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Item 2. Management’s Discussion and Analysis

2022-08-15 compared with 2022-05-16 · 658 added, 584 removed, 917 unchanged (58% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Caution Regarding Forward-Looking Information

FORWARD-LOOKING INFORMATION

The following information

should be read in conjunction with ABVC BioPharma, Inc.

and its subsidiaries (“we”, “us”, “our”,

or the “Company”) condensed unaudited financial statements and the notes thereto contained elsewhere in this report.

in this Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere

in this Form 10-Q that does not consist of historical facts, are “forward-looking statements.” Statements accompanied or

qualified by, or containing words such as “may,” “will,” “should,” “believes,” “expects,”

“intends,” “plans,” “projects,” “estimates,” “predicts,” “potential,”

“outlook,” “forecast,” “anticipates,” “presume,” and “assume” constitute

forward-looking statements, and as such, are not a guarantee of future performance.

Forward-looking statements

are subject to risks and uncertainties, certain of which are beyond our control.

Actual results could differ materially from those anticipated

as a result of the factors described in the “Risk Factors” and detailed in our other Securities and Exchange Commission (“SEC”)

The following information should be read in conjunction

with ABVC BioPharma, Inc.

and its subsidiaries (“we”, “us”, “our”, or the “Company”)

condensed unaudited financial statements and the notes thereto contained elsewhere in this report.

Information in this Item 2, “Management’s

Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this Form 10-Q that does not consist

of historical facts, are “forward-looking statements.” Statements accompanied or qualified by, or containing words such as

“may,” “will,” “should,” “believes,” “expects,” “intends,” “plans,”

“projects,” “estimates,” “predicts,” “potential,” “outlook,” “forecast,”

“anticipates,” “presume,” and “assume” constitute forward-looking statements, and as such, are not

a guarantee of future performance.

Forward-looking statements are subject to risks

and uncertainties, certain of which are beyond our control.

Actual results could differ materially from those anticipated as a result

of the factors described in the “Risk Factors” and detailed in our other Securities and Exchange Commission (“SEC”)

Risks and uncertainties can include, among others, international, national and local general economic and market conditions:

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Consequently, investors should not place undue reliance on forward-looking statements as predictive of future results.

Because of these risks

and uncertainties, the forward-looking events and circumstances discussed in this report or incorporated by reference might not transpire.

Factors that cause actual results or conditions to differ from those anticipated by these and other forward-looking statements include

those more fully described elsewhere in this report and in the “Risk Factors” section of our annual report on form 10-K.

The Company disclaims

any obligation to update the forward-looking statements in this report.

Because of these risks and uncertainties, the

forward-looking events and circumstances discussed in this report or incorporated by reference might not transpire.

Factors that cause

actual results or conditions to differ from those anticipated by these and other forward-looking statements include those more fully

described elsewhere in this report and in the “Risk Factors” section of our annual report on form 10-K.

The Company disclaims any obligation to update

the forward-looking statements in this report.

From its inception, the Company has not generated substantial revenue

from its medical device and new drug development.

For the three months ended March 31, 2022, the Company generated $25,660 in revenue,

mainly from the sale of Contract Development & Manufacturing Organization (“CDMO”) services.

For the six months ended June 30, 2022, the Company generated $336,961 in revenue, mainly

from the sale of Contract Development & Manufacturing Organization (“CDMO”) services, and $1,559 from consulting services

provided to a related party.

Business Overview

ABVC BioPharma Inc., which was incorporated in

July 2015 in the State of Delaware, is a clinical stage biopharmaceutical company focused on development of new drugs and medical devices,

all of which are derived from plants.

Medicines derived from plants have a long history

of relieving or preventing many diseases and, typically, have exhibited fewer side effects than drugs developed from animals or chemical

Perhaps the most famous example is aspirin, which evolved from a compound found in the bark and leaves of the willow tree

and was later marketed by Bayer starting in 1899.

Aspirin has very few serious side effects and has proven to be one of the most successful

drugs in medical history.

Some 50 years later, scientists identified anticancer compounds in the rosy periwinkle, which Eli Lilly subsequently

produced for the treatment of leukemia and Hodgkins disease.

Other well-known examples of successful botanical drugs include the cancer-fighting

Taxol, isolated from the Pacific yew tree.

The Company develops its pipeline by carefully

tracking new medical discoveries or medical device technologies in research institutions in the Asia-Pacific region.

Pre-clinical, disease

animal model and Phase I safety studies are examined closely by the Company’s scientists and other specialists known to the Company

to identify drugs that it believes demonstrate efficacy and safety based on the Company’s internal qualifications.

is shown to be a good candidate for further development and ultimately commercialization, BriVision licenses the drug or medical device

from the original researchers and begins to introduce the drugs clinical plan to highly respected principal investigators in the United

States, Australia and Taiwan.

In almost all cases, we have found that research institutions in each of those countries are eager to work

with the Company to move forward with Phase II clinical trials.

ABVC BioPharma Inc., which was incorporated in July 2015 in the State

of Delaware, is a clinical stage biopharmaceutical company focused on the development of medical devices and new drugs derived from plants.

Medicines derived from plants have a long history of relieving or preventing

many diseases and have typically exhibited fewer side effects than drugs developed from animals or chemical ingredients.

Perhaps the most

famous example is aspirin, which evolved from a compound found in the bark and leaves of the willow tree and was later marketed by Bayer

starting in 1899.

Aspirin has very few serious side effects and has proven to be one of the most successful drugs in medical history.

Some 50 years later, scientists identified anticancer compounds in the rosy periwinkle, which Eli Lilly subsequently produced for the

treatment of leukemia and Hodgkins disease.

Other well-known examples of successful botanical drugs include the cancer-fighting Taxol,

isolated from the Pacific yew tree.

The Company develops its pipeline by carefully tracking new medical

discoveries and medical device technologies of research institutions in the Asia-Pacific region.

Pre-clinical, disease animal model and

Phase I safety studies are examined closely by the Company’s scientists and other specialists known to the Company to identify drugs

that it believes demonstrate efficacy and safety based on the Company’s internal qualifications.

Once a drug is shown to be a good

candidate for further development and ultimately commercialization, BriVision licenses the drug or medical device from the original researchers

and begins to introduce the drugs clinical plan to highly respected principal investigators in the United States, Australia and Taiwan.

In almost all cases, we have found that research institutions in each of those countries are eager to work with the Company to move forward

with Phase II clinical trials.

Currently, institutions conducting phase II clinical trials in partnership

with ABVC include:

ABV-1701, Vitargus® in vitrectomy surgery, Pivotal Study in Australia, Principal

Investigator:

Andrew Chang, MD, Ph.D., Sydney Eye Hospital, Australia

ABV-1701, Vitargus® in vitrectomy surgery, Pivotal Study in Australia, Principal Investigator:

Andrew Chang, MD, Ph.D., Sydney

Eye Hospital, Australia

ABV-1504, Major Depressive Disorder (MDD), Phase II, NCE drug Principal Investigators:

DeBattista M.D.

Schatzberg, MD, Stanford University Medical Center, Cheng-Ta

Li, MD, Ph.D – Taipei Veterans General Hospital

ABV-1505, Adult Attention-Deficit Hyperactivity Disorder (ADHD), Phase II, NCE drug Principal

Investigators:

Charles DeBattista M.D.

MD, Stanford University Medical Center, Cheng-Ta Li, MD, Ph.D – Taipei Veterans General Hospital

ABV-1505, Adult Attention-Deficit Hyperactivity Disorder (ADHD), Phase II, NCE drug Principal Investigators:

Keith McBurnett, Ph.D.

and Linda Pfiffner, Ph.D., University of California

San Francisco (UCSF), School of Medicine

Linda Pfiffner, Ph.D., University of California San Francisco (UCSF), School of Medicine

ABV-1601, Major Depression in Cancer Patients, Phase I/II, NCE drug Principal Investigator:

Scott Irwin, MD, Ph.D.

– Cedars Sinai Medical Center (CSMC)

ABV-1703, Advanced Inoperable or Metastatic Pancreatic Cancer, Phase II, NCE drug Principal

Investigator:

Hendifar, MD – Cedars Sinai Medical Center (CSMC)

ABV-1501, A Phase I/II, Open Label Study to Evaluate the Safety and Efficacy of BLEX 404

Oral Liquid Combined with Docetaxel Monotherapy in Patients with Stage IV or Recurrent Breast

Cancer Patients

ABV-2002, Class I/II through 510K for market launch, Corneal Storage Media, Technology

Licensing in progress

Upon successful completion of the Phase II trial,

the Company will seek a partner – a large pharmaceutical company – to complete a Phase III study, submit the New Drug Application

(NDA), and commercialize the drug upon approval by the FDA and Taiwan FDAs.

The Company expects to seek its first commercialization partner

in 2021 for Vitargus, its vitreous substitute that helps to maintain a round shape and retinal location during vitrectomy surgery.

Another part of the Company’s business

is conducted by BioKey, a wholly owned subsidiary, that is engaged in a wide range of services, including, API characterization, pre-formulation

studies, formulation development, analytical method development, stability studies, IND/NDA/ANDA/510K submissions, and manufacturing

clinical trial materials (phase I through phase III) and commercial manufacturing.

Sinai Medical Center (CSMC)

ABV-1703, Advanced Inoperable or Metastatic Pancreatic Cancer, Phase II, NCE drug Principal Investigator:

Hendifar, MD – Cedars

Sinai Medical Center (CSMC)

ABV-1501, A Phase I/II, Open Label Study to Evaluate the Safety and Efficacy of BLEX 404 Oral Liquid Combined with Docetaxel Monotherapy

in Patients with Stage IV or Recurrent Breast Cancer Patients

ABV-2002, Class I/II through 510K for market launch, Corneal Storage Media, Technology Licensing in progress

Upon successful completion of the Phase II trial, the Company will

seek a partner – a large pharmaceutical company – to complete a Phase III study, submit the New Drug Application (NDA), and

commercialize the drug upon approval by the U.S.

and Taiwan FDAs.

The Company expects to seek its first commercialization partner in 2023

for Vitargus, a vitreous substitute that helps to maintain the retina’s round shape and location during vitrectomy surgery.

Another part of the Company’s business is conducted by BioKey,

a wholly-owned subsidiary, that is engaged in a wide range of services, including, API characterization, pre-formulation studies, formulation

development, analytical method development, stability studies, IND/NDA/ANDA/510K submissions, and manufacturing clinical trial materials

(phase I through phase III) and commercial manufacturing.

On February 8, 2019, the Company, BioLite Holding,

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(file number 333-226285), which became effective by operation of law on or about February 5, 2019.

BioLite was incorporated under the laws of the

State of Nevada on July 27, 2016, with 500,000,000 shares authorized, par value $0.0001.

BioLite’s key subsidiaries include BioLite

(“BioLite BVI”) that was incorporated in the British Virgin Islands on September 13, 2016 and BioLite, Inc.

