 | | Shareholders | $158,906 | $142,130 | | Lion Art Promotions Inc | $125,488 | $0 | | Directors | $12,952 | $8,526 | | Total | $728,576 | $773,045 | 11. Income Taxes This section reports the Company's income tax expenses, benefits, and deferred tax asset positions Income Tax (Benefit) Expense | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income tax (benefit) expense | $23,627 | $(110,894) | $23,627 | $(110,894) | Deferred Tax Assets (Liability) | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :---------------- | | Deferred tax assets, gross | $6,761,724 | $6,390,636 | | Valuation allowance | $(6,761,724) | $(6,390,636) | | Deferred tax assets, net | $0 | $0 | 12. Equity This section details changes in the Company's capital structure, including common stock issuances and warrant activities - The Company issued 2,566,557 unregistered shares in private offerings during the six months ended June 30, 2025, raising $1,868,750[177] - Common stock was issued for various purposes, including consulting services ($454,370 for 518,471 shares) and rent payments ($181,956 for 260,460 shares) during the six months ended June 30, 2025[175][178] - Lind converted $800,000 principal balance of the 3rd Lind Note into 800,000 shares of common stock during the six months ended June 30, 2025, with the remaining $200,000 converted in July 2025[190][191] Warrants Issued and Outstanding (Lind Convertible Notes) | Metric | Outstanding as of January 1, 2025 | Exercised | Outstanding as of June 30, 2025 | | :--------------------------------- | :-------------------------------- | :-------- | :------------------------------ | | Number of Underlying Shares | 2,029,167 | (1,029,167)| 1,000,000 | | Weighted Average Exercise Price Per Share | $0.0* | $0.40 | $0.40 | 13. Stock Options This section provides information on the Company's outstanding stock options and their exercise status - No stock options were granted during the six months ended June 30, 2025, or 2024[194] - As of June 30, 2025, there were 258,710 stock options outstanding and exercisable, with a weighted-average exercise price of $27.9 per share and a remaining contractual life of 6.25 years[195] 14. Loss Per Share This section presents the basic and diluted loss per share calculations for the Company Loss Per Share | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss attributable to ABVC's common stockholders | $(2,257,022) | $(942,336) | $(3,099,097) | $(3,776,535) | | Weighted-average shares outstanding – Basic & Diluted | 17,386,536 | 11,321,277 | 16,184,064 | 10,593,704 | | Loss per share – Basic & Diluted | $(0.13) | $(0.08) | $(0.19) | $(0.36) | - The Company's net loss for both periods resulted in an anti-dilutive effect from potential common shares[197] 15. Lease This section describes the Company's lease arrangements and the accounting treatment under ASC 842 - The Company adopted ASC 842, recognizing operating lease ROU assets and liabilities. ROU assets represent the right to use underlying assets, and lease liabilities represent payment obligations[199] Operating Lease Assets and Liabilities | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :---------------- | | Operating lease right-of-use assets | $459,325 | $640,387 | | Operating lease liabilities (current) | $282,192 | $403,581 | | Operating lease liabilities (non-current) | $177,133 | $236,807 | Operating Lease Expenses and Terms | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Operating lease expenses | $236,496 | $199,187 | | Weighted Average Remaining Lease Term | 2.37 years | 2.48 years | | Weighted Average Discount Rate | 1.32% | 1.19% | 16. Commitments and Contingencies This section addresses potential future obligations and uncertain events that could impact the Company's finances - As of June 30, 2025, and up to the date of financial statement issuance, management is not aware of any pending or threatened legal proceedings that would materially adversely affect the Company's business, financial condition, or results of operations[205] 17. Subsequent Events This section reports significant events that occurred after the reporting period but before the financial statements were issued - On July 15, 2025, the Company finalized the purchase of land in Taoyuan City, Taiwan, from Shuling Jiang (a director) for an estimated fair value of $3,857,975, paid with 2,035,136 restricted shares and five-year warrants to purchase 1,000,000 shares[206] - A one-year consulting agreement was entered with Shuling Jiang on July 15, 2025, for land-related advisory services, compensated with 1,000,000 restricted shares vesting over five years[207] - On July 1, 2025, Lind exercised 500,000 warrants, and on July 9, 2025, converted the remaining $200,000 outstanding 3rd Lind Note into common stocks, fully repaying all Lind Notes[208] - In July and August 2025, the Company received $100,000 and $350,000 cash payments on licensing agreements from ForSeeCon and OncoX, respectively[209] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the Company's financial condition and results of operations, highlighting its business overview, R&D pipeline, recent corporate developments, financial performance for the three and six months ended June 30, 2025, and its liquidity and capital resources. It also addresses the impact of COVID-19 and the restatement of prior financial statements Overview This section provides an overview of the Company's business, R&D pipeline, and recent corporate developments - ABVC BioPharma Inc. is a clinical-stage biopharmaceutical company focused on plant-derived new drugs and medical devices, operating through subsidiaries like BriVision, BioLite Holding, BioKey, and AiBtl BioPharma Inc[216] - The Company's R&D pipeline includes ABV-1504 (MDD, Phase II completed), ABV-1505 (ADHD, Phase II Part 1 completed, Part 2 in progress), ABV-1601 (Major Depression in Cancer Patients, Phase I/II expected end of 2025), and ABV-1701 (Vitargus® for vitrectomy