Taiwan”), a Taiwanese corporation that was founded in February 2006.

BioLite Taiwan has been in the business of developing new

drugs for over ten years.

BioLite was incorporated under the laws of the State of Nevada on July

27, 2016, with 500,000,000 shares authorized, par value $0.0001.

BioLite’s key subsidiaries include BioLite BVI, Inc.

BVI”), which was incorporated in the British Virgin Islands on September 13, 2016 and BioLite, Inc.

(“BioLite Taiwan”),

a Taiwanese corporation that was founded in February 2006.

BioLite Taiwan has been in the business of developing new drugs for over ten

BioLite and BioLite BVI are holding companies

and have not carried out substantive business operations of their own.

In January 2017, BioLite, BioLite BVI, BioLite

Taiwan, and certain shareholders of BioLite Taiwan entered into a share purchase / exchange agreement (the “BioLite Share Purchase

/ Exchange Agreement”).

Pursuant to the BioLite Share Purchase / Exchange Agreement, the shareholder participants to the BioLite

Share Purchase / Exchange Agreement sold their equity in BioLite Taiwan and used the proceeds from such sales to purchase shares of Common

Stock of BioLite at the same price per share, resulting in their owning the same number of shares of Common Stock as they owned in BioLite

Upon closing of the Share Purchase/ Exchange Agreement in August 2017, BioLite owns, via BioLite BVI, approximately 73% of BioLite

The other shareholders who did not enter this Share Purchase/ Exchange Agreement retain their equity ownership in BioLite Taiwan.

In January 2017, BioLite, BioLite BVI, BioLite Taiwan, and certain

shareholders of BioLite Taiwan entered into a share purchase / exchange agreement (the “BioLite Share Purchase / Exchange Agreement”).

Pursuant to the BioLite Share Purchase / Exchange Agreement, the shareholder participants to the BioLite Share Purchase / Exchange Agreement

sold their equity in BioLite Taiwan and used the proceeds from such sales to purchase shares of Common Stock of BioLite at the same price

per share, resulting in share ownership in BioLite Common Stock equal to the number of shares they had held in BioLite Taiwan Common Stock.

Upon closing of the Share Purchase/ Exchange Agreement in August 2017, BioLite owned, via BioLite BVI, approximately 73% of BioLite Taiwan.

The other shareholders who did not enter this Share Purchase/ Exchange Agreement retained their equity ownership in BioLite Taiwan.

BioKey was incorporated on August 9, 2000 in

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Common Stock Reverse Split

On March 12, 2019, the Board by unanimous written

consent in lieu of a meeting approved to i) effect a stock reverse split at the ratio of 1-for-18 (the “Reverse Split”) of

both the authorized common stock of the Company and the issued and outstanding common stock and ii) to amend the articles of incorporation

of the Company to reflect the Reverse Split.

The Board approved and authorized the Reverse Split without obtaining approval of the Company’s

shareholders pursuant to Section 78.207 of Nevada Revised Statutes.

On May 3, 2019, the Company filed a certificate

of amendment to the Company’s articles of incorporation (the “Amendment”) to effect the Reverse Split with the Secretary

of State of the State of Nevada.

On March 12, 2019, the Board, by unanimous written consent in lieu

of a meeting, approved to i) implement a stock reverse split at the ratio of 1-for-18 (the “Reverse Split”) of both the authorized

common stock of the Company and the issued and outstanding common stock and ii) to amend the articles of incorporation of the Company

to reflect the Reverse Split.

The Board approved and authorized the Reverse Split without obtaining approval of the Company’s shareholders

pursuant to Section 78.207 of Nevada Revised Statutes.

On May 3, 2019, the Company filed a certificate of amendment to the

Company’s articles of incorporation (the “Amendment”) to implement the Reverse Split with the Secretary of State of

the State of Nevada.

The Reverse Split took effect on May 8, 2019.

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NASDAQ Listing

On August 5, 2021, we closed a public offering

(the “Offering”) of 1,100,000 units (the “Units”), with each Unit consisting of one share of our common

stock (the “Common Stock”), one Series A warrant (the “Series A Warrants”) to purchase one share of common stock

at an exercise price equal to $6.30 per share, exercisable until the fifth anniversary of the issuance date, and one Series B warrant

(the “Series B Warrants,” and together with the Series A Warrants, the “Public Warrants”) to purchase one share

of common stock at an exercise price equal to $10.00 per share, exercisable until the fifth anniversary of the issuance date;

exercise price of the Public Warrants are subject to certain adjustment and cashless exercise provisions as described therein.

completed the Offering pursuant to its registration statement on Form S-1 (File No.

333-255112), originally filed with the Securities

and Exchange Commission (the “SEC”) on April 8, 2021 (as amended, the “Original Registration Statement”), that

the SEC declared effective on August 2, 2021 and the registration statement on Form S-1 (File No.

333-258404) that was filed and automatically

effective on August 4, 2021 (the “S-1MEF,” together with the Original Registration Statement, the “Registration Statement”).

The Units were priced at $6.25 per Unit, before underwriting discounts and offering expenses, resulting in gross proceeds of $6,875,000.

The Offering was conducted on a firm commitment basis.

On August 5, 2021, we closed a public offering (the “Offering”)

of 1,100,000 units (the “Units”), with each Unit consisting of one share of our common stock (the “Common

Stock”) and one Series A warrant (the “Series A Warrants”) to purchase one share of common stock at an exercise price

equal to $6.30 per share, exercisable until the fifth anniversary of the issuance date, and one Series B warrant (the “Series

B Warrants,” and together with the Series A Warrants, the “Public Warrants”) to purchase one share of common stock at

an exercise price equal to $10.00 per share, exercisable until the fifth anniversary of the issuance date;

the exercise price of

the Public Warrants are subject to certain adjustment and cashless exercise provisions as described therein.

The Company completed the

Offering pursuant to its registration statement on Form S-1 (File No.

333-255112), originally filed with the Securities and Exchange Commission

(the “SEC”) on April 8, 2021 (as amended, the “Original Registration Statement”), that the SEC declared effective

on August 2, 2021 and the registration statement on Form S-1 (File No.

333-258404) that was filed and automatically effective on August

4, 2021 (the “S-1MEF,” together with the Original Registration Statement, the “Registration Statement”).

were priced at $6.25 per Unit, before underwriting discounts and offering expenses, resulting in gross proceeds of $6,875,000.

Offering was conducted on a firm commitment basis.

The Common Stock was approved for listing on The Nasdaq Capital Market and commenced

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Name Change and CUSIP Number

The Company’s shareholders approved an

amendment to the Company’s Articles of Incorporation to change the Company’s corporate name to “ABVC BioPharma, Inc.”

and approved and adopted the Certificate of Amendment to affect same at the 2020 annual meeting of shareholders (the “ Annual

Nevada’s Secretary of State approved the name change on March 8, 2021, but since are still in the FINRA approval

process for such name change, the new name is not yet effective.

Stock certificates will remain valid and stockholders are not required

to submit their stock certificates for exchange as a result of the name change.

New stock certificates issued by the Company will

be printed with the Company’s new name, ABVC BioPharma, Inc.;

existing stock certificates will remain valid.

The Company’s shareholders approved an amendment to the Company’s

Articles of Incorporation in order to change the Company’s corporate name to “ABVC BioPharma, Inc.”;

they also approved

and adopted the Certificate of Amendment to implement the name at the 2020 annual meeting of shareholders (the “ Annual Meeting ”).

Nevada’s Secretary of State approved the name change on March 8, 2021.

After FINRA approval, the new name took effect.

Stock certificates

have remained valid and stockholders have not been required to submit their stock certificates for exchange as a result of the name change.

New stock certificates issued by the Company have been printed with the Company’s new name, ABVC BioPharma, Inc.;

stock certificates remain valid.

The Company’s CUSIP number is 0091F106.

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Joint Venture Agreement

On October 6, 2021 (the “ Completion

Date ”), ABVC BioPharma, Inc.

(the “ Company ”), Lucidaim Co., Ltd., a Japanese corporation (“ Lucidaim ,”

together with the Company, the “ Shareholders ”), and BioLite Japan K.K., a Japanese corporation (“ Biolite

JP” ) entered into a Joint Venture Agreement (the “ Agreement ”).

Biolite JP is a private limited company (a

Japanese Kabushiki Kaisha ) incorporated on December 18, 2018 and at the date of the Agreement has 10,000 ordinary shares

authorized, with 3,049 ordinary shares issued and outstanding (the “ Ordinary Shares ”).

Immediately prior to the execution

of the Agreement, Lucidaim owned 1,501 ordinary shares and the Company owned the 1,548 ordinary shares.

The Shareholders entered into

the joint venture to formally reduce to writing their desire to invest in and operate Biolite JP as a joint venture.

The business of

the joint venture shall be the research and development of drugs, medical device and digital media, investment, fund running and consulting,

distribution and marketing of supplements carried on by Biolite JP and its subsidiaries in Japan, or any other territory or businesses

as may from time to time be agreed by an amendment to the Agreement.

The closing of the transaction is conditioned upon the approval

and receipt of all necessary government approvals, which have been received.

On October 6, 2021 (the “ Completion Date ”), ABVC

BioPharma, Inc.

(the “ Company ”), Lucidaim Co., Ltd., a Japanese corporation (“ Lucidaim ,” together

with the Company, the “ Shareholders ”), and BioLite Japan K.K., a Japanese corporation (“ Biolite JP” )

entered into a Joint Venture Agreement (the “ Agreement ”).

Biolite JP is a private limited company (a Japanese Kabushiki

Kaisha ) incorporated on December 18, 2018 and at the date of the Agreement had 10,000 ordinary shares authorized, with 3,049 ordinary

shares issued and outstanding (the “ Ordinary Shares ”).

Immediately prior to the execution of the Agreement, Lucidaim

owned 1,501 ordinary shares and the Company owned 1,548 ordinary shares.

The Shareholders entered into the joint venture to formally reduce

to writing their intention to invest in and operate Biolite JP as a joint venture.

The business of the joint venture shall be the research

and development of drugs, medical device and digital media, investment, fund raising and consulting, distribution and marketing of supplements

carried by Biolite JP and its subsidiaries in Japan, or any other territory or business, as the Agreement may with mutual consent be amended

from time to time.

The closing of the transaction was conditioned upon the approval and receipt of all necessary government approvals,

which have all been received.

Pursuant to the Agreement and the related share

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occurred on the Completion Date.

As per the Agreement, the Shareholders shall

supervise and manage the business and operations of Biolite JP.

The directors shall not be entitled to any renumeration for their services

as a director and each Shareholder can remove and replace the director he/she/it appointed.

If a Shareholder sells or disposes of all

of its Ordinary Shares, the director such Shareholder appointed must tender his/her resignation.

The Agreement also sets forth certain

corporate actions that must be pre-approved by all Shareholders (the “ Reserved Matters ”).

If the Shareholders are

unable to make a decision on any Reserved Matter, then either Shareholder can submit a deadlock notice to the other shareholder, 5 days

after which they must refer the matter to each Shareholder’s chairman and use good faith to resolve the dispute.

If such dispute

is not resolved within 10 days thereafter, then either Shareholder can offer to buy all of the other Shareholder’s Ordinary Shares

for cash at a specified price;

As per the Agreement, the Shareholders shall supervise and manage the

business and operations of Biolite JP.

The directors shall not be entitled to any renumeration for their services as a director and each

Shareholder can remove and replace the director he/she/it appointed.

If a Shareholder sells or disposes of all of its Ordinary Shares,

the Shareholder-appointed director must tender his/her resignation.

The Agreement also sets forth certain corporate actions that must

be pre-approved by all Shareholders (the “ Reserved Matters ”).

If the Shareholders are unable to make a decision on

any Reserved Matter, then either Shareholder can submit a deadlock notice to the other shareholder, 5 days after which they must refer

the matter to each Shareholder’s chairman and use good faith to resolve the dispute.

If such dispute is not resolved within 10 days

thereafter, then either Shareholder can offer to buy all of the other Shareholder’s Ordinary Shares for cash at a specified price;

if there is not affirmative acceptance of the sale, the sale shall proceed as set forth in the sale offer.

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risk with Vitargus®.

On August 2, 2022 the Company received the formal approval from Central

Research Ethics Committee (CREC) of The National Research Council of Thailand for Vitargus® Phase II Study Protocol (ABV-1701-02)

to be conducted at Ramathibodi Hospital, Mahidol University and Srinagarind Hospital, Khon Kaen University of Thailand.

The Phase II clinical

study entitled “A Prospective Multi-Site Randomized Controlled Clinical Investigation of the Safety and Effectiveness of the ABV1701

Ocular Endotamponade (OE)” will be initiated in Thailand.

In parallel, Vitargus Phase II Study protocol documents are

being reviewed by the Australian Bellberry Human Research Ethics Committee (HREC).

Upon approval,

the Clinical Trial Notification (CTN) of the study will be applied from Australian Therapeutic Goods Administration (TGA) for its

clinical initiation in Australia.

On November 9, 2020 the Company issued a full

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the therapeutic value of PDC-1421, support further clinical development of ABV-1505 for the treatment of adult ADHD.

On July 12, 2022, the Company announced the enrollment

progress in the Phase II Part II clinical study of the company’s ADHD medicine (ABV-1505).

Since the first-treated subject reported

on May 10, 2022, a total of twenty-two (22) subjects have been enrolled in the study from a total of thirty-two subjects screened.

of the enrolled participants from the three arms has completed the 8-week treatment per study design.

The study, a randomized, double-blind,

placebo-controlled study entitled “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 involve 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 1 study of ABV-1505 completed successfully at UC, San Francisco and accepted by the U.S.

Food & Drug Administration

in October of 2020.

On November 4, 2020, we executed an amendment

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Public Offering & Financings

Financing in May 2022

On May 11, 2022, the Company and an institutional investor entered

into certain securities purchase agreement relating to the offer and sale of 2,000,000 shares of common stock, par value $0.001 per share

in a registered direct offering.

Pursuant to the Offering, the Company also issued 5-year warrants to purchase 2,000,000 shares of Common

Stock, exercisable at a price of $2.45 per share to the Purchasers.

The sale and offering of the shares and the warrants pursuant to such

securities purchase agreement was implemented as a takedown off the Company’s shelf registration statement on Form S-3, as amended

333-260588), which became effective on November 29, 2021.

WallachBeth Capital LLC and ViewTrade Securities, Inc.

acted as co-placement

agents for the aforementioned offering of the shares and warrants.

The Company paid to the co-placement agents an aggregate cash fee equal

to 8% of the aggregate sales price of the securities sold and issued them warrants to purchase up to 160,000 shares of Common Stock, on

the same terms as the warrants issued to the institutional investor.

Financing in August 2021

On August 5, 2021, the Company closed its public

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and received the payment from such investor on October 30, 2020.

The October Note was issued on October 23, 2020

and the maturity date of the October Note is the twenty-four (24) month anniversary from the issuance date (the “ Maturity Date ”).

Upon the Maturity Date, the Company shall pay to the holder, in cash, an amount representing all outstanding principal amount and accrued

and unpaid interest under the October Note.

The October Note bears an interest rate of ten percent (10%) per annum and may be convertible

into shares of the Company’s common stock at a fixed conversion price of $2.25 per share.

The holder of the October Note may elect

to convert part or all of the outstanding balance of the October Note from the issuance date until the Maturity Date.

The Company may

prepay the outstanding amount at any time, in whole or in part, without any penalty.

On June 3, 2021, the parties to the October SPA

signed Amendment No.

1 to Promissory Note (the “ Amendment ”).

Pursuant to the Amendment, the October Note shall now

also automatically convert into shares of the Company’s common stock immediately following the Company’s receipt of conditional

approval to list its common stock on the NASDAQ stock market, if and when we receive such approval, which cannot be guaranteed, at a

conversion price equal to the then current conversion price.

In connection with the October Note and pursuant

to the terms of an agreement entered into between the Company and a FINRA member firm, such firm shall receive (i) a cash success fee

of $78,750 and (ii) upon conversion of the October Note, warrants equal to 7.0% of the number of shares of Common Stock received by the

investor at the time of conversion (“ Note Warrants ”).

The warrants are exercisable on a cashless basis, at the holder’s

The October Note was issued on October 23, 2020 and the maturity date

of the October Note is the twenty-four (24) month anniversary from the issuance date (the “ Maturity Date ”).

Maturity Date, the Company shall pay to the holder, in cash, an amount representing all outstanding principal amount and accrued and unpaid

interest under the October Note.

The October Note bears an interest rate of ten percent (10%) per annum and may be convertible into shares

of the Company’s common stock at a fixed conversion price of $2.25 per share.

The holder of the October Note may elect to convert

part or all of the outstanding balance of the October Note from the issuance date until the Maturity Date.

The Company may prepay the

outstanding amount at any time, in whole or in part.

On May 17, 2021, the parties to the October SPA signed Amendment No.

1 to Promissory

Note (the “Amendment”).

Pursuant to the Amendment, the Note shall also be automatically converted into shares of the Company’s

common stock immediately following the Company’s receipt of conditional approval to list its common stock on the NASDAQ stock market,

if and when the Company receives such approval, at a conversion price equal to $2.25 per share.

On July 21, 2021, The Company converted

its convertible promissory note totaling $2,500,000 into 1,111,112 shares of the Company’s common stock and warrants.

In connection with the October Note and pursuant to the terms of an

agreement entered into between the Company and a FINRA member firm, such firm shall receive (i) a cash success fee of $78,750 and (ii)

upon conversion of the October Note, warrants equal to 7.0% of the number of shares of Common Stock received by the investor at the time

of conversion (“ Note Warrants ”).

The warrants are exercisable on a cashless basis, at the holder’s discretion.

As of the date of this filing, the cash success fee was paid, while the principal amount and related interest is due to be paid.

The issuance and sale of the Common Stock, the

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Financing in May 2020

In May 2020, the Company received capital contributions

of approximately $1,602,040 in cash from 40 investors through private placements with the term of $2.25 per share and a free warrant

attaches with each Common stock that was purchased.

The exercise price of the warrant will be at $6.00 with a mandatory exercise price

In May 2020, the Company received capital contributions of approximately

$1,602,040 in cash from 40 investors through private placements with the terms specifying a purchase price of $2.25 per share and a free

warrant attached to each Common stock that was purchased.

The exercise price of the warrant will be at $6.00 with a mandatory exercise

price of $9.00.

Pursuant to the terms of an agreement entered

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Financing in April 2020

On January 21, 2020, the Company entered into

three note agreements with existing note investors who executed the agreements in 2018.

These three investors are Guoliang Yu and Yingfei

Wei Family Trust, Keypoint Technology Ltd., and Yoshinobu Odaira.

The new agreements bear the same term as other notes investors who

executed the contract in 2019.

On January 21, 2020, the Company entered into three note agreements

with existing note investors who executed the agreements in 2018.

These three investors are Guoliang Yu and Yingfei Wei Family Trust,

Keypoint Technology Ltd., and Yoshinobu Odaira.

The new agreements bear the same terms as that of other note investors who executed the

contract in 2019.

On April 5, 2020, the Company entered into exchange agreements with such note holders.

Pursuant to the

exchange agreements, the Holders agreed to deliver the Notes to the Company for cancellation, of which the aggregate principal amount

plus accrued interest expenses are $931,584, and the Company agreed to issue to the Holders an aggregate of 506,297 shares of the Company’s

common stock and warrants to purchase 506,297 shares of the Company’s common stock.

On August 28, 2019 and September 4, 2019, the

Company issued convertible promissory notes in the aggregate principal amount plus accrued interest expenses are $515,196 to Kuo, Li

Shen, Chang, Ping Shan, Lin, Shan Tyan, and Liu, Ching Hsuan.

On April 20, 2020, the Company entered into separate exchange agreements

with each note holder.

Pursuant to the exchange agreements, the note holders agreed to cancel the notes and the Company agreed to issue

to the holders an aggregate of 289,438 shares of the Company’s common stock and warrants to purchase 289,438 shares of the Company’s

common stock.

Pursuant to the exchange agreements,

the Holders agreed to deliver the Notes to the Company for cancellation, of which the aggregate principal amount plus accrued interest

expenses are $931,584, and the Company agreed to issue to the Holders an aggregate of 506,297 shares of the Company’s common stock

and warrants to purchase 506,297 shares of the Company’s common stock.

On August 28, 2019 and September 4, 2019, the Company issued convertible

promissory notes in the aggregate principal amount plus accrued interest expenses of $515,196 to Kuo, Li Shen, Chang, Ping Shan, Lin,

Shan Tyan, and Liu, Ching Hsuan.

On April 20, 2020, the Company entered into separate exchange agreements with each note holder.

to the exchange agreements, the note holders agreed to cancel the notes and the Company agreed to issue to the holders an aggregate of

289,438 shares of the Company’s common stock and warrants to purchase 289,438 shares of the Company’s common stock.

Key elements of our business strategy include:

to the pivotal trial phase of ABV-1701 Vitargus® for the treatments of Retinal Detachment

or Vitreous Hemorrhage, which we expect to generate revenues in the future.

on licensing ABV-1504 for the treatment of major depressive disorder, MDD, after the successful

completion of its Phase II clinical trials.