surgery, Phase II initiated but on hold due to SAEs)[222][225] - BioKey, a wholly-owned subsidiary, provides Contract Development & Manufacturing Organization (CDMO) services, including API characterization, formulation development, and regulatory submissions[224] - The Company received a Nasdaq notification on April 24, 2025, for non-compliance with the minimum stockholders' equity requirement ($723,959 as of April 23, 2025), but regained compliance by May 5, 2025, with stockholders' equity of $7,956,295[242][249] Recent Research Results This section highlights recent research and development outcomes for the Company's drug and medical device pipeline - The Phase II clinical study of Vitargus® (ABV-1701) for vitrectomy surgery commenced in Q2 2023 but is currently on hold due to Serious Adverse Events (SAEs) observed in Thailand sites, prompting investigation and product improvement efforts[260] - Development of ABV-2002 Corneal Storage Solution is temporarily suspended due to funding constraints, despite preliminary internal testing indicating potential advantages[261] - For ABV-1505 (ADHD), 69 subjects have been enrolled in the Phase II Part II clinical study, with 50 completing treatment. The Clinical Study Report (CSR) was submitted to the U.S. FDA on March 27, 2025[263] Public Offering & Financings This section details the Company's recent public offerings, private placements, and financing activities - During Q1 2025, the Company extinguished the remaining principal balance of the 2nd Lind Note through equity issuances and reduced the 3rd Lind Note outstanding balance to $600,000 via equity conversions[264] - In the six months ended June 30, 2025, the Company raised $1,868,750 through several private offerings of 2,566,557 unregistered common shares[267] - In 2024, Lind exercised 1,000,000 Pre-Existing Warrants at a reduced price of $0.75 per share and received new warrants for 1,000,000 shares at $1.00 per share[273] - The Company repaid $800,000 principal of the 2nd Lind Note in 2024 through common stock issuances, with additional cash repayments due to conversion price floor requirements[270][271][272] Strategy This section outlines the Company's business strategy, focusing on R&D, clinical trials, and revenue generation - The Company's business strategy focuses on augmenting R&D capabilities by conducting Phase I and II clinical trials for new drugs and medical devices in CNS, Hematology/Oncology, and Ophthalmology[304] - Key business objectives include advancing ABV-1701 Vitargus to pivotal trial phase, licensing ABV-1504 for MDD, completing Phase II Part 2 for ABV-1505 (ADHD), and out-licensing post-Phase II candidates to major pharmaceutical companies[306] - Revenue generation relies on collaborative activities, including non-refundable upfront license fees, development and commercial milestones, R&D cost reimbursements, and royalties on net sales[307] - BioKey subsidiary generates revenue through Contract Development & Manufacturing Organization (CDMO) services and regulatory services, supporting both ABVC's internal development and external customers[329][330] Impact of COVID-19 Outbreak This section discusses the impact of the COVID-19 pandemic on the Company's operations and financial estimates - The COVID-19 pandemic has adversely affected the CDMO business sector, constraining researcher access to labs and reducing demand below historic levels. The Company anticipates a return to pre-COVID-19 demand with vaccination programs and policy changes[332] - Estimates in financial statements may be materially and adversely impacted in the near term due to COVID-19 conditions, including potential losses on inventory and impairment losses[333] Restatement of Consolidated Financial Statements This section explains the restatement of prior consolidated financial statements and the reasons for the adjustments - The Company restated its financial statements for the year ended December 31, 2023, to correct misstatements related to share-based payments, interest expense recognition on convertible debts, and misidentification of non-controlling interest[334] - Adjustments included reducing asset value by $6,708,100 and stock-compensation expense by $536,648 due to incorrect application of accounting guidance (ASC 845 instead of ASC 718) for an asset acquisition[336] - Interest expenses were overstated by $1,179,667 for 2023 due to misapplication of ASC 470-20 instead of ASC 815-40 for a convertible note[337] - The Company's controlling interest in AiBtl was adjusted from 100% to 69.70% as of December 31, 2023, due to outstanding founder shares not timely deposited[338] Results of Operations - Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024. This section analyzes the Company's financial performance for the three months ended June 30, 2025, compared to the same period in 2024 Financial Performance (Three Months Ended June 30) | Metric | 2025 | 2024 (Restated) | Increase (Decrease) | % Change | | :----------------------- | :--- | :-------------- | :------------------ | :------- | | Revenue | $0 | $117,142 | $(117,142) | -100% | | Operating Expenses | $2,294,983 | $977,059 | $1,317,924 | 135% | | Loss from Operations | $(2,294,983) | $(860,107) | $(1,434,876) | 167% | | Net Income (Loss) | $(2,332,833) | $(1,047,412) | $(1,285,421) | 123% | - Revenue decreased by 100% to $0 in Q2 2025, primarily due to no milestone revenue recognized from licensing agreements, compared to $117,142 in Q2 2024[346] - Operating expenses increased by 135% to $2,294,983, mainly due to hiring consultants and advisors for business opportunities and financial advisory services[347] Results of Operations - Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024. This section analyzes the Company's financial performance for the six months ended June 30, 2025, compared to the same period in 2024 Financial Performance (Six Months Ended June 30) | Metric | 2025 | 2024 (Restated) | Increase (Decrease) | % Change | | :----------------------- | :--- | :-------------- | :------------------ | :------- | | Revenue | $0 | $118,347 | $(118,347) | -100% | | Operating Expenses | $2,987,988 | $3,816,242 | $(828,254) | -22% | | Loss from Operations | $(2,987,988) | $(3,698,362) | $710,374 | -19% | | Net Income (Loss) | $(3,277,023) | $(3,975,079) | $698,056 | -18% | - Revenue decreased by 100% to $0 for the six months ended June 30, 2025, due to no cash receipts from recent licensing agreements[352] - Operating expenses decreased by 22% to $2,987,988, primarily due to a $694,120 decrease in stock-based compensation expenses[353] - Net loss decreased by 18% to $3,277,023, mainly driven by the decrease in operating expenses[356] Asset Recognition and Investment Reclassification This section details the recognition of new assets and the reclassification of certain investments on the Company's balance sheet - On March 31, 2025, the Company recognized the acquisition of land in Puli, Taiwan, with a carrying value of approximately $7.67 million, intended for health-related business development[357] - Amounts previously classified as 'Due from Related Parties' were reclassified to 'Long-Term Investments' to reflect the strategic nature and expected holding period of the investment in Rgene Corporation[357] Liquidity and Capital Resources This section assesses the Company's liquidity position, working capital, and sources and uses of capital Working Capital (Deficit) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Current Assets | $2,770,401 | $2,179,815 | | Current Liabilities | $6,532,514 | $6,557,461 | | Working Capital (Deficit) | $(3,762,113)| $(4,377,616) | - The Company reported a net loss of $3,277,023 and a working capital deficit of $3,762,113 for the six months ended June 30, 2025, raising substantial doubt about its ability to continue as a going concern[359] - Net cash used in operating activities increased by 23% to $1,434,007 for the six months ended June 30, 2025, primarily due to an increase in amounts due from related parties[362][363] - Net cash provided by financing activities increased by 37% to $2,356,083, driven by proceeds from private offerings and warrant exercises, partially offset by short-term loan repayments[362][365] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, ABVC BioPharma, Inc. is not required to provide quantitative and qualitative disclosures about market risk - The Company is exempt from providing quantitative and qualitative disclosures about market risk as it qualifies as a smaller reporting company[367] Item 4. Controls and Procedures This section assesses the effectiveness of the Company's disclosure controls and internal control over financial reporting - Disclosure controls and procedures were deemed ineffective as of June 30, 2025, due to a material weakness in internal control over financial reporting[368] - The material weakness resulted in material misstatements in financial statements and a restatement, highlighting the inability to maintain effective controls[368] - Management is developing a plan to remediate the material weakness, including hiring personnel with requisite technical accounting knowledge[369] PART II. OTHER INFORMATION This section provides additional information not covered in the financial statements, including legal proceedings, equity sales, and exhibits Item 1. Legal Proceedings The Company is not currently a party to any legal proceedings that would individually or in aggregate have a material adverse effect on its business, financial condition, or results of operations - The Company is not currently involved in any legal proceedings whose adverse outcome would materially affect its business, financial condition, or results of operations[372] Item 1A. Risk Factors As a smaller reporting company, ABVC BioPharma, Inc. is not required to provide the information typically included under this item - The Company is exempt from providing risk factor disclosures as it qualifies as a smaller reporting company[373] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the Company's unregistered sales of equity securities, primarily common stock, issued for various purposes - The Company issued 169,992 shares of common stock for rent payable through July 2024, totaling $127,494, and continued to issue shares for rent payments in 2025[375] - Between April 11, 2025, and April 30, 2025, the Company conducted a private offering to non-U.S. investors, issuing 724,372 unregistered shares for $436,125[376] - Additional private offerings between May 9, 2025, and June 20, 2025, resulted in the issuance of 2,865,628 shares to non-U.S. persons, raising approximately $1,473,250[378][379][380][381][382] - The Company issued 117,277 shares to employees as compensation in December 2024 and 90,277 shares to an employee for additional services in April 2025[376][378] Item 3. Defaults Upon Senior Securities There were no defaults upon senior securities reported by the Company - No defaults upon senior securities were reported[383] Item 4. Mine Safety Disclosures This item is not applicable to the Company - Mine safety disclosures are not applicable to the Company[384] Item 5. Other Information No other material information or changes in Rule 10b5-1 trading arrangements were reported by officers or directors during the six months ended June 30, 2025 - No officers or directors reported the adoption, modification, or termination of any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the six months ended June 30, 2025[385] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including various agreements, corporate documents, and certifications, many of which are incorporated by reference from previous SEC filings - The report includes a comprehensive list of exhibits, such as Share Exchange Agreements, Articles of Incorporation, Bylaws, Forms of Warrant, Collaboration Agreements, Securities Purchase Agreements, and various certifications[386][387]