Phase II, Part 2 clinical trial for ABV-1505 for the treatment of attention deficit hyperactivity

disorder, ADHD.

licensing drug candidates and medical device candidates to major pharmaceutical companies

for phase III and pivotal clinical trials, as applicable, and further marketing if approved

to the pivotal trial phase of ABV-1701 Vitargus® for the treatments of Retinal Detachment or Vitreous Hemorrhage, which we expect

to generate revenues in the future.

on licensing ABV-1504 for the treatment of major depressive disorder, MDD, after the successful completion of its Phase II clinical trials.

Phase II, Part 2 clinical trial for ABV-1505 for the treatment of attention deficit hyperactivity disorder, ADHD.

licensing drug candidates and medical device candidates to major pharmaceutical companies for phase III and pivotal clinical trials,

as applicable, and further marketing if approved by the FDA.

We plan to augment our core research and development

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CNS, Hematology/Oncology and Ophthalmology.

Our management team has extensive experiences

across a wide range of new drug and medical device development and we have in-licensed new drug and medical device candidates from large

research institutes and universities in both the U.S.

Through an assertive product development approach, we expect that we

will build a substantial portfolio of Oncology/ Hematology, CNS and Ophthalmology products.

We primarily focus on Phase I and II research

of new drug candidates and out license the post-Phase-II products to pharmaceutical companies;

we do not expect to devote substantial

efforts and resources to building the disease-specific distribution channels.

Our management team has extensive experiences across a wide range of

new drug and medical device development, and we have in-licensed new drug and medical device candidates from large research institutes

and universities in both the U.S.

Through an assertive product development approach, we expect that we will build a substantial

portfolio of Oncology/ Hematology, CNS and Ophthalmology products.

We primarily focus on Phase I and II research of new drug candidates

and out license the post-Phase-II products to pharmaceutical companies;

we do not expect to devote substantial efforts and resources to

building the disease-specific distribution channels.

Business Objectives

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R&D personnel costs, discount rates and probabilities of technical and regulatory success.

The Company had multiple deliverables under the

collaborative agreements, including deliverables relating to grants of technology licenses, regulatory and clinical development, and

marketing activities.

Estimation of the performance periods of the Company’s deliverables requires the use of management’s

Significant factors considered in management’s evaluation of the estimated performance periods include, but are not limited

to, the Company’s experience in conducting clinical development, regulatory and manufacturing activities.

The Company reviews the

estimated duration of its performance periods under its collaborative agreements on an annually basis, and makes any appropriate adjustments

on a prospective basis.

Future changes in estimates of the performance period under its collaborative agreements could impact the timing

of future revenue recognition.

The Company had multiple deliverables under the collaborative agreements,

including deliverables relating to grants of technology licenses, regulatory and clinical development, and marketing activities.

of the performance periods of the Company’s deliverables requires the use of management’s judgment.

Significant factors considered

in management’s evaluation of the estimated performance periods include, but are not limited to, the Company’s experience

in conducting clinical development, regulatory and manufacturing activities.

The Company reviews the estimated duration of its performance

periods under its collaborative agreements on an annual basis, and makes any appropriate adjustments on a prospective basis.

Future changes

in estimates of the performance period under its collaborative agreements could impact the timing of future revenue recognition.

(i) Nonrefundable upfront payments

If a license to the Company’s intellectual

property is determined to be distinct from the other performance obligations identified in an arrangement, the Company recognizes revenue

from the related nonrefundable upfront payments based on the relative standalone selling price prescribed to the license compared to

the total selling price of the arrangement.

The revenue is recognized when the license is transferred to the collaboration partners and

the collaboration partners are able to use and benefit from the license.

To date, the receipt of nonrefundable upfront fees was solely

for the compensation of past research efforts and contributions made by the Company before the collaborative agreements entered into

and it does not relate to any future obligations and commitments made between the Company and the collaboration partners in the collaborative

If a license to the Company’s intellectual property is determined

to be distinct from the other performance obligations identified in an arrangement, the Company recognizes revenue from the related nonrefundable

upfront payments based on the relative standalone selling price prescribed to the license compared to the total selling price of the arrangement.

The revenue is recognized when the license is transferred to the collaboration partners and the collaboration partners are able to use

and benefit from the license.

To date, the receipt of nonrefundable upfront fees was solely for the compensation of past research efforts

and contributions made by the Company before the collaborative agreements were entered into and does not relate to any future obligations

and commitments made between the Company and the collaboration partners in the collaborative agreements.

(ii) Milestone payments

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February and December of 2015, BioLite, Inc.

entered into a total of three joint venture

agreements with BioHopeKing to jointly develop ABV-1501 for Triple Negative Breast Cancer

(TNBC), ABV-1504 for MDD and ABV-1505 for ADHD.

entered into a total of three joint venture agreements with BioHopeKing to jointly develop

ABV-1501 for Triple Negative Breast Cancer (TNBC), ABV-1504 for MDD and ABV-1505 for ADHD.

The agreements granted marketing rights to

BioHopeKing for certain Asian countries in return for a series of milestone payments totaling

$10 million in cash and equity of BioHopeKing or equity securities owned by BioHopeKing.

BioHopeKing for certain Asian countries in return for a series of milestone payments totaling $10 million in cash and equity of BioHopeKing

or equity securities owned by BioHopeKing.

The milestone payments are determined by a schedule

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New Drug Application (NDA) Submission

December of 2015, BHK paid the initial cash payment of $1 million upon the execution of the

BHK Agreement.

The Company concluded that certain deliverables are considered separate units

of accounting as the delivered items have value to the customer on a standalone basis and

recognized this cash payment as collaboration revenue when all research, technical, and development

data was delivered to BHK in 2015.

The payment included compensation for past research efforts

and contributions made by BioLite Taiwan before the BHK agreement was signed and does not

relate to any future commitments made by BioLite Taiwan and BHK in the BHK Agreement.

August 2016, the Company received the second milestone payment of $1 million, and recognized

collaboration revenue for the year ended December 31, 2016.

As of March 31, 2022, the Company

had completed the phase II clinical trial for ABV-1504 MDD on October 31, 2019, but has not

yet completed the phase II clinical trial for ABV-1505 ADHD.

addition to the milestone payments, BioLite Taiwan is entitled to receive a royalty equal

to 12% of BHK’s net sales related to ABV-1501, ABV-1504 and ABV-1505 Products.

March 31, 2022, the Company has not earned royalties under the BHK Co-Development Agreement.

BHK Co-Development Agreement will remain in effect for fifteen years from the date of first

commercial sale of the Product in in Asia excluding Japan.

December of 2015, BHK paid the initial cash payment of $1 million upon the execution of the BHK Agreement.

The Company concluded that

certain deliverables are considered separate units of accounting as the delivered items have value to the customer on a standalone basis

and recognized this cash payment as collaboration revenue when all research, technical, and development data was delivered to BHK in

The payment included compensation for past research efforts and contributions made by BioLite Taiwan before the BHK agreement was

signed and does not relate to any future commitments made by BioLite Taiwan and BHK in the BHK Agreement.

August 2016, the Company received the second milestone payment of $1 million, and recognized collaboration revenue for the year ended

December 31, 2016.

As of June 30, 2022, the Company had completed the phase II clinical trial for ABV-1504 MDD on October 31, 2019, but

has not yet completed the phase II clinical trial for ABV-1505 ADHD.

addition to the milestone payments, BioLite Taiwan is entitled to receive a royalty equal to 12% of BHK’s net sales related to

ABV-1501, ABV-1504 and ABV-1505 Products.

As of June 30, 2022, the Company has not earned royalties under the BHK Co-Development Agreement.

BHK Co-Development Agreement will remain in effect for fifteen years from the date of first commercial sale of the Product in in Asia

excluding Japan.

Co-Development agreement with Rgene Corporation,

a related party

On May 26, 2017, the Company entered into a co-development

agreement (the “Rgene Agreement”) with Rgene Corporation (the “Rgene”), a related party under common control

by the controlling beneficiary shareholder of YuanGene Corporation and the Company (See Note 12).

Pursuant to the Rgene Agreement, BriVision

and Rgene agreed to co-develop and commercialize ABV-1507 HER2/neu Positive Breast Cancer Combination Therapy, ABV-1703 Pancreatic Cancer

Combination Therapy and ABV-1527 Ovary Cancer Combination Therapy.

Under the terms of the Rgene Agreement, Rgene is required to pay

the Company $3,000,000 in cash or stock of Rgene with equivalent value by August 15, 2017 as compensation of BriVision’s past research

efforts and contributions made by BriVision before the Rgene Agreement was executed.

The payment does not relate to any future milestones

attained by BriVision.

In addition to $3,000,000, the Company is entitled to receive 50% of the future net licensing income or net sales

profit earned by Rgene.

On May 26, 2017, the Company entered into a co-development agreement

(the “Rgene Agreement”) with Rgene Corporation (the “Rgene”), a related party under common control by the controlling

beneficial shareholder of YuanGene Corporation and the Company (See Note 12).

Pursuant to the Rgene Agreement, BriVision and Rgene agreed

to co-develop and commercialize ABV-1507 HER2/neu Positive Breast Cancer Combination Therapy, ABV-1703 Pancreatic Cancer Combination Therapy

and ABV-1527 Ovary Cancer Combination Therapy.

Under the terms of the Rgene Agreement, Rgene is required to pay the Company $3,000,000

in cash or stock of Rgene with equivalent value by August 15, 2017 as compensation of BriVision’s past research efforts and contributions

made by BriVision before the Rgene Agreement was executed.

The payment does not relate to any future milestones attained by BriVision.

In addition to $3,000,000, the Company is entitled to receive 50% of the future net licensing income or net sales profit earned by Rgene.

All development costs shall be equally shared by both BriVision and Rgene.

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of the Rgene Agreement remain in full force and effect.

On June 10, 2022, the Company expanded its co-development

partnership with Rgene.

On that date, BioKey, ABVC 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 the U.S.

FDA IND regulatory

requirements.

Under the terms of the new Services Agreement, BioKey is eligible to receive payments totaling $3.0 million over a 3-year

period with each payment amount to be determined by certain regulatory milestones obtained during the agreement period.

The Service Agreement

shall remain in effect until the expiration date of the last patent and automatically renew for 5 more years unless terminated earlier

by either party with six months written notice.

Either party may terminate the Service Agreement for cause by providing 30 days written

Collaborative agreement with BioFirst Corporation,

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during the year ended September 30, 2017.

On June 30, 2019, the Company entered into a

Stock Purchase Agreement (the “Purchase Agreement”) with BioFirst.

On June 30, 2019, the Company entered into a Stock

Purchase Agreement (the “Purchase Agreement”) with BioFirst.

Pursuant to the Purchase Agreement, the Company issued 428,571

428,571 shares of the Company’s common stock to BioFirst as payment for $3,000,000 owed by the Company to BioFirst in connection

with the BioFirst Agreement.

shares of the Company’s common stock to BioFirst as payment for $3,000,000 owed by the Company to BioFirst in connection with the

BioFirst Agreement.

On August 5, 2019, the Company entered into a

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as repayment in full for a loan in the amount of $2,902,911 provided to BriVision from BioFirst.

On November 4, 2020, the Company executed an

amendment to the BioFirst Agreement with BioFirst to add ABV-2001 Intraocular Irrigation Solution and ABV-2002 Corneal Storage Solution

to the agreement.

ABV-2002 is utilized during a corneal transplant procedure to replace a damaged or diseased cornea while ABV-2001 has

broader utilization during a variety of ocular procedures.

On November 4, 2020, the Company executed an amendment

to the BioFirst Agreement with BioFirst to add ABV-2001 Intraocular Irrigation Solution and ABV-2002 Corneal Storage Solution to the agreement.

ABV-2002 is utilized during a corneal transplant procedure to replace a damaged or diseased cornea while ABV-2001 has broader utilization

during a variety of ocular procedures.

Initially the Company will focus on ABV-2002,

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Early testing by BioFirst indicates that ABV-2002

may be more effective for protecting the cornea and retina during long-term storage than other storage media available today and can

be manufactured at lower cost.

may be more effective for protecting the cornea and retina during long-term storage than other storage media available today and can be

manufactured at lower cost.

Categorized as a lower risk Class I Medical Device, the Company intends to submit a Premarket Notification

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Co-Development agreement with BioLite Japan

On October 6, 2021 (the “ Completion

Date ”), the Company, Lucidaim Co., Ltd., a Japanese corporation (“ Lucidaim ,” together with the Company,

the “ Shareholders ”), and BioLite Japan K.K., a Japanese corporation (“ Biolite” ) entered into a

Joint Venture Agreement (the “ Agreement ”).

Biolite is a private limited company (a Japanese Kabushiki Kaisha )

incorporated on December 18, 2018 and at the date of the Agreement has 10,000 ordinary shares authorized, with 3,049 ordinary shares

issued and outstanding (the “ Ordinary Shares ”).

Immediately prior to the execution of the Agreement, Lucidaim owned

1,501 ordinary shares and the Company owned the 1,548 ordinary shares.

The Shareholders entered into the joint venture to formally reduce

to writing their desire to invest in and operate Biolite as a joint venture.

The business of the joint venture shall be the research

and development of drugs, medical device and digital media, investment, fund running and consulting, distribution and marketing of supplements

carried on by Biolite and its subsidiaries in Japan, or any other territory or businesses as may from time to time be agreed by an amendment

to the Agreement.

The closing of the transaction is conditioned upon the approval and receipt of all necessary government approvals,

which have been received.

On October 6, 2021 (the “ Completion Date ”),

the Company, Lucidaim Co., Ltd., a Japanese corporation (“ Lucidaim ,” together with the Company, the “ Shareholders ”),

and BioLite Japan K.K., a Japanese corporation (“ Biolite” ) entered into a Joint Venture Agreement (the “ Agreement ”).

Biolite is a private limited company (a Japanese Kabushiki Kaisha ) incorporated on December 18, 2018 and at the date of the

Agreement has 10,000 ordinary shares authorized, with 3,049 ordinary shares issued and outstanding (the “ Ordinary Shares ”).

Immediately prior to the execution of the Agreement, Lucidaim owned 1,501 ordinary shares and the Company owned the 1,548 ordinary shares.

The Shareholders entered into the joint venture to formally reduce to writing their desire to invest in and operate Biolite as a joint

The business of the joint venture shall be the research and development of drugs, medical device and digital media, investment,

fund running and consulting, distribution and marketing of supplements carried on by Biolite and its subsidiaries in Japan, or any other

territory or businesses as may from time to time be agreed by an amendment to the Agreement.

The closing of the transaction is conditioned

upon the approval and receipt of all necessary government approvals, which have been received.

Pursuant to the Agreement and the related share

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The aforementioned transactions occurred on the Completion

As per the Agreement, the Shareholders shall

supervise and manage the business and operations of Biolite.

The directors shall not be entitled to any renumeration for their services

as a director and each Shareholder can remove and replace the director he/she/it appointed.

If a Shareholder sells or disposes of all

of its Ordinary Shares, the director such Shareholder appointed must tender his/her resignation.

The Agreement also sets forth certain

corporate actions that must be pre-approved by all Shareholders (the “ Reserved Matters ”).

If the Shareholders are

unable to make a decision on any Reserved Matter, then either Shareholder can submit a deadlock notice to the other shareholder, 5 days

after which they must refer the matter to each Shareholder’s chairman and use good faith to resolve the dispute.

If such dispute

is not resolved within 10 days thereafter, then either Shareholder can offer to buy all of the other Shareholder’s Ordinary Shares

for cash at a specified price;

As per the Agreement, the Shareholders shall supervise

and manage the business and operations of Biolite.

The directors shall not be entitled to any renumeration for their services as a director

and each Shareholder can remove and replace the director he/she/it appointed.

If a Shareholder sells or disposes of all of its Ordinary

Shares, the director such Shareholder appointed must tender his/her resignation.

The Agreement also sets forth certain corporate actions

that must be pre-approved by all Shareholders (the “ Reserved Matters ”).

If the Shareholders are unable to make a decision

on any Reserved Matter, then either Shareholder can submit a deadlock notice to the other shareholder, 5 days after which they must refer

the matter to each Shareholder’s chairman and use good faith to resolve the dispute.

If such dispute is not resolved within 10 days

thereafter, then either Shareholder can offer to buy all of the other Shareholder’s Ordinary Shares for cash at a specified price;

if there is not affirmative acceptance of the sale, the sale shall proceed as set forth in the sale offer.

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Agreement, each Shareholder agrees to guarantee such bank facility if the bank requires a guarantee.

Accordingly, the Company may be

liable for the bank facility in an amount up to JPY 14,925,400 (approximately USD134,000), which represents 49% of the maximum bank facility.

The Agreement further provides that Biolite shall issue annual dividends at the rate of at least 1.5% of Biolite’s profits, if

it has sufficient cash to do so.

Accordingly, the Company may be liable

for the bank facility in an amount up to JPY 14,925,400 (approximately USD134,000), which represents 49% of the maximum bank facility.

The Agreement further provides that Biolite shall issue annual dividends at the rate of at least 1.5% of Biolite’s profits, if it

has sufficient cash to do so.

Pursuant to the Agreement, the Company and Biolite

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This was a related party transaction.

In November 2021, the Company received $4,244,452 in gross proceeds

from the exercise of warrants issued in the Company’s August 3, 2021, public offering of securities.

Investors exercised a total

of 673,405 Series A warrants at a price of $6.30 per share, and 200 Series B warrants at a price of $10 per share.

Agreement with

BioLite, Inc.

The Company entered

into a Collaborative Agreement with BioLite, Inc., a company incorporated under the laws of Taiwan, and a subsidiary of the Company,

(“BioLite”) on December 29, 2015, and then entered into two addendums to such agreement (as amended and revised, (the “Agreement”).

The majority shareholder of BioLite is one of the Company’s subsidiaries, the Company’s Chairman is a director of BioLite

Jiang, the Company’s Chief Strategy Officer and a director, is the Chairman of BioLite.

Pursuant to the Agreement,

the Company acquired the sole licensing rights to develop and commercialize for therapeutic purposes six compounds from BioLite.

In accordance

with the terms of the Agreement, the Company shall pay BioLite (i) milestone payments of up to $100 million in cash and equity of the

Company or equity securities owned by it at various stages on a schedule dictated by BioLite’s achievements of certain milestones,

as set forth in the Agreement (the “Milestone Payments”) and (ii) a royalty payment equal to 5% of net sales of the drug

products when ABV-1501 is approved for sale in the licensed territories.

If BioLite fails to reach any of the milestones in a timely

manner, it may not receive the rest of the payments from the Company.

According to the Agreement, after Phase II clinical trials are

completed, 15% of the Milestone Payment becomes due and shall be paid in two stages:

(i) 5% no later than December 31, 2021 (the “December

2021 Payment”) and (ii) 10% no later than December 31, 2022.

On February 12, 2022, the Company’s Board of Directors determined

that the December 2021 Payment, which is equal to $5,000,000, shall be paid via the cancellation of certain outstanding debt, in the

amount of $5,000,000, that BioLite owes the Company as of December 31, 2021.

On February 22, 2022, the parties entered into an amendment

to the Agreement allowing the Company to make all payments due under the Agreement via the forgiveness of debt, in equal value, owed

by BioLite to the Company.

This was a related party

transaction and was conducted at arm’s length.

In addition to the Company’s board of directors approving the modification

of terms of the Agreement, the Company’s audit committee approved them too.

The Board believes it is in the Company’s best

interest to cancel outstanding debt and apply it to the December 2021 Payment.

Following such approval,

the Company and BioLite entered into an amendment to the Agreement reflecting the modified payment method.

In November 2021, the Company received $4,244,452

in gross proceeds from the exercise of warrants issued in the Company’s August 3, 2021, public offering of securities.

exercised a total of 673,405 Series A warrants at a price of $6.30 per share, and 200 Series B warrants at a price of $10 per share.

Agreement with BioLite, Inc.

The Company entered into a Collaborative Agreement

with BioLite, Inc., a company incorporated under the laws of Taiwan, and a subsidiary of the Company, (“BioLite”) on December

29, 2015, and then entered into two addendums to such agreement (as amended and revised, (the “Agreement”).

The majority shareholder

of BioLite is one of the Company’s subsidiaries, the Company’s Chairman is a director of BioLite and Dr.

Jiang, the Company’s

Chief Strategy Officer and a director, is the Chairman of BioLite.

Pursuant to the Agreement, the Company acquired

the sole licensing rights to develop and commercialize for therapeutic purposes six compounds from BioLite.

In accordance with the terms

of the Agreement, the Company shall pay BioLite (i) milestone payments of up to $100 million in cash and equity of the Company or equity

securities owned by it at various stages on a schedule dictated by BioLite’s achievements of certain milestones, as set forth in

the Agreement (the “Milestone Payments”) and (ii) a royalty payment equal to 5% of net sales of the drug products when ABV-1501

is approved for sale in the licensed territories.

If BioLite fails to reach any of the milestones in a timely manner, it may not receive

the rest of the payments from the Company.

According to the Agreement, after Phase II clinical trials are completed, 15% of the Milestone

Payment becomes due and shall be paid in two stages:

(i) 5% no later than December 31, 2021 (the “December 2021 Payment”)

and (ii) 10% no later than December 31, 2022.

On February 12, 2022, the Company’s Board of Directors determined that the December

2021 Payment, which is equal to $5,000,000, shall be paid via the cancellation of certain outstanding debt, in the amount of $5,000,000,

that BioLite owes the Company as of December 31, 2021.

On February 22, 2022, the parties entered into an amendment to the Agreement allowing

the Company to make all payments due under the Agreement via the forgiveness of debt, in equal value, owed by BioLite to the Company.

This was a related party transaction and was conducted

at arm’s length.

In addition to the Company’s board of directors approving the modification of terms of the Agreement, the

Company’s audit committee approved them too.

The Board believes it is in the Company’s best interest to cancel outstanding

debt and apply it to the December 2021 Payment.

Following such approval, the Company and BioLite

entered into an amendment to the Agreement reflecting the modified payment method.

BioKey Revenues

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In addition, BioKey provides a variety of regulatory

services tailored to the needs of its customers, which include proofreading and regulatory review of submission documents related to

formulation development, clinical trials, marketed products, generics, nutraceuticals and OTC products and training presentations.

addition to supporting ABVC’s new drug development, BioKey submits INDs, NDAs, ANDAs, and DMFs to the FDA, on ABVC’s behalf

in compliance with new electronic submission guidelines of the FDA.

services tailored to the needs of its customers, which include proofreading and regulatory review of submission documents related to formulation

development, clinical trials, marketed products, generics, nutraceuticals and OTC products and training presentations.

In addition to

supporting ABVC’s new drug development, BioKey submits INDs, NDAs, ANDAs, and DMFs to the FDA, on ABVC’s behalf in compliance

with new electronic submission guidelines of the FDA.

Impact of COVID-19 Outbreak

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to be a pandemic.

Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, and quarantines

Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, quarantines

in certain areas, and forced closures for certain types of public places and businesses.

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possible to ensure the safety of our employees.

Due to the COVID-19 pandemic, our revenue for

Due to the COVID-19 pandemic, our revenues for

the fiscal 2020 and 2021 were significantly impacted.

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and we observed that demand in those labs fell well below historic levels.

As constraints on social distancing were gradually lifted

around the world recently, labs have been able to increase research activity.

While we believe that underlying demand is still not yet

at pre-COVID-19 levels since lab operations remain below their normal capacity, we are hopeful that the vaccination programs

that are underway combined with policy changes planned for the summer will further increase research activity and support a return to pre-COVID-19 demand

levels worldwide.

The global pandemic of COVID-19 continues to

evolve rapidly, and we will continue to monitor the situation closely, including its potential effect on our plans and timelines.

Additionally, it is reasonably possible that

estimates made in the financial statements have been, or will be, materially and adversely impacted in the near term as a result of these

conditions, including losses on inventory;

As constraints on social distancing were gradually lifted around

the world recently, labs have been able to increase research activity.

While we believe that underlying demand is still not yet at pre-COVID-19 levels

since lab operations remain below their normal capacity, we are hopeful that the vaccination programs that are underway combined with

policy changes planned for the summer will further increase research activity and support a return to pre-COVID-19 demand levels

The global pandemic of COVID-19 continues to evolve

rapidly, and we will continue to monitor the situation closely, including its potential effect on our plans and timelines.

Additionally, it is reasonably possible that estimates

made in the financial statements have been, or will be, materially and adversely impacted in the near term as a result of these conditions,

including losses on inventory;

impairment losses related to goodwill and other long-lived assets and current obligations.

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The Company’s financial statements are expressed in U.S.

The Company changed its fiscal year from the

period beginning on October 1st and ending on September 30th to the period beginning on January 1st and ending on December 31st, beginning

January 1, 2018.

All references herein to a fiscal year prior to December 31, 2017 refer to the twelve months ended September 30th of

The Company changed its fiscal year from the period

beginning on October 1st and ending on September 30th to the period beginning on January 1st and ending on December 31st, beginning January

All references herein to a fiscal year prior to December 31, 2017 refer to the twelve months ended September 30th of such year.

Use of Estimates

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Forward Stock Split

On March 21, 2016, the Board of Directors of

the Company approved an amendment to Articles of Incorporation to effect a forward split at a ratio of 1 to 3.141 and increase the number

On March 21, 2016, the Board of Directors of the

Company approved an amendment to Articles of Incorporation to implement a forward split at a ratio of 1 to 3.141 and increase the number

of our authorized shares of Common Stock, par value $0.001 per share, to 360,000,000, which was effective on April 8, 2016.

Stock Reverse Split

On March 12, 2019, the Board of Directors of

the Company by unanimous written consent in lieu of a meeting approved to i) effect a stock reverse split at the ratio of 1-for-18 (the

“Reverse Split”) of both the authorized common stock of the Company (the “Common Stock”) and the issued and outstanding

Common Stock and ii) to amend the articles of incorporation of the Company to reflect the Reverse Split.

The Board approved and authorized

the Reverse Split without obtaining approval of the Company’s shareholders pursuant to Section 78.207 of Nevada Revised Statutes.

On May 3, 2019, the Company filed a certificate of amendment to the Company’s articles of incorporation (the “Amendment”)

On March 12, 2019, the Board of Directors of the

Company by unanimous written consent in lieu of a meeting approved to i) effect a stock reverse split at the ratio of 1-for-18 (the “Reverse

Split”) of both the authorized common stock of the Company (the “Common Stock”) and the issued and outstanding Common

Stock and ii) to amend the articles of incorporation of the Company to reflect the Reverse Split.

The Board approved and authorized the

Reverse Split without obtaining approval of the Company’s shareholders pursuant to Section 78.207 of Nevada Revised Statutes.

May 3, 2019, the Company filed a certificate of amendment to the Company’s articles of incorporation (the “Amendment”)

to effect the Reverse Split with the Secretary of State of Nevada.

The Financial Industry Regulatory Authority (“FINRA”)

informed the Company that the Reverse Split was effective on May 8, 2019.

All shares and related financial information in this Form 10-Q

reflect this 1-for-18 reverse stock split.

The Financial Industry Regulatory Authority (“FINRA”) informed

the Company that the Reverse Split was effective on May 8, 2019.

All shares and related financial information in this Form 10-Q reflect

this 1-for-18 reverse stock split.

Fair Value Measurements

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the use of unobservable inputs by requiring that observable inputs be used when available.

Observable inputs are inputs that reflect

the assumptions market participants would use in pricing the assets or liabilities based on market data obtained from sources independent

Observable inputs are inputs that reflect the

assumptions market participants would use in pricing the assets or liabilities based on market data obtained from sources independent

of the Company.

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The carrying value of the Company’s short-term bank loan, convertible notes payable, and accrued interest

approximates their fair value as the terms of the borrowing are consistent with current market rates and the duration to maturity is

The carrying value of the Company’s long-term bank loan approximates fair value because the interest rates approximate market

rates that the Company could obtain for debt with similar terms and maturities.

approximates their fair value as the terms of the borrowing are consistent with current market rates and the duration to maturity is short.

The carrying value of the Company’s long-term bank loan approximates fair value because the interest rates approximate market rates

that the Company could obtain for debt with similar terms and maturities.

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 March 31, 2022 and December 31, 2021, the Company’s cash and

cash equivalents amounted $2,717,936 and $5,828,548, respectively.

Some of the Company’s cash deposits are held in financial institutions

located in Taiwan where there is currently regulation mandated on obligatory insurance of bank accounts.

The Company believes this financial

institution is of high credit quality.

The Company considers highly liquid investments

with maturities of three months or less, when purchased, to be cash equivalents.

As of June 30, 2022 and December 31, 2021, the Company’s

cash and cash equivalents amounted $2,910,613 and $5,828,548, respectively.

Some of the Company’s cash deposits are held in financial

institutions located in Taiwan where there is currently regulation mandated on obligatory insurance of bank accounts.

The Company believes

this financial institution is of high credit quality.

Restricted Cash Equivalents

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of cash held in a reserve bank account in Taiwan.

As of March 31, 2022 and December 31, 2021, the Company’s restricted cash equivalents

As of June 30, 2022 and December 31, 2021, the Company’s restricted cash equivalents

amounted $688,633 and $736,667, respectively.

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to receive in exchange for those goods or services.

To determine revenue recognition for arrangements that the Company determines is

within the scope of ASC 606, the Company performs the following five steps:

To determine revenue recognition for arrangements that the Company determines is within

the scope of ASC 606, the Company performs the following five steps:

(i) identify the contract(s) with a customer;

(ii) identify

the performance obligations in the contract;

(iii) determine the transaction price;

(iv) allocate the transaction price to the performance

(ii) identify the performance

obligations in the contract;

(iii) determine the transaction price;

(iv) allocate the transaction price to the performance obligations

in the contract;

and (v) recognize revenue when (or as) the Company satisfies a performance obligation.

The Company only

applies the five-step model to contracts when it is probable that the Company will collect the consideration the Company is entitled

to in exchange for the goods or services the Company transfers to the customers.

At inception of the contract, once the contract is determined

to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract, determines those that are

performance obligations, and assesses whether each promised good or service is distinct.

The Company then recognizes as revenue the amount

of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

The Company only applies the five-step

model to contracts when it is probable that the Company will collect the consideration the Company is entitled to in exchange for the

goods or services the Company transfers to the customers.

At inception of the contract, once the contract is determined to be within the

scope of ASC 606, the Company assesses the goods or services promised within each contract, determines those that are performance obligations,

and assesses whether each promised good or service is distinct.

The Company then recognizes as revenue the amount of the transaction price

that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

Property and Equipment

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Estimated Life

Buildings and

leasehold improvements

Buildings and leasehold improvements

Machinery and equipment

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Impairment of Long-Lived Assets

The Company has adopted Accounting Standards

Codification subtopic 360-10, Property, Plant and Equipment (“ASC 360-10”).

ASC 360-10 requires that long-lived assets and

certain identifiable intangibles held and used by the Company be reviewed for impairment whenever events or changes in circumstances

indicate that the carrying amount of an asset may not be recoverable.

The Company evaluates its long-lived assets for impairment annually

or more often if events and circumstances warrant.

Events relating to recoverability may include significant unfavorable changes in business

conditions, recurring losses, or a forecasted inability to achieve break-even operating results over an extended period.

Should impairment

in value be indicated, the carrying value of intangible assets will be adjusted, based on estimates of future discounted cash flows resulting

from the use and ultimate disposition of the asset.

ASC 360-10 also requires assets to be disposed of be reported at the lower of the

carrying amount or the fair value less costs to sell.

The Company has adopted Accounting Standards Codification

subtopic 360-10, Property, Plant and Equipment (“ASC 360-10”).

ASC 360-10 requires that long-lived assets and certain identifiable

intangibles held and used by the Company be reviewed for impairment whenever events or changes in circumstances indicate that the carrying

amount of an asset may not be recoverable.

The Company evaluates its long-lived assets for impairment annually or more often if events

and circumstances warrant.

Events relating to recoverability may include significant unfavorable changes in business conditions, recurring

losses, or a forecasted inability to achieve break-even operating results over an extended period.

Should impairment in value be indicated,

the carrying value of intangible assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and

ultimate disposition of the asset.

ASC 360-10 also requires assets to be disposed of be reported at the lower of the carrying amount or

the fair value less costs to sell.

Long-term Equity Investment

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promote business and strategic objectives.

The Company accounts for non-marketable equity and other equity investments for which the

Company does not have control over the investees as:

The Company accounts for non-marketable equity and other equity investments for which the Company

does not have control over the investees as:

method investments when the Company has the ability to exercise significant influence, but not control, over the investee.

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cost method investments when the equity method does not apply.

Significant judgment is required to identify

whether an impairment exists in the valuation of the Company’s non-marketable equity investments, and therefore the Company considers

this a critical accounting estimate.

Its yearly analysis considers both qualitative and quantitative factors that may have a significant

impact on the investee’s fair value.

Qualitative analysis of its investments involves understanding the financial performance and

near-term prospects of the investee, changes in general market conditions in the investee’s industry or geographic area, and the

management and governance structure of the investee.

Quantitative assessments of the fair value of its investments are developed using

the market and income approaches.

The market approach includes the use of comparable financial metrics of private and public companies

and recent financing rounds.

The income approach includes the use of a discounted cash flow model, which requires significant estimates

regarding the investees’ revenue, costs, and discount rates.

The Company’s assessment of these factors in determining whether

an impairment exists could change in the future due to new developments or changes in applied assumptions.

Significant judgment is required to identify whether

an impairment exists in the valuation of the Company’s non-marketable equity investments, and therefore the Company considers this

a critical accounting estimate.

Its yearly analysis considers both qualitative and quantitative factors that may have a significant impact

on the investee’s fair value.

Qualitative analysis of its investments involves understanding the financial performance and near-term

prospects of the investee, changes in general market conditions in the investee’s industry or geographic area, and the management

and governance structure of the investee.

Quantitative assessments of the fair value of its investments are developed using the market

and income approaches.

The market approach includes the use of comparable financial metrics of private and public companies and recent

financing rounds.

The income approach includes the use of a discounted cash flow model, which requires significant estimates regarding

the investees’ revenue, costs, and discount rates.

The Company’s assessment of these factors in determining whether an impairment

exists could change in the future due to new developments or changes in applied assumptions.

Other-Than-Temporary Impairment

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equity method investments in gains (losses) on equity investments.

● Non-marketable

equity investments based on the Company’s assessment of the severity and duration of the impairment, and qualitative and quantitative

analysis of the operating performance of the investee;

Non-marketable equity investments based on the Company’s assessment of the severity and duration of the impairment, and qualitative and quantitative analysis of the operating performance of the investee;

adverse changes in market conditions and the regulatory or economic environment;

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additional funding requirements;

and the investee’s ability to remain

A series of operating losses of an investee or other factors may indicate that a decrease in value of the investment has

occurred that is other than temporary and that shall be recognized even though the decrease in value is in excess of what would otherwise

be recognized by application of the equity method.

and the investee’s ability to remain in business.

A series of operating losses of an investee or other factors may indicate that a decrease in value of the investment has occurred that is other than temporary and that shall be recognized even though the decrease in value is in excess of what would otherwise be recognized by application of the equity method.

A loss in value of an investment that is other than a temporary decline shall be recognized.

Evidence of a loss in value might include, but would not necessarily be limited to, absence of an ability to recover the carrying amount

of the investment or inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment.

The Company records other-than-temporary impairments for non-marketable cost method investments and equity method investments in gains

(losses) on equity investments.

Other-than-temporary impairments of equity investments were $0 and $0 for the year ended December 31,

2021 and 2020, respectively.

Evidence of a loss in value might include, but would not necessarily be limited to, absence of an ability to recover the carrying amount of the investment or inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment.

The Company records other-than-temporary impairments for non-marketable cost method investments and equity method investments in gains (losses) on equity investments.

Other-than-temporary impairments of equity investments were $0 for the three and six months ended June 30, 2022 and 2021, respectively .

The Company evaluates goodwill for impairment

annually or more frequently when an event occurs or circumstances change that indicate the carrying value may not be recoverable.

testing goodwill for impairment, the Company may elect to utilize a qualitative assessment to evaluate whether it is more likely than

not that the fair value of a reporting unit is less than its carrying amount.

goodwill for impairment, the Company may elect to utilize a qualitative assessment to evaluate whether it is more likely than not that

the fair value of a reporting unit is less than its carrying amount.

If the qualitative assessment indicates that goodwill impairment

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The Company estimates the fair value of the reporting units using discounted cash flows.

Forecasts of future cash flows are based on

our best estimate of future net sales and operating expenses, based primarily on expected category expansion, pricing, market segment

share, and general economic conditions.

The Company completed the required testing of goodwill for impairment

as of March 31, 2022, and determined that goodwill was impaired because of the current financial condition of the Company and the Company’s

inability to generate future operating income without substantial sales volume increases, which are highly uncertain.

Furthermore, the

Company anticipates future cash flows indicate that the recoverability of goodwill is not reasonably assured.

Forecasts of future cash flows are based on our

best estimate of future net sales and operating expenses, based primarily on expected category expansion, pricing, market segment share,

and general economic conditions.

The Company completed the required testing of

goodwill for impairment as of June 30, 2022, and determined that goodwill was impaired because of the current financial condition of the

Company and the Company’s inability to generate future operating income without substantial sales volume increases, which are highly

Furthermore, the Company anticipates future cash flows indicate that the recoverability of goodwill is not reasonably assured.

Research and Development Expenses

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costs for both clinical and preclinical materials, research costs, and other consulting services.

Non-refundable advance payment for

goods and services that will be used in future research and development activities are expensed when the activity has been performed

or when the goods have been received rather than when the payment is made.

In instances where the Company enters into agreements with

third parties to provide research and development services, costs are expensed as services are performed.

Non-refundable advance payment for goods

and services that will be used in future research and development activities are expensed when the activity has been performed or when

the goods have been received rather than when the payment is made.

In instances where the Company enters into agreements with third parties

to provide research and development services, costs are expensed as services are performed.

Post-retirement and post-employment benefits

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The total amounts for such employee

benefits, which were expensed as incurred, were $3,337 and $2,503 for the three months ended March 31, 2022 and 2021, respectively.

than the above, the Company does not provide any other post-retirement or post-employment benefits.

benefits, which were expensed as incurred, were $3,309 and $2,859 for the three months ended June 30, 2022 and 2021, respectively.

total amounts for such employee benefits, which were expensed as incurred, were $6,646 and $5,362 for the six months ended June 30, 2022

and 2021, respectively.

Other than the above, the Company does not provide any other post-retirement or post-employment benefits.

Stock-based Compensation

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on a straight-line basis over the requisite service period in accordance with FASB ASC Topic 718 “Compensation-Stock Compensation”.

Total employee stock-based compensation expenses were $0 and $0 for the three months ended March 31, 2022 and 2021.

Total employee stock-based compensation expenses were $0 for the three and six months ended June 30, 2022 and 2021.

The Company accounted for stock-based compensation

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earlier of the performance commitment date or the date service is completed and recognized over the period the service is provided.

non-employee stock-based compensation expenses were $4,692,003 and $225,740 for the three months ended March 31, 2022 and 2021, respectively.

non-employee stock-based compensation expenses were $225,740 and $475,740 for the three months ended June 30, 2022 and 2021, respectively.

Total non-employee stock-based compensation expenses were $4,917,743 and $701,480 for the six months ended June 30, 2022 and 2021, respectively.

Beneficial Conversion Feature

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differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax

A valuation allowance is provided for deferred tax assets if it is more likely than not these items will expire before the

Company is able to realize their benefits, or future deductibility is uncertain.

A valuation allowance is provided for deferred tax assets if it is more likely than not these items will expire before the Company

is able to realize their benefits, or future deductibility is uncertain.

Under ASC 740, a tax position is recognized as

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No significant penalty or interest relating to income taxes has been incurred

for the three months ended March 31, 2022 and 2021.

for the six months ended June 30, 2022 and 2021.

GAAP also provides guidance on de-recognition, classification, interest and penalties,

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period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740.

In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Act for which the accounting under

ASC 740 is complete.

To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but

it is able to determine a reasonable estimate, it must record a provisional estimate to be included in the financial statements.

company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the

basis of the provision of the tax laws that were in effect immediately before the enactment of the Tax Act.

While the Company is able

to make reasonable estimates of the impact of the reduction in corporate rate and the deemed repatriation transition tax, the final impact

of the Tax Act may differ from these estimates, due to, among other things, changes in our interpretations and assumptions, additional

guidance that may be issued by the I.R.S., and actions the Company may take.

The Company is continuing to gather additional information

to determine the final impact.

In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Act for which the accounting under ASC

740 is complete.

To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is

able to determine a reasonable estimate, it must record a provisional estimate to be included in the financial statements.

cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of

the provision of the tax laws that were in effect immediately before the enactment of the Tax Act.

While the Company is able to make reasonable

estimates of the impact of the reduction in corporate rate and the deemed repatriation transition tax, the final impact of the Tax Act

may differ from these estimates, due to, among other things, changes in our interpretations and assumptions, additional guidance that

may be issued by the I.R.S., and actions the Company may take.

The Company is continuing to gather additional information to determine

the final impact.

Valuation of Deferred Tax Assets

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the jurisdiction in which the valuation allowance was recorded, it may reverse a portion or all of the valuation allowance in that jurisdiction.

In such situations, the adjustment made to the deferred tax asset would have a favorable impact on its effective income tax rate and

results in the period such determination was made.

In such situations, the adjustment made to the deferred tax asset would have a favorable impact on its effective income tax rate and results

in the period such determination was made.

Loss Per Share of Common Stock

The Company calculates net loss per share in

accordance with ASC Topic 260, “Earnings per Share”.

Basic loss per share is computed by dividing the net loss by the weighted

average number of common shares outstanding during the period.

Diluted loss per share is computed similar to basic loss per share except

that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential

common stock equivalents had been issued and if the additional common shares were dilutive.

The Company calculates net loss per share in accordance

with ASC Topic 260, “Earnings per Share”.

Basic loss per share is computed by dividing the net loss by the weighted average

number of common shares outstanding during the period.

Diluted loss per share is computed similar to basic loss per share except that

the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common

stock equivalents had been issued and if the additional common shares were dilutive.

Diluted earnings per share excludes all dilutive

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subtopic 20, in determining its accruals and disclosures with respect to loss contingencies.

Accordingly, estimated losses from loss

contingencies are accrued by a charge to income when information available before financial statements are issued or are available to

be issued indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial

statements and the amount of the loss can be reasonably estimated.

Accordingly, estimated losses from loss contingencies

are accrued by a charge to income when information available before financial statements are issued or are available to be issued indicates

that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statements and the amount

of the loss can be reasonably estimated.

Legal expenses associated with the contingency are expensed as incurred.

If a loss contingency is not probable or reasonably estimable, disclosure of the loss contingency is made in the financial statements

when it is at least reasonably possible that a material loss could be incurred.

If a loss contingency

is not probable or reasonably estimable, disclosure of the loss contingency is made in the financial statements when it is at least reasonably

possible that a material loss could be incurred.

Foreign-currency Transactions

For the Company’s subsidiaries in Taiwan,

the foreign-currency transactions are recorded in New Taiwan dollars (“NTD”) at the rates of exchange in effect when the

transactions occur.

Gains or losses resulting from the application of different foreign exchange rates when cash in foreign currency

is converted into New Taiwan dollars, or when foreign-currency receivables or payables are settled, are credited or charged to income

in the year of conversion or settlement.

On the balance sheet dates, the balances of foreign-currency assets and liabilities are restated

at the prevailing exchange rates and the resulting differences are charged to current income except for those foreign currencies denominated

investments in shares of stock where such differences are accounted for as translation adjustments under the Statements of Stockholders’

Equity (Deficit).

the foreign-currency transactions are recorded in New Taiwan dollars (“NTD”) at the rates of exchange in effect when the transactions

Gains or losses resulting from the application of different foreign exchange rates when cash in foreign currency is converted into

New Taiwan dollars, or when foreign-currency receivables or payables are settled, are credited or charged to income in the year of conversion

or settlement.

On the balance sheet dates, the balances of foreign-currency assets and liabilities are restated at the prevailing exchange

rates and the resulting differences are charged to current income except for those foreign currencies denominated investments in shares

of stock where such differences are accounted for as translation adjustments under the Statements of Stockholders’ Equity (Deficit).

Translation Adjustment

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Recent Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06,

Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own

Equity (Subtopic 815-40):

In August 2020, the FASB issued ASU 2020-06, Debt

— Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity

(Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”).

ASU 2020-06 simplifies the accounting for convertible debt by eliminating the beneficial conversion and cash conversion accounting models.

2020-06 simplifies the accounting for convertible debt by eliminating the beneficial conversion and cash conversion accounting models.

Upon adoption of ASU 2020-06, convertible debt, unless issued with a substantial premium or an embedded conversion feature that is not

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but no earlier than fiscal years beginning after December 15, 2020, and only if adopted as of the beginning of such fiscal year.

Company is currently evaluating the impact that the standard will have on its consolidated financial statements.

In May 2021, the FASB issued ASU 2021-04, Earnings

Per Share (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation — Stock Compensation (Topic

718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40):

Issuer’s Accounting for Certain

Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”).

ASU 2021-04 provides guidance

as to how an issuer should account for a modification of the terms or conditions or an exchange of a freestanding equity-classified written

call option (i.e., a warrant) that remains classified after modification or exchange as an exchange of the original instrument for a

new instrument.

An issuer should measure the effect of a modification or exchange as the difference between the fair value of the modified

or exchanged warrant and the fair value of that warrant immediately before modification or exchange and then apply a recognition model

that comprises four categories of transactions and the corresponding accounting treatment for each category (equity issuance, debt origination,

debt modification, and modifications unrelated to equity issuance and debt origination or modification).

ASU 2021-04 is effective for

all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

An entity should

apply the guidance provided in ASU 2021-04 prospectively to modifications or exchanges occurring on or after the effective date.

adoption is permitted for all entities, including adoption in an interim period.

If an entity elects to early adopt ASU 2021-04 in an

interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period.

is currently evaluating the impact that the standard will have on its consolidated financial statements.

In March 2022, the FASB issued ASU 2022-02, Troubled

Debt Restructurings and Vintage Disclosures.

This ASU eliminates the accounting guidance for troubled debt restructurings by creditors

that have adopted ASU 2016-13, Measurement of Credit Losses on Financial Instruments.

This ASU also enhances the disclosure requirements

for certain loan refinancing and restructurings by creditors when a borrower is experiencing financial difficulty.

In addition, the ASU

amends the guidance on vintage disclosures to require entities to disclose current period gross write-offs by year of origination for

financing receivables and net investments in leases within the scope of ASC 326-20.

The ASU is effective for annual periods beginning

after December 15, 2022, including interim periods within those fiscal years.

Adoption of the ASU would be applied prospectively.

adoption is also permitted, including adoption in an interim period.

The Company is currently evaluating the impact that the standard

will have on its consolidated financial statements.

Estimates and Assumptions

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Results of Operations — Three Months

Ended March 31, 2022 Compared to Three Months Ended March 31, 2021.

Ended June 30, 2022 Compared to Three Months Ended June 30, 2021.

The following table presents, for the three months

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Interest expense

Rent income – related parties

Operating sublease income

Operating sublease income – related parties

Gain/Loss on foreign exchange changes

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Other (expense) income

Government grant income

Total other income

Total other income (expense)

Loss before provision income tax

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We generated $312,860

and $263,150 in revenues for the three months ended March 31, 2022 and 2021, respectively.

The decrease in revenues was mainly due to

the impact of COVID-19 on our CDMO business sector.

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.

Our operating

expenses have increased by $4,727,835, or 312%, to $6,242,485 for the three months ended March 31, 2022 from $1,514,650 for the three

months ended March 31, 2021.

Such increase in operating expenses was mainly attributable to the increase in stock based compensation and

selling, general and administrative expenses by 4,489,746 which relates to costs in conjunction with our recent stock issuance, as well

as the increase in research and development expenses of $238,089 to continue developing our pipeline.

expenses have 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.

Such increase in operating expenses 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 pipeline, while being offset by the decrease in stock-based compensation by $250,000.

Other Income (Expense).

income was $44,239 and $6,398 for the three months ended March 31, 2022 and 2021, respectively.

The change was principally caused by the

increase in rental income and decrease in interest expense, as well as the loss on investment in equity securities and government

grant income which occurred in the three months ended March 31, 2021.

income was $17,076 for the three months ended June 30, 2022, compared to $(77,005) for the three months ended June 30, 2021.

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.

Interest income (expense), net, was $24,257 for

the three months ended March 31, 2022, compared to $(77,700) for the three months ended March 31, 2021.

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.

Government grant income totaled $0 for the three months ended March

31, 2022, compared to $124,400 for the three months ended March 31, 2021, which was recorded as receipt of the first round of PPP loan

As a result of the

above factors, our net loss was $6,087,615 for the three months ended March 31, 2022 compared to $1,195,323 for the three months ended

March 31, 2021, representing an increase of $4,892,292, or 409%.

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%.

Results of Operations — Six Months Ended

June 30, 2022 Compared to Six Months Ended June 30, 2021.

The following table presents, for the six months

indicated, our consolidated statements of operations information.

Cost of revenues

Operating expenses

Selling, general and administrative expenses

Research and development expenses

Stock-based compensation

Total operating expenses

Loss from operations

Other income (expense)

Interest income

Interest expense

Operating sublease income

Operating sublease income – related parties

Gain/Loss on foreign exchange changes

Gain/Loss on investment in equity securities

Other (expense) income

Government grant income

Total other income (expense)

Loss before provision income tax

Provision for income tax

Net loss attributable to noncontrolling interests

Net loss attributed to ABVC and subsidiaries

Foreign currency translation adjustment

Comprehensive Loss

$ (8,090,997 )

$ (2,699,350 )

Net loss per share:

Basic and diluted

Weighted average number of common shares outstanding:

Basic and diluted

generated $338,520 and $294,591 in revenues for the six months ended June 30, 2022 and 2021, respectively.

The increase in revenue was

mainly due to the clinical development service income from Rgene, a related party, which was partially offset by the decrease in CDMO

Operating Expenses.

Our operating

expenses have increased by $5,012,878, or 140%, to $8,593,838 for the six months ended June 30, 2022 from $3,580,960 for the six months

ended June 30, 2021.

Such increase in operating expenses was mainly attributable to the increase in stock-based compensation and selling,

general and administrative expenses by $4,600,885 which relates to costs in conjunction with our recent stock issuance, as well as the

increase in research and development expenses of $411,993 to continue developing our pipeline.

Other Income (Expense) .

income (expense), net was $61,315 for the six months ended June 30, 2022, compared to $(70,607) for the six months ended June 30, 2021.

The change was principally caused by the decrease in interest expense, as well as the loss on investment in equity securities and

government grant income which occurred in the six months ended June 30, 2021.

Interest income (expense), net, was $46,219 for

the six months ended June 30, 2022, compared to $(149,649) for the six months ended June 30, 2021.

The increase of $195,868, or approximately

131%, was primarily due to the repayment of convertible notes payable during the year ended 2021.

Government grant income totaled $0 for the six

months ended June 30, 2022, compared to $124,400 for the six months ended June 30, 2021, which was recorded as receipt of the first round

of PPP loan forgiveness.

As a result of the

above factors, our net loss was $8,034,948 for the six months ended June 30, 2022 compared to $3,248,279 for the six months ended June

30, 2021, representing an increase of $4,786,669, or 147%.

Liquidity and Capital Resources

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Cash Flow from Operating Activities

During the three months ended March 31, 2022 and 2021, the net cash

used in operating activities were $2,994,257 and $1,413,074, respectively.

During the six months ended June 30, 2022 and 2021, the net cash used

in operating activities were $6,423,618 and $2,857,078, respectively.

The increase in the amount used in operating activities of $3,566,540

$1,581,183 was primarily due to the increased amount due from related parties and non-cash stock based compensation for nonemployees,

and decreased accounts receivables, accrued expenses and other current liabilities, non-cash government grant income and increase in net

loss during the three months ended March 31, 2022.

was primarily due to the increased amount due from related parties, prepaid expenses and deposits and non-cash stock-based compensation

for nonemployees, and decreased accrued expenses and other current liabilities, investment loss, non-cash government grant income and

increase in net loss during the six months ended June 30, 2022.

Cash Flow from Investing Activities

During the three months ended March 31, 2022,

the net cash used in investing activities was $93,220, compared to the net cash used in investing activities of $281,952 for the three

months ended March 31, 2021.

The decrease was due to the prepayment for equity investment during the three months ended March 31,

During the six months ended June 30, 2022 and 2021, the net cash used

in investing activities were $115,246 and $421,974 respectively.

The decreases were mainly due to the prepayment for equity investment

during the six months ended June 30, 2021.

Cash Flow from Financing Activities

During the three months ended March 31, 2022,

the net cash provided by financing activities was $0, while the net cash provided by the three months ended March 31, 2021 was $42,226,

respectively.

The decrease in net cash provided by financing activities was primarily because there were no proceeds from and repayment

of any loans or convertible notes during the three months ended March 31, 2022.

During the six months ended June 30, 2022 and 2021, the net cash provided

by (used in) financing activities were $3,663,925 and $(74,734), respectively.

The increase in net cash provided by financing activities

was primarily due to the issuance of common stock, while there were no proceeds from and repayment of any loans or convertible notes during

the six months ended June 30, 2022.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis