What changed in this filing

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Item 1. Financial Statements

2022-11-14 compared with 2022-08-15 · 1340 added, 1122 removed, 952 unchanged (72% of the section changed)

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ABVC BIOPHARMA, INC.

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

September 30,

Current Assets

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Accounts receivable – related parties, net

Due from related parties

Due from related party – current

Inventory, net

Short-term Investment

Prepayment for long-term investments

Prepaid expense and other current assets

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Security deposits

Prepayment for long-term investments

Due from related parties – noncurrent

LIABILITIES AND EQUITY

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Short-term bank loans

Accounts payable

Accrued expenses and other current liabilities

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Total Liabilities

COMMITMENTS AND CONTINGENCIES

Preferred stock, $ 0.001 par value, 20,000,000 authorized, nil shares issued and outstanding

Common stock, $ 0.001 par value, 100,000,000 authorized, 32,307,329 and 28,926,322 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively

Common stock, $ 0.001 par value, 100,000,000 authorized, 32,632,329 and 28,926,322 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively

Additional paid-in capital

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Total Liabilities and Equity

The accompanying notes are an integral part

of these consolidated financial statements.

The accompanying notes

are an integral part of these unaudited consolidated financial statements.

ABVC BIOPHARMA, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Cost of revenues

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The accompanying notes are an integral part

of these consolidated financial statements.

of these unaudited consolidated financial statements.

ABVC BIOPHARMA, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities

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Government grant income

Provision for doubtful accounts

Other non-cash income and expenses

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Decrease (increase) in due from related parties

( 2,435,935 )

Increase (decrease) in inventory

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Purchase of equipment

Purchase of investment

Purchase of property, plant and equipment

Prepayment for equity investment

( 1,518,793 )

( 1,104,609 )

Net cash used in investing activities

( 1,638,396 )

( 1,232,812 )

Cash flows from financing activities

Issuance of common stock

Payment for offering costs

Proceeds from short-term loan

Repayment of convertible notes

Repayment of short-term loan

Repayment of notes payable

Proceeds from long-term loans

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( 4,595,068 )

( 3,344,367 )

Cash and cash equivalents and restricted cash

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The accompanying notes are an integral part

of these consolidated financial statements.

of these unaudited consolidated financial statements.

ABVC BIOPHARMA, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

EQUITY (DEFICIT)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30,

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2022 AND 2021

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( 9,100,000 )

$ ( 924,481 )

Comprehensive

at December 31, 2021

$ ( 2,257,400 )

$ ( 38,481,200 )

$ ( 9,100,000 )

of common shares for consulting service

based compensation

loss for the period

( 5,995,440 )

( 6,087,615 )

transaction adjustments

at March 31, 2022

( 2,031,660 )

( 44,476,640 )

( 9,100,000 )

of common shares for cash

of common shares for debt conversion

based compensation

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transaction adjustments

at June 30, 2022

at September 30, 2021

$ ( 2,483,140 )

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$ ( 1,004,237 )

Treasury Stock

Comprehensive

Balance at December 31, 2021

Issuance of common shares for consulting service

Stock based compensation

Net loss for the period

Cumulative transaction adjustments

Balance at March 31, 2022

Issuance of common shares for cash

Stock based compensation

Net loss for the period

Cumulative transaction adjustments

Balance at June 30, 2022

Issuance of common shares for consulting service

Stock based compensation

Net loss for the period

Cumulative transaction adjustments

Balance at September 30, 2022

The accompanying notes are an integral part

of these consolidated financial statements.

of these unaudited consolidated financial statements.

ABVC BIOPHARMA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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Cancer Center (“MSKCC”) and MD Anderson Cancer Center.

BriVision had no predecessor operations prior to its formation on July

The Company’s shareholders approved an amendment

to the Company’s Articles of Incorporation to change the Company’s corporate name from American BriVision (Holding) Corporation

to ABVC BioPharma, Inc.

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

(the “Annual Meeting”).

The name change amendment to the Company’s Articles of Incorporation was filed with Nevada’s

Secretary of State and became effective on March 8, 2021 and FINRA processed our request to change our name on April 30, 2021, which became

effective as of May 3, 2021.

BriVision had no predecessor operations prior to its formation on

July 21, 2015.

The Company’s shareholders approved an

amendment to the Company’s Articles of Incorporation to change the Company’s corporate name from American BriVision (Holding)

Corporation to ABVC BioPharma, Inc.

and approved and adopted the Certificate of Amendment to affect same at the 2020 annual meeting of

shareholders (the “Annual Meeting”).

The name change amendment to the Company’s Articles of Incorporation was filed

with Nevada’s Secretary of State and became effective on March 8, 2021 and FINRA processed our request to change our name on April

30, 2021, which became effective as of May 3, 2021.

The Company’s stock symbol remains ABVC.

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Common Stock.

Because of the exchange of the BriVision Stock for the Acquisition Stock (the “Share Exchange”), BriVision had

become a wholly owned subsidiary (the “Subsidiary”) of the Company and there was a change of control of the Company following

Because of the exchange of the BriVision Stock for the Acquisition Stock (the “Share Exchange”), BriVision

had become a wholly owned subsidiary (the “Subsidiary”) of the Company and there was a change of control of the Company following

There were no warrants, options or other equity instruments issued in connection with the share exchange agreement.

Upon the consummation of the Share Exchange, BriVision

became a wholly owned subsidiary of the Company.

Upon the consummation of the Share Exchange,

BriVision became a wholly owned subsidiary of the Company.

Following the Share Exchange, the Company has

abandoned prior business plan and is now pursuing BriVision’s historically proposed businesses, which focus on the development of

new drugs and innovative medical devices to fulfill unmet medical needs.

The business model of the Company is to integrate research achievements

from world-famous institutions, conduct clinical trials of translational medicine for Proof of Concept (“POC”), out-license

to international pharmaceutical companies, and explore global markets.

abandoned prior business plan and is now pursuing BriVision’s historically proposed businesses, which focus on the development

of new drugs and innovative medical devices to fulfill unmet medical needs.

The business model of the Company is to integrate research

achievements from world-famous institutions, conduct clinical trials of translational medicine for Proof of Concept (“POC”),

out-license to international pharmaceutical companies, and explore global markets.

Accounting Treatment of the Reverse Merger

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for financial reporting purposes and the Company is the acquired company.

Consequently, the assets and liabilities and the operations

reflected in the historical financial statements prior to the Share Exchange will be those of BriVision and recorded at the

historical cost basis of BriVision.

In addition, the consolidated financial statements after completion of the Share Exchange will

include the assets and liabilities of the Company and BriVision, and the historical operations of BriVision and operations of

the Combined Company from the closing date of the Share Exchange.

Consequently, the assets and liabilities and the

operations reflected in the historical financial statements prior to the Share Exchange will be those of BriVision and recorded

at the historical cost basis of BriVision.

In addition, the consolidated financial statements after completion of the Share Exchange

will include the assets and liabilities of the Company and BriVision, and the historical operations of BriVision and operations

of the Combined Company from the closing date of the Share Exchange.

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

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referred to as the “Parties”) completed the business combination pursuant to the Agreement and Plan of Merger (the “Merger

Agreement”) dated as of January 31, 2018 where ABVC acquired BioLite and BioKey via issuing additional Common Stock of ABVC to the

shareholders of BioLite and BioKey.

Agreement”) dated as of January 31, 2018 where ABVC acquired BioLite and BioKey via issuing additional Common Stock of ABVC to

the shareholders of BioLite and BioKey.

Pursuant to the terms of the Merger Agreement,

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ABVC issued an aggregate of 104,558,777 shares

(prior to the reverse stock split in 2019) to the shareholders of both BioLite and BioKey under a registration statement on Form S-4 (file

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

(prior to the reverse stock split in 2019) to the shareholders of both BioLite and BioKey under a registration statement on Form S-4

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

BioLite Holding, Inc.

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BioLite BVI, Inc.

(the “BioLite BVI”), a wholly owned

subsidiary of BioLite Holding, was incorporated in the British Virgin Islands on September 13, 2016.

BioLite Holding and BioLite BVI are

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

(the “BioLite BVI”), a wholly

owned subsidiary of BioLite Holding, was incorporated in the British Virgin Islands on September 13, 2016.

BioLite Holding and BioLite

BVI are holding companies and have not carried out substantive business operations of their own.

BioLite, Inc., (the “BioLite Taiwan”)

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BioLite Share Purchase / Exchange Agreement have sold their equity in BioLite Taiwan and were using the proceeds from such sales to purchase

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

as they owned in the BioLite Taiwan.

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

Stock as they owned in the BioLite Taiwan.

Upon closing of the Share Purchase/ Exchange Agreement in August 2017, BioLite Holding ultimately

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Accounting Treatment of the Merger

The Company adopted ASC 805, “Business Combination”

to record the merger transactions of BioKey.

The Company adopted ASC 805, “Business

Combination” to record the merger transactions of BioKey.

Since the Company and BioLite Holding are the entities under Dr.

Tsung-Shann Jiang’s

common control, the transaction is accounted for as a restructuring transaction.

All the assets and liabilities of BioLite Holding,

BioLite BVI, and BioLite Taiwan were transferred to the Company at their respective carrying amounts on the closing date of the Merger.

The Company has recast prior period financial statements to reflect the conveyance of BioLite Holding’s common shares as if the

restructuring transaction had occurred as of the earliest date of the financial statements.

All material intercompany accounts, transactions,

and profits have been eliminated in consolidation.

The nature of and effects on earnings per share (EPS) of nonrecurring intra-entity

transactions involving long-term assets and liabilities is not required to be eliminated and EPS amounts have been recast to include the

earnings (or losses) of the transferred net assets.

Jiang’s common control, the transaction is accounted for as a restructuring transaction.

All the assets and liabilities of

BioLite Holding, BioLite BVI, and BioLite Taiwan were transferred to the Company at their respective carrying amounts on the closing

date of the Merger.

The Company has recast prior period financial statements to reflect the conveyance of BioLite Holding’s common

shares as if the restructuring transaction had occurred as of the earliest date of the financial statements.

All material intercompany

accounts, transactions, and profits have been eliminated in consolidation.

The nature of and effects on earnings per share (EPS) of nonrecurring

intra-entity transactions involving long-term assets and liabilities is not required to be eliminated and EPS amounts have been recast

to include the earnings (or losses) of the transferred net assets.

Going Concern

The accompanying unaudited financial statements have been prepared

in conformity with U.S.

GAAP which contemplates continuation of the Company on a going concern basis.

The going concern basis assumes

that assets are realized, and liabilities are settled in the ordinary course of business at amounts disclosed in the financial statements.

The Company’s ability to continue as a going concern depends upon its ability to market and sell its products to generate positive

operating cash flows.

For the nine months ended September 30, 2022, the Company reported net loss of $ 11,811,472 .

As of September 30,

2022, the Company’s working capital deficit was $ 991,230 .

In addition, the Company had net cash outflows of $ 6,937,322 from operating

activities for the nine months ended September 30, 2022.

These conditions give rise to substantial doubt as to whether the Company will

be able to continue as a going concern.

Management’s plan is to continue improve

operations to generate positive cash flows and raise additional capital through private of public offerings.

If the Company is not able

to generate positive operating cash flows, and raise additional capital, there is the risk that the Company may not be able to meet its

short-term obligations.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements

have been prepared in accordance with the generally accepted accounting principles in the United States of America (the “U.S.

The unaudited interim consolidated financial statements do not include

all the information and footnotes required by the U.S.

GAAP for complete financial statements.

Certain information and note disclosures

normally included in the annual financial statements prepared in accordance with the U.S.

GAAP have been condensed or omitted consistent

with Article 10 of Regulation S-X.

In the opinion of the Company’s management, the unaudited interim consolidated financial statements

have been prepared on the same basis as the audited financial statements and include all adjustments, in normal recurring nature, as necessary

for the fair statement of the Company’s financial position as of September 30, 2022, and results of operations and cash flows for

the nine months ended September 30, 2022 and 2021.

The unaudited interim consolidated balance sheet as of December 31, 2021 has been derived

from the audited financial statements at that date but does not include all the information and footnotes required by the U.S.

results of operations are not necessarily indicative of the results expected for the full fiscal year or for any future period.

financial statements should be read in conjunction with the audited consolidated financial statements as of and for the years ended December

31, 2021 and 2020, and related notes included in the Company’s audited consolidated financial statements.

The accompanying unaudited consolidated financial

statements have been prepared in accordance with the generally accepted accounting principles in the United States of America (the “U.S.

All significant intercompany transactions and account balances have been eliminated.

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of accrual accounting and consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred.

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

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

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

Reclassifications of Prior Year Presentation

Certain prior year unaudited consolidated balance

sheet and unaudited consolidated cash flow statement amounts have been reclassified for consistency with the current year presentation.

These reclassifications had no effect on the reported results of operations.

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

Use of Estimates

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with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that

affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated

financial statements and the amount of revenues and expenses during the reporting periods.

Actual results could differ materially from

those results.

affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the amount of revenues and expenses during the reporting periods.

Actual results could differ materially

from those results.

Inventory consists of raw materials, work-in-process,

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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 effect 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.

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.

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 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-K 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-K

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 inputs into three broad levels based on the reliability of the inputs as follows:

Level 1 - Inputs are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Valuation of these instruments does not require a high degree of judgment as the valuations are based on quoted prices in active markets that are readily and regularly available.

Level 2 - Inputs other than quoted prices in active markets that are either directly or indirectly observable as of the measurement date, such as quoted prices for similar assets or liabilities;

Level 1 - Inputs are quoted

prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Valuation of these instruments does not require a high degree of judgment as the valuations are based on quoted prices in active

markets that are readily and regularly available.

Level 2 - Inputs other

than quoted prices in active markets that are either directly or indirectly observable as of the measurement date, such as quoted

prices for similar assets or liabilities;

quoted prices in markets that are not active;

or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Valuations based on inputs that are unobservable and not corroborated by market data.

The fair value for such assets and liabilities is generally determined using pricing models, discounted cash flow methodologies, or similar techniques that incorporate the assumptions a market participant would use in pricing the asset or liability.

or other inputs that are observable or can

be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Valuations based

on inputs that are unobservable and not corroborated by market data.

The fair value for such assets and liabilities is generally

determined using pricing models, discounted cash flow methodologies, or similar techniques that incorporate the assumptions a market

participant would use in pricing the asset or liability.

The carrying values of certain assets and liabilities

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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 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.

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.

Cash and Cash Equivalents

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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.

believes this financial institution is of high credit quality.

As of September 30, 2022 and December 31, 2021, the

Company’s cash and cash equivalents amounted $ 1,323,543 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 June 30, 2022 and December 31, 2021, the Company’s restricted cash equivalents

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

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

equivalents amounted $ 646,604 and $ 736,667 , respectively.

Concentration of Credit Risk

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hedging, trading or speculative purposes.

We perform ongoing credit evaluation of our customers

and requires no collateral.

An allowance for doubtful accounts is provided based on a review of the collectability of accounts receivable.

We determine the amount of allowance for doubtful accounts by examining its historical collection experience and current trends in the

credit quality of its customers as well as its internal credit policies.

Actual credit losses may differ from our estimates .

Concentration of clients

As of September 30, 2022, the most major client,

specializes in developing and commercializing of dietary supplements and therapeutics in dietary supplement industry, accounted for 36.71%

of the Company’s total account receivable;

the second major client, GenePharm Inc., with its Chairman being the Board of Director

of Biokey, accounted for 27.44 % of the Company’s total account receivable;

the least major client, manufactures drugs in pharmaceutical

preparations in pharmaceutical industry, accounted for 22.98 % of the Company’s total accounts receivable.

For the nine months ended September 30, 2022,

one major client, Rgene Corporation, Shareholder of the Company which works in development and commercialization of new drugs in Taiwan,

accounted for 79.18 % of the Company's total revenues.

For the nine months ended September 30, 2021, two major clients, which develops

novel treatment for ocular Graft-versus-Host Disease, and manufacture drugs in pharmaceutical preparations, in pharmaceutical industry,

accounted for 39.61 % and 25.09 % of the Company's total revenues, respectively.

For the three months ended September 30, 2022,

three major clients, in biotech, agriculture and pharmaceutical industries, which commercialize dietary supplement products in Taiwan

and China, grow and develop Maitake dietary supplement products in Canada and the US, and develop novel treatment for ocular Graft-versus-Host

Disease, accounted for 47.84 %, 16.47 % and 15.6 % of the Company's total revenues, respectively.

For the three months ended September 30,

2021, two major clients, in pharmaceutical and agriculture industry, which develop novel treatment for ocular Graft-versus-Host Disease,

and grow and develop Maitake dietary supplement products in Canada and the US, accounted for 47.57 % and 14.43 % of the Company's total

revenues, respectively.

Concentration of vendors

For the nine months ended September 30, 2022, one vendor in dietary

supplement industry, who provides dietary supplement and manufacturing consultation, accounted for 40.5 % of the Company’s total

For the nine months ended September 30, 2021, three vendors, in research, chemical and monitoring and testing industry, who

provides life science product and service solution, manufacture and distribute fine chemicals and laboratory products, as well as distributing

manufacturers of data logging, data acquisition products, accounted for 29.7 %, 24.9 % and 24.7 % of the Company’s total purchases,

respectively.

For the three months ended September 30, 2022, one vendor in dietary

supplement industry, who provides dietary supplement and manufacturing consultation, accounted for 79.1 % of the Company’s total

For the three months ended September 30, 2021, two vendors, in pharmaceutical and scientific instrumentation industry, who provides

pharmaceutical and contract service, as well as manufacture analytical instrumentation, accounted for 89.1 % and 10.9 % of the Company’s

total purchases, respectively.

Revenue Recognition

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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;

(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;

(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.

The following are examples of when the Company

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of these agreements typically include payment to the Company related to one or more of the following:

non-refundable upfront license fees,

development and commercial milestones, partial or complete reimbursement of research and development costs, and royalties on net sales

of licensed products.

Each type of payments results in collaborative revenues except for revenues from royalties on net sales of licensed

products, which are classified as royalty revenues.

non-refundable upfront license

fees, development and commercial milestones, partial or complete reimbursement of research and development costs, and royalties on net

sales of licensed products.

Each type of payments results in collaborative revenues except for revenues from royalties on net sales of

licensed products, which are classified as royalty revenues.

To date, the Company has not received any royalty revenues.

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The Company had multiple deliverables under the

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

Estimation 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 annually basis, and makes any appropriate adjustments on

a prospective basis.

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

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To date, the receipt of non-refundable 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

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

(ii) Milestone payments

The Company is eligible to receive milestone payments

under the collaborative agreement with collaboration partners based on achievement of specified development, regulatory and commercial

Management evaluated the nature of the events triggering these contingent payments, and concluded that these events fall into

two categories:

(a) events which involve the performance of the Company’s obligations under the collaborative agreement with collaboration

partners, and (b) events which do not involve the performance of the Company’s obligations under the collaborative agreement with

collaboration partners.

The Company is eligible to receive milestone

payments under the collaborative agreement with collaboration partners based on achievement of specified development, regulatory and

commercial events.

Management evaluated the nature of the events triggering these contingent payments, and concluded that these events

fall into two categories:

(a) events which involve the performance of the Company’s obligations under the collaborative agreement

with collaboration partners, and (b) events which do not involve the performance of the Company’s obligations under the collaborative

agreement with collaboration partners.

The former category of milestone payments consists

of those triggered by development and regulatory activities in the territories specified in the collaborative agreements.

Management concluded

that each of these payments constitute substantive milestone payments.

This conclusion was based primarily on the facts that (i) each

triggering event represents a specific outcome that can be achieved only through successful performance by the Company of one or more

of its deliverables, (ii) achievement of each triggering event was subject to inherent risk and uncertainty and would result in additional

payments becoming due to the Company, (iii) each of the milestone payments is non-refundable, (iv) substantial effort is required to complete

each milestone, (v) the amount of each milestone payment is reasonable in relation to the value created in achieving the milestone, (vi)

a substantial amount of time is expected to pass between the upfront payment and the potential milestone payments, and (vii) the milestone

payments relate solely to past performance.

Based on the foregoing, the Company recognizes any revenue from these milestone payments in

the period in which the underlying triggering event occurs.

concluded that each of these payments constitute substantive milestone payments.

This conclusion was based primarily on the facts that

(i) each triggering event represents a specific outcome that can be achieved only through successful performance by the Company of one

or more of its deliverables, (ii) achievement of each triggering event was subject to inherent risk and uncertainty and would result

in additional payments becoming due to the Company, (iii) each of the milestone payments is non-refundable, (iv) substantial effort is

required to complete each milestone, (v) the amount of each milestone payment is reasonable in relation to the value created in achieving

the milestone, (vi) a substantial amount of time is expected to pass between the upfront payment and the potential milestone payments,

and (vii) the milestone payments relate solely to past performance.

Based on the foregoing, the Company recognizes any revenue from these

milestone payments in the period in which the underlying triggering event occurs.

(iii) Multiple Element Arrangements

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(i) the delivered item(s) has

value to the customer on a standalone basis and (ii) if the arrangement includes a general right of return relative to the delivered item(s),

delivery or performance of the undelivered item(s) is considered probable and substantially within its control.

In assessing whether an

item under a collaboration has standalone value, the Company considers factors such as the research, manufacturing, and commercialization

value to the customer on a standalone basis and (ii) if the arrangement includes a general right of return relative to the delivered

item(s), delivery or performance of the undelivered item(s) is considered probable and substantially within its control.

whether an item under a collaboration has standalone value, the Company considers factors such as the research, manufacturing, and commercialization

capabilities of the collaboration partner and the availability of the associated expertise in the general marketplace.

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In the event that a deliverable does not represent a separate unit of accounting, the Company recognizes revenue from the

combined unit of accounting over the Company’s contractual or estimated performance period for the undelivered elements, which is

typically the term of the Company’s research and development obligations.

If there is no discernible pattern of performance or objectively

measurable performance measures do not exist, then the Company recognizes revenue under the arrangement on a straight-line basis over

the period the Company is expected to complete its performance obligations.

Conversely, if the pattern of performance in which the service

is provided to the customer can be determined and objectively measurable performance measures exist, then the Company recognizes revenue

under the arrangement using the proportional performance method.

Revenue recognized is limited to the lesser of the cumulative amount

of payments received or the cumulative amount of revenue earned, as determined using the straight-line method or proportional performance

method, as applicable, as of the period ending date.

combined unit of accounting over the Company’s contractual or estimated performance period for the undelivered elements, which

is typically the term of the Company’s research and development obligations.

If there is no discernible pattern of performance

or objectively measurable performance measures do not exist, then the Company recognizes revenue under the arrangement on a straight-line

basis over the period the Company is expected to complete its performance obligations.

Conversely, if the pattern of performance in which

the service is provided to the customer can be determined and objectively measurable performance measures exist, then the Company recognizes

revenue under the arrangement using the proportional performance method.

Revenue recognized is limited to the lesser of the cumulative

amount of payments received or the cumulative amount of revenue earned, as determined using the straight-line method or proportional

performance method, as applicable, as of the period ending date.

At the inception of an arrangement that includes

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performance to achieve the milestone or the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting

from its performance to achieve the milestone, (2) the consideration relates solely to past performance and (3) the consideration is reasonable

relative to all of the deliverables and payment terms within the arrangement.

The Company evaluates factors such as the scientific, clinical,

regulatory, commercial, and other risks that must be overcome to achieve the particular milestone and the level of effort and investment

required to achieve the particular milestone in making this assessment.

There is considerable judgment involved in determining whether

a milestone satisfies all of the criteria required to conclude that a milestone is substantive.

Milestones that are not considered substantive

are recognized as earned if there are no remaining performance obligations or over the remaining period of performance, assuming all other

revenue recognition criteria are met.

from its performance to achieve the milestone, (2) the consideration relates solely to past performance and (3) the consideration is

reasonable relative to all of the deliverables and payment terms within the arrangement.

The Company evaluates factors such as the scientific,

clinical, regulatory, commercial, and other risks that must be overcome to achieve the particular milestone and the level of effort and

investment required to achieve the particular milestone in making this assessment.

There is considerable judgment involved in determining

whether a milestone satisfies all of the criteria required to conclude that a milestone is substantive.

Milestones that are not considered

substantive are recognized as earned if there are no remaining performance obligations or over the remaining period of performance, assuming

all other revenue recognition criteria are met.

(iv) Royalties and Profit Sharing Payments

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Based on those criteria, the Company

considers these payments to be contingent revenues, and recognizes them as revenue in the period in which the applicable contingency is

considers these payments to be contingent revenues, and recognizes them as revenue in the period in which the applicable contingency

Revenues Derived from Research and Development

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or activities are performed, in accordance with the contract terms.

The Company typically has only one performance obligation at the inception

of a contract, which is to perform research and development services.

The Company may also provide its customers with an option to request

that the Company provides additional goods or services in the future, such as active pharmaceutical ingredient, API, or IND/NDA/ANDA/510K

The Company typically has only one performance obligation at the

inception of a contract, which is to perform research and development services.

The Company may also provide its customers with an option

to request that the Company provides additional goods or services in the future, such as active pharmaceutical ingredient, API, or IND/NDA/ANDA/510K

The Company evaluates whether these options are material rights at the inception of the contract.

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with provisions of gross or net revenue presentation.

The Company recognizes the corresponding revenues or records the corresponding offset

to research and development expenses as it satisfies the related performance obligations.

The Company recognizes the corresponding revenues or records the corresponding

offset to research and development expenses as it satisfies the related performance obligations.

The Company then determines the transaction price

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Estimated Life

Buildings and leasehold improvements

Buildings and leasehold

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:

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

Its proportionate share of the income or loss is recognized monthly and is recorded in gains (losses) on equity investments.

Non-marketable 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.

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.

Its proportionate share of the income or loss is recognized

monthly and is recorded in gains (losses) on equity investments.

● Non-marketable

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.

Other-Than-Temporary Impairment

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Impairments affect earnings as follows:

Marketable equity securities include the consideration of general market conditions, the duration and extent to which the fair value is below cost, and our ability and intent to hold the investment for a sufficient period of time to allow for recovery of value in the foreseeable future.

The Company also considers specific adverse conditions related to the financial health of, and the business outlook for, the investee, which may include industry and sector performance, changes in technology, operational and financing cash flow factors, and changes in the investee’s credit rating.

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

equity securities include the consideration of general market conditions, the duration and

extent to which the fair value is below cost, and our ability and intent to hold the investment

for a sufficient period of time to allow for recovery of value in the foreseeable future.

The Company also considers specific adverse conditions related to the financial health of,

and the business outlook for, the investee, which may include industry and sector performance,

changes in technology, operational and financing cash flow factors, and changes in the investee’s

credit rating.

The Company records other-than-temporary impairments on marketable equity

securities and marketable 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;

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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 impairment of equity investments were $ 0 for the three and six months ended June 30, 2022 and 2021, respectively.

Other-than-temporary impairment of equity investments were $ 0 for the three and nine months ended September 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.

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.

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.

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.

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.

goodwill for impairment as of September 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 uncertain.

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

Research and Development Expenses

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when incurred.

For CDMO business unit, the Company accounts for

R&D costs in accordance with Accounting Standards Codification (“ASC”) 730, Research and Development (“ASC 730”).

Research and development expenses are charged to expense as incurred unless there is an alternative future use in other research and development

projects or otherwise.

Research and development expenses are comprised of costs incurred in performing research and development activities,

including personnel-related costs, facilities-related overhead, and outside contracted services including clinical trial costs, manufacturing

and process development 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.

For CDMO business unit, the Company accounts

for R&D costs in accordance with Accounting Standards Codification (“ASC”) 730, Research and Development (“ASC

Research and development expenses are charged to expense as incurred unless there is an alternative future use in other

research and development projects or otherwise.

Research and development expenses are comprised of costs incurred in performing research

and development activities, including personnel-related costs, facilities-related overhead, and outside contracted services including

clinical trial costs, manufacturing and process development 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.

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 $ 3,309 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

benefits, which were expensed as incurred, were $ 3,302 and $ 2,906 for the three months ended September 30, 2022 and 2021, respectively.

The total amounts for such employee benefits, which were expensed as incurred, were $ 9,948 and $ 8,268 for the nine months ended September

30, 2022 and 2021, respectively.

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Stock-based Compensation

The Company measures expense associated with all

employee stock-based compensation awards using a fair value method and recognizes such expense in the consolidated financial statements

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

The Company accounted for stock-based compensation

to non-employees in accordance with FASB ASC Topic 718 “Compensation-Stock Compensation” and FASB ASC Topic 505-50 “Equity-Based

Payments to Non-Employees” which requires that the cost of services received from non-employees is measured at fair value at the

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 $ 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.

The Company measures expense associated with all employee stock-based

compensation awards using a fair value method and recognizes such expense in the unaudited consolidated financial statements 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 for the three and nine months ended September 30, 2022 and 2021, respectively.

The Company accounted for stock-based compensation to non-employees

in accordance with FASB ASC Topic 718 “Compensation-Stock Compensation” and FASB ASC Topic 505-50 “Equity-Based Payments

to Non-Employees” which requires that the cost of services received from non-employees is measured at fair value at the earlier

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

Total non-employee

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

non-employee stock-based compensation expenses were $ 5,143,483 and $ 927,220 for the nine months ended September 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.

Under ASC 740, a tax position is recognized as

a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with

a tax examination being presumed to occur.

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 a benefit only if it is “more likely than not” that the tax position would be sustained in a tax

examination, with a tax examination being presumed to occur.

The evaluation of a tax position is a two-step process.

The first step is to determine whether

it is more-likely-than-not that a tax position will be sustained upon examination, including the resolution of any related appeals or

litigations based on the technical merits of that position.

The second step is to measure a tax position that meets the more-likely-than-not

threshold to determine the amount of benefits recognized in the financial statements.

A tax position is measured at the largest amount

of benefit that is greater than 50 percent likely of being realized upon ultimate settlement.

Tax positions that previously failed to

meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met.

Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent

financial reporting period in which the threshold is no longer satisfied.

Penalties and interest incurred related to underpayment of income

tax are classified as income tax expense in the year incurred.

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

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

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

accounting in interim periods, disclosures and transition.

The first step

is to determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including the resolution

of any related appeals or litigations based on the technical merits of that position.

The second step is to measure a tax position

that meets the more-likely-than-not threshold to determine the amount of benefits recognized in the financial statements.

position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate

Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the

first subsequent period in which the threshold is met.

Previously recognized tax positions that no longer meet the

more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is

no longer satisfied.

Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in

the year incurred.

No significant penalty or interest relating to income taxes has been incurred for the nine months ended September 30,

2022 and 2021.

GAAP also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods,

disclosures and transition.

On December 22, 2017, the SEC issued Staff Accounting

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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.

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.

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.

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

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 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).

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”).

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

ASU 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.

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

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

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

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The Company is currently evaluating the impact that the standard

will have on its consolidated financial statements.

will have on its unaudited consolidated financial statements.

COLLABORATIVE AGREEMENTS

Collaborative agreements with BHK

(i) On February 24, 2015, BioLite Taiwan and BioHopeKing

Corporation (the “BHK”) entered into a co-development agreement, (the “BHK Co-Development Agreement”), pursuant

to which it is collaborative with BHK to develop and commercialize BLI-1401-2 (Botanical Drug) Triple Negative Breast Cancer (TNBC) Combination

Therapy (BLI-1401-2 Products) in Asian countries excluding Japan for all related intellectual property rights, and has developed it for

medicinal use in collaboration with outside researchers.

The development costs shall be shared 50/50 between BHK and the Company.

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.

(i) On February 24, 2015, BioLite Taiwan and

BioHopeKing Corporation (the “BHK”) entered into a co-development agreement, (the “BHK Co-Development Agreement”),

pursuant to which it is collaborative with BHK to develop and commercialize BLI-1401-2 (Botanical Drug) Triple Negative Breast Cancer

(TNBC) Combination Therapy (BLI-1401-2 Products) in Asian countries excluding Japan for all related intellectual property rights, and

has developed it for medicinal use in collaboration with outside researchers.

The development costs shall be shared 50/50 between BHK

and the Company.

The 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.

On July 27, 2016, BioLite Taiwan and BHK agreed

to amend the payment terms of the milestone payment in an aggregate amount of $ 10 million based on the following schedule:

● Upon the signing of the BHK Co-Development Agreement:

the signing of the BHK Co-Development Agreement:

$1 million, or 10% of total payment

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$1 million, or 10% of total payment

At the completion of first phase II clinical trial:

the completion of first phase II clinical trial:

$1 million, or 10% of total payment

At the initiation of phase III of clinical trial research:

the initiation of phase III of clinical trial research:

$3 million, or 30% of total payment

● Upon the New Drug Application (NDA) submission:

the New Drug Application (NDA) submission:

$4 million, or 40% of total payment

In December 2015, BHK has paid a

non-refundable upfront cash payment of $ 1 million, or 10 % of $ 10,000,000 , upon the signing of BHK Co-Development Agreement.

Company concluded that the deliverables are considered separate units of accounting as the delivered items have value to the

customer on a standalone basis and recognized this cash receipt as collaboration revenue when all research, technical, and

development data was delivered to BHK in 2015.

The receipt is for the compensation of past research efforts and contributions made

by BioLite Taiwan before this collaborative agreement was signed and it does not relate to any future commitments made by BioLite

Taiwan and BHK in this collaborative agreement.

In August 2016, the Company has received the second milestone payment of

NT$ 31,649,000 , approximately equivalent to $ 1 million, and recognized collaboration revenue for the year ended December 31, 2016.

of the date of this report, the Company has not completed the first phase II clinical trial.

In December 2015, BHK has paid a non-refundable

upfront cash payment of $ 1 million, or 10 % of $ 10,000,000 , upon the signing of BHK Co-Development Agreement.

The Company concluded that

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

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

The receipt is for the compensation of past research efforts and contributions made by BioLite Taiwan before this collaborative

agreement was signed and it does not relate to any future commitments made by BioLite Taiwan and BHK in this collaborative agreement.

In August 2016, the Company has received the second milestone payment of NT$ 31,649,000 , approximately equivalent to $ 1 million, and recognized

collaboration revenue for the year ended December 31, 2016.

As of the date of this report, the Company has not completed the first phase

II clinical trial.

In addition to the milestone payments, BioLite

Taiwan is entitled to receive royalty on 12 % of BHK’s net sales related to BLI-1401-2 Products.

As of June 30, 2022 and December

As of September 30, 2022 and December

31, 2021, the Company has not earned the royalty under the BHK Co-Development Agreement.

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BHK to co-develop and commercialize BLI-1005 for “Targeting Major Depressive Disorder” (BLI-1005 Products) and BLI-1006 for

“Targeting Inflammatory Bowel Disease” (BLI-1006 Products) in Asia excluding Japan for all related intellectual property rights,

and has developed it for medicinal use in collaboration with outside researchers.

The development costs shall be shared 50/50 between

BHK and the Company.

The 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.

“Targeting Inflammatory Bowel Disease” (BLI-1006 Products) in Asia excluding Japan for all related intellectual property

rights, and has developed it for medicinal use in collaboration with outside researchers.

The development costs shall be shared 50/50

between BHK and the Company.

The 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.

In 2015, the Company recognized the cash receipt

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equivalent to $1.60 million, BioLite Taiwan is entitled to receive 50% of the future net licensing income or net sales profit.

30, 2022 and December 31, 2021, the Company has not earned the royalty under the BHK Collaborative Agreements.

September 30, 2022 and December 31, 2021, the Company has not earned the royalty under the BHK Collaborative Agreements.

Co-Development agreement with Rgene Corporation,

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in connection with the Co-Dev Agreement as additional paid-in capital during the year ended December 31, 2017.

During the year ended December

31, 2017, the Company has received $ 450,000 in cash.

On December 24, 2018, the Company received the remaining balance of $2,550,000 in

the form of newly issued shares of Rgene’s Common Stock, at the price of NT$50 (approximately equivalent to $1.60 per share), for

an aggregate number of 1,530,000 shares, which accounted for equity method long-term investment as of December 31, 2018.

During the year

ended December 31, 2018, the Company has recognized investment loss of $549.

On December 31, 2018, the Company determined to fully write

off this investment 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,

changes in operating structure of Rgene, additional funding requirements, and Rgene’s ability to remain in business.

that have been initiated will be managed and supported by the Company and Rgene.

The Company and Rgene signed an amendment to the

Co-Dev Agreement on November 10, 2020, pursuant to which both parties agreed to delete AB-1507 HER2/neu Positive Breast Cancer Combination

During the year ended

December 31, 2017, the Company has received $ 450,000 in cash.

On December 24, 2018, the Company received the remaining balance of $2,550,000

in the form of newly issued shares of Rgene’s Common Stock, at the price of NT$50 (approximately equivalent to $1.60 per share),

for an aggregate number of 1,530,000 shares, which accounted for equity method long-term investment as of December 31, 2018.

year ended December 31, 2018, the Company has recognized investment loss of $549.

On December 31, 2018, the Company determined to fully

write off this investment 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, changes in operating structure of Rgene, additional funding requirements, and Rgene’s ability to remain in business.

All projects that have been initiated will be managed and supported by the Company and Rgene.

The Company and Rgene signed an amendment to

the Co-Dev Agreement on November 10, 2020, pursuant to which both parties agreed to delete AB-1507 HER2/neu Positive Breast Cancer Combination

Therapy and AB 1527 Ovary Cancer Combination Therapy and add ABV-1519 EGFR Positive Non-Small Cell Lung Cancer Combination Therapy and

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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

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 notice.

Collaborative agreement with BioFirst Corporation,

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On July 24, 2017, BriVision entered into a collaborative

agreement (the “BioFirst Collaborative Agreement”) with BioFirst Corporation (“BioFirst”), pursuant to which BioFirst

granted the Company the global licensing right for medical use of the product (the “Product”):

BFC-1401 Vitreous Substitute

for Vitrectomy.

BioFirst is a related party to the Company because a controlling beneficiary shareholder of YuanGene Corporation and the

Company is one of the directors and Common Stock shareholders of BioFirst (See Note 12).

agreement (the “BioFirst Collaborative Agreement”) with BioFirst Corporation (“BioFirst”), pursuant to which

BioFirst granted the Company the global licensing right for medical use of the product (the “Product”):

BFC-1401 Vitreous

Substitute for Vitrectomy.

BioFirst is a related party to the Company because a controlling beneficiary shareholder of YuanGene Corporation

and the Company is one of the directors and Common Stock shareholders of BioFirst (See Note 12).

Pursuant to the BioFirst Collaborative Agreement,

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In addition, the Company is entitled to receive

of the future net licensing income or net sales profit, if any, and any development cost shall be equally shared by both BriVision and

50 % of the future net licensing income or net sales profit, if any, and any development cost shall be equally shared by both BriVision

and BioFirst.

On September 25, 2017, BioFirst has delivered

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According to ASC 730-10-25-1, absent alternative future

uses the acquisition of product rights to be used in research and development activities must be charged to research and development expenses

Hence, the entire amount of $ 3,000,000 is fully expensed as research and development expense during the year ended December

uses the acquisition of product rights to be used in research and development activities must be charged to research and development

expenses immediately.

Hence, the entire amount of $ 3,000,000 is fully expensed as research and development expense during the year ended

December 31, 2017.

On June 30, 2019, BriVision entered into a Stock

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

Pursuant to the Purchase Agreement, the Company issued

428,571 shares of the Company’s common stock to BioFirst in consideration for $ 3,000,000 owed by the Company to BioFirst (the “Total

Payment”) in connection with a certain collaborative agreement between the Company and BioFirst dated July 24, 2017 (the “Collaborative

Pursuant to the Collaborative Agreement, BioFirst granted the Company the global licensing right to co-develop BFC-1401

or ABV-1701 Vitreous Substitute for Vitrectomy for medical purposes in consideration for the Total Payment.

Pursuant to the Purchase Agreement, the Company

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

(the “Total Payment”) in connection with a certain collaborative agreement between the Company and BioFirst dated July 24,

2017 (the “Collaborative Agreement”).

Pursuant to the Collaborative Agreement, BioFirst granted the Company the global licensing

right to co-develop BFC-1401 or ABV-1701 Vitreous Substitute for Vitrectomy for medical purposes in consideration for the Total Payment.

On August 5, 2019, BriVision entered into a second

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Inventory consists of the following:

September 30,

Finished goods

3 unchanged sentences

PROPERTY AND EQUIPMENT

equipment as of June 30, 2022 and December 31, 2021 are summarized as follows:

Property and equipment as of

September 30, 2022 and December 31, 2021 are summarized as follows:

September 30,

Buildings and leasehold improvements

5 unchanged sentences

Property and equipment, net

Depreciation expenses were $ 5,491 and $ 2,941 for

three months ended June 30, 2022 and 2021, respectively.

Depreciation expenses were $ 10,902 and $ 5,869

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

Depreciation expenses were $ 6,462

and $ 2,856 for three months ended September 30, 2022 and 2021, respectively.

Depreciation expenses were $ 17,364

and $ 8,725 for nine months ended September 30, 2022 and 2021, respectively.

LONG-TERM INVESTMENTS

The ownership percentages of each investee are listed as follows:

ownership percentages of each investee are listed as follows:

Ownership percentage

September 30,

Name of related party

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Name of related party

The extent the investee relies on the Company for its business

The extent the investee relies on the Company

for its business

Braingenesis Biotechnology Co., Ltd.

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Collaborating with the Company to develop and commercialize drugs

Long-term investment mainly consists of the following:

(3) Long-term

investment mainly consists of the following:

September 30,

Non-marketable Cost Method Investments, net

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Rgene Corporation

BioFirst Corporation (the “BioFirst”):

The Company holds an equity interest

in BioFirst Corporation, accounting for its equity interest using the equity method to accounts for its equity investment as prescribed

in ASC 323, Investments—Equity Method and Joint Ventures (“ASC 323”).

Equity method adjustments include the Company’s

proportionate share of investee’s income or loss and other adjustments required by the equity method.

As of June 30, 2022 and December

31, 2021, the Company owns 15.99 % and 15.99 % common stock shares of BioFirst, respectively.

The Company made prepayment for equity investment

in BioFirst to purchase additional 317,000 shares to be issued by BioFirst in the aggregate amount of $ 639,072 and $ 684,720 , recorded

as prepayment for long-term investments as of June 30, 2022 and December 31, 2021, respectively.

Summarized financial information for the Company’s

equity method investee, BioFirst, is as follows:

Corporation (the “BioFirst”):

The Company holds

an equity interest in BioFirst Corporation, accounting for its equity interest using the equity method to accounts for its equity investment

as prescribed in ASC 323, Investments—Equity Method and Joint Ventures (“ASC 323”).

Equity method adjustments include

the Company’s proportionate share of investee’s income or loss and other adjustments required by the equity method.

September 30, 2022 and December 31, 2021, the Company owns 15.99 % and 15.99 % common stock shares of BioFirst, respectively.

made prepayment for equity investment in BioFirst to purchase additional 317,000 shares to be issued by BioFirst in the aggregate amount

of $ 599,130 and $ 684,720 , recorded as prepayment for long-term investments as of September 30, 2022 and December 31, 2021, respectively.

In 2021, the Company and BioFirst entered

into several loan agreements for a total amount of $ 465,000 to meet its working capital needs.

All the loans period was twelve months

and all with an interest rate of 6.5 % per annum.

In 2022, the Company and BioFirst entered into several loan agreements for a total amount

of $ 1,365,000 to meet its working capital needs.

All the loans period was twelve months and with an interest rate of 6.5 % per annum.

of September 30, 2022, and December 31, 2021, the outstanding loan balance was $ 1,830,000 and $ 465,000 ;

and accrued interest was $ 81,404

and $ 2,325 , respectively.

In 2021, the Company and BioFirst entered into a collaborative agreement to allocate R&D cost, of which

the amount due from BioFirst was $ 75,824 and $ 1,110 as of September 30, 2022 and December 31, 2021, respectively.

The Board of the Company

agreed to convert its amount due from BioFirst into equity, due to BioFirst’s capital raise, subject to the valuation report which

justify the debt-to-equity transaction, by the end of 2022.

As of September 30, 2022 and December

31, 2021, the Company has an aggregate amount of $ 2,586,658 and $ 1,153,155 , respectively.

Summarized financial information

for the Company’s equity method investee, BioFirst, is as follows:

Balance Sheet

September 30,

Current Assets

4 unchanged sentences

Statement of Operations

Six Months Ended

Nine Months Ended

September 30,

Share of losses from investments accounted for using the equity method

Rgene Corporation (the “Rgene”)

Both Rgene and the Company are under common control by Dr.

Jiang, the CEO and Chairman of the BioLite Inc.

Tsung-Shann Jiang is able to exercise significant influence, but not control,

over the Rgene, the Company determined to use the equity method to account for its equity investment as prescribed in ASC 323, Investments—Equity

Method and Joint Ventures (“ASC 323”).

Equity method adjustments include the Company’s proportionate share of investee’s

income or loss and other adjustments required by the equity method.

As of June 30, 2022 and December 31, 2021, the Company owns 31.62 %

and 31.62 % Common Stock shares of Rgene, respectively.

On June 30, 2022, Dr.

Tsung-Shann Jiang has been elected to become the Chairman

Summarized financial information for the Company’s

equity method investee, Rgene, is as follows:

Both Rgene and

the Company are under common control by Dr.

Tsung-Shann Jiang, the CEO and Chairman of the BioLite Inc.

Tsung-Shann Jiang is

able to exercise significant influence, but not control, over the Rgene, the Company determined to use the equity method to account for

its equity investment as prescribed in ASC 323, Investments—Equity Method and Joint Ventures (“ASC 323”).

Equity method

adjustments include the Company’s proportionate share of investee’s income or loss and other adjustments required by the

equity method.

As of September 30, 2022 and December 31, 2021, the Company owns 31.62 % and 31.62 % Common Stock shares of Rgene, respectively.

September 30, 2022, Dr.

Tsung-Shann Jiang has been elected to become the Chairman of Rgene.

Summarized financial information

for the Company’s equity method investee, Rgene, is as follows:

Balance Sheets

September 30,

Current Assets

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( 1,007,586 )

( 1,486,911 )

Statement of Operations

Six Months Ended

Nine Months Ended

September 30,

Share of loss from investments accounted for using the equity method

Disposition of long-term investment

During the three and six months ended

June 30, 2022 and 2021, there is no disposition of long-term investment.

During the three

and nine months ended September 30, 2022 and 2021, there is no disposition of long-term investment.

Losses on Equity Investments

The components of losses on equity investments

for each period were as follows:

Six Months Ended

The components of losses on equity

investments for each period were as follows:

Nine Months Ended

September 30,

Share of equity method investee losses

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CONVERTIBLE NOTES PAYABLE

On May 9, 2018, the Company issued an eighteen-month

term unsecured convertible promissory note (the “Yu and Wei Note”) in an aggregate principal amount of $ 300,000 to Guoliang

Yu and Yingfei Wei Family Trust (the “Yu and Wei”), pursuant to which the Company received $ 300,000 .

The Yu and Wei Note bears

interest at 8 % per annum.

The Company shall pay to the Yu and Wei an amount in cash representing all outstanding principal and accrued

and unpaid interest on the Eighteenth (18) month anniversary of the issuance date of the Yu and Wei Note, which is on November 8, 2019.

In the event that the Company raises gross proceeds from the sale of its common stock of at least $ 5,000,000 (an “Equity Offering”)

then within five days of the closing for such offering, the Company must repay the outstanding amount of this Yu and Wei Note.

time from the date hereof until this Yu and Wei Note has been satisfied, the Yu and Wei may convert the unpaid and outstanding principal

On May 9, 2018, the Company issued

an eighteen-month term unsecured convertible promissory note (the “Yu and Wei Note”) in an aggregate principal amount of

$ 300,000 to Guoliang Yu and Yingfei Wei Family Trust (the “Yu and Wei”), pursuant to which the Company received $ 300,000 .

The Yu and Wei Note bears interest at 8 % per annum.

The Company shall pay to the Yu and Wei an amount in cash representing all outstanding

principal and accrued and unpaid interest on the Eighteenth (18) month anniversary of the issuance date of the Yu and Wei Note, which

is on November 8, 2019.

In the event that the Company raises gross proceeds from the sale of its common stock of at least $ 5,000,000

(an “Equity Offering”) then within five days of the closing for such offering, the Company must repay the outstanding amount

of this Yu and Wei Note.

At any time from the date hereof until this Yu and Wei Note has been satisfied, the Yu and Wei may convert the

unpaid and outstanding principal plus any accrued and unpaid interest and or default interest, if any, into shares of the Company’s

common stock at a conversion price (the “Conversion Price”) equal to the lower of (i) $ 2.00 per share (the “Fixed Conversion

Price”), subject to adjustment or (ii) 80 % of the per share offering price (the “Alternative Conversion Price”) of

any completed equity offering of the Company in an amount exceeding $ 500,000 that occurs when any part of the Yu and Wei Note is outstanding,

subject to adjustments set forth in the Yu and Wei Note.

In accordance with FASB ASC 470-20, the Company recognized none of the intrinsic

value of embedded beneficial conversion feature present in the Yu and Wei Note.

On January 21, 2020, Yu and Wei entered into a new agreement

that the new Note bears interest at 20 % per annum.

The Company shall pay to the Yu and Wei an amount in cash representing all outstanding

principal and accrued and unpaid interest on the Twelve (12) month anniversary of the issuance date of the new “Yu and Wei”

Note, which is on January 20, 2021.

On April 5, 2020, the Company entered into an exchange agreement with “Yu and Wei”.

aggregate principal amount plus accrued interest expenses were $ 354,722 , and the Company agreed to issue to the Holders an aggregate

of 192,784 shares of the Company’s common stock, and warrants to purchase 192,784 shares of the Company’s common stock.

common shares have been issued during the year ended December 31, 2020.

On June 27, 2018, the Company

issued an eighteen-month term unsecured convertible promissory note (the “Keypoint Note”) in the aggregate principal amount

of $ 250,000 to Keypoint Technology Ltd.

(“Keypoint”), a related party, pursuant to which the Company received $ 250,000 .

Keypoint Note bears interest at 8 % per annum.

The Company shall pay to the Keypoint an amount in cash representing all outstanding principal

and accrued and unpaid interest on the Eighteenth (18) month anniversary of the issuance date of the Keypoint Note, which is on December

In the event that the Company raises gross proceeds from the sale of its common stock of at least $ 5,000,000 (an “Equity

Offering”) then within five days of the closing for such offering, the Company must repay the outstanding amount of this Keypoint

At any time from the date hereof until this Keypoint Note has been satisfied, Keypoint may convert the unpaid and outstanding principal

plus any accrued and unpaid interest and or default interest, if any, into shares of the Company’s common stock at a conversion

1 unchanged sentence

to adjustment or (ii) 80% of the per share offering price (the “Alternative Conversion Price”) of any completed equity offering

of the Company in an amount exceeding $ 500,000 that occurs when any part of the Yu and Wei Note is outstanding, subject to adjustments

set forth in the Yu and Wei Note.

of the Company in an amount exceeding $500,000 that occurs when any part of the Keypoint Note is outstanding, subject to adjustments

set forth in the Keypoint Note.

In accordance with FASB ASC 470-20, the Company recognized none of the intrinsic value of embedded beneficial

conversion feature present in the Yu and Wei Note.

On January 21, 2020, Yu and Wei entered into a new agreement that the new Note bears

interest at 20 % per annum.

The Company shall pay to the Yu and Wei an amount in cash representing all outstanding principal and accrued

and unpaid interest on the Twelve (12) month anniversary of the issuance date of the new “Yu and Wei” Note, which is on January

On April 5, 2020, the Company entered into an exchange agreement with “Yu and Wei”.

The aggregate principal amount

plus accrued interest expenses were $ 354,722 , and the Company agreed to issue to the Holders an aggregate of 192,784 shares of the Company’s

conversion feature present in the Keypoint Note.

On January 21, 2020, Keypoint entered into a new agreement that the new Note bears interest

at 20% per annum.

The Company shall pay to the Keypoint an amount in cash representing all outstanding principal and accrued and unpaid

interest on the Twelve (12) month anniversary of the issuance date of the new “Keypoint” Note, which is on January 20, 2021.

On April 5, 2020, the Company entered into an exchange agreement with “Keypoint”.

The aggregate principal amount plus accrued

interest expenses were $292,826, and the Company agreed to issue to the Holders an aggregate of 159,145 shares of the Company’s

common stock, and warrants to purchase 159,145 shares of the Company’s common stock.

1 unchanged sentence

the year ended December 31, 2020.

On June 27, 2018, the Company issued an eighteen-month

term unsecured convertible promissory note (the “Keypoint Note”) in the aggregate principal amount of $ 250,000 to Keypoint

Technology Ltd.

(“Keypoint”), a related party, pursuant to which the Company received $ 250,000 .

The Keypoint Note bears interest

On August 25, 2018, the Company

issued an eighteen-month term unsecured convertible promissory notes (the “Odaira Note”) in the aggregate principal amount

of $ 250,000 to Yoshinobu Odaira.

(“Odaira”), pursuant to which the Company received $ 250,000 .

The Odaira Note bears interest

at 8 % per annum.

The Company shall pay to the Keypoint an amount in cash representing all outstanding principal and accrued and unpaid

interest on the Eighteenth (18) month anniversary of the issuance date of the Keypoint Note, which is on December 26, 2019.

The Company shall pay to the Odaira an amount in cash representing all outstanding principal and accrued and unpaid

interest on the Eighteenth (18) month anniversary of the issuance date of the Odaira Note, which is on February 24, 2020.

that the Company raises gross proceeds from the sale of its common stock of at least $ 5,000,000 (an “Equity Offering”) then

within five days of the closing for such offering, the Company must repay the outstanding amount of this Keypoint Note.

within five days of the closing for such offering, the Company must repay the outstanding amount of this Odaira Note.

At any time from

the date hereof until this Keypoint Note has been satisfied, Keypoint may convert the unpaid and outstanding principal plus any accrued

and unpaid interest and or default interest, if any, into shares of the Company’s common stock at a conversion price (the “Conversion

the date hereof until this Odaira Note has been satisfied, Odaira may convert the unpaid and outstanding principal plus any accrued and

unpaid interest and or default interest, if any, into shares of the Company’s common stock at a conversion price (the “Conversion

Price”) equal to the lower of (i) $2.00 per share (the “Fixed Conversion Price”), subject to adjustment or (ii) 80%

of the per share offering price (the “Alternative Conversion Price”) of any completed equity offering of the Company in an

amount exceeding $500,000 that occurs when any part of the Keypoint Note is outstanding, subject to adjustments set forth in the Keypoint

amount exceeding $500,000 that occurs when any part of the Odaira Note is outstanding, subject to adjustments set forth in the Odaira

In accordance with FASB ASC 470-20, the Company recognized none of the intrinsic value of embedded beneficial conversion feature

present in the Keypoint Note.

On January 21, 2020, Keypoint entered into a new agreement that the new Note bears interest at 20% per annum.

The Company shall pay to the Keypoint an amount in cash representing all outstanding principal and accrued and unpaid interest on the

Twelve (12) month anniversary of the issuance date of the new “Keypoint” Note, which is on January 20, 2021.

On April 5, 2020,

the Company entered into an exchange agreement with “Keypoint”.

The aggregate principal amount plus accrued interest expenses

were $292,826, and the Company agreed to issue to the Holders an aggregate of 159,145 shares of the Company’s common stock, and

warrants to purchase 159,145 shares of the Company’s common stock.

These common shares have been issued during the year ended December

On August 25, 2018, the Company issued an eighteen-month

term unsecured convertible promissory notes (the “Odaira Note”) in the aggregate principal amount of $ 250,000 to Yoshinobu

(“Odaira”), pursuant to which the Company received $ 250,000 .

The Odaira Note bears interest at 8 % per annum.

shall pay to the Odaira an amount in cash representing all outstanding principal and accrued and unpaid interest on the Eighteenth (18)

month anniversary of the issuance date of the Odaira Note, which is on February 24, 2020.

In the event that the Company raises gross proceeds

from the sale of its common stock of at least $ 5,000,000 (an “Equity Offering”) then within five days of the closing for such

offering, the Company must repay the outstanding amount of this Odaira Note.

At any time from the date hereof until this Odaira Note has

been satisfied, Odaira may convert the unpaid and outstanding principal plus any accrued and unpaid interest and or default interest,

if any, into shares of the Company’s common stock at a conversion price (the “Conversion Price”) equal to the lower

of (i) $2.00 per share (the “Fixed Conversion Price”), subject to adjustment or (ii) 80% of the per share offering price (the

“Alternative Conversion Price”) of any completed equity offering of the Company in an amount exceeding $500,000 that occurs

when any part of the Odaira Note is outstanding, subject to adjustments set forth in the Odaira Note.

In accordance with FASB ASC 470-20,

the Company recognized none of the intrinsic value of embedded beneficial conversion feature present in the Odaira Note.

On January 21,

2020, Odaira entered into a new agreement that the new Note bears interest at 20% per annum.

The Company shall pay to the Odaira an amount

in cash representing all outstanding principal and accrued and unpaid interest on the Twelve (12) month anniversary of the issuance date

of the new “Odaira” Note, which is on January 20, 2021.

On April 5, 2020, the Company entered into an exchange agreement with

The aggregate principal amount plus accrued interest expenses were $284,036, and the Company agreed to issue to

the Holders an aggregate of 154,368 shares of the Company’s common stock, and warrants to purchase 154,368 shares of the Company’s

common stock.

present in the Odaira Note.

On January 21, 2020, Odaira entered into a new agreement that the new Note bears interest at 20% per annum.

The Company shall pay to the Odaira an amount in cash representing all outstanding principal and accrued and unpaid interest on the Twelve

(12) month anniversary of the issuance date of the new “Odaira” Note, which is on January 20, 2021.

On April 5, 2020, the

Company entered into an exchange agreement with “Odaira”.

The aggregate principal amount plus accrued interest expenses were

$284,036, and the Company agreed to issue to the Holders an aggregate of 154,368 shares of the Company’s common stock, and warrants

to purchase 154,368 shares of the Company’s common stock.

These common shares have been issued during the year ended December 31,

On May 30 and July 10, 2019, the Company issued

two (2) twelve-month term unsecured convertible promissory notes (the “KSL Note”) in an aggregate principal amount of $ 250,000

to Kuo Sheng Lung (the “KSL”), pursuant to which the Company received $ 160,000 and $ 90,000 , respectively.

The KSL Note bears

interest at 20 % per annum.

The Company shall pay to KSL an amount in cash representing all outstanding principal and accrued and unpaid

interest on the Twelve (12) month anniversary of the issuance date of the KSL Note, which is on May 29, 2020 and July 9, 2020.

time from the issuance date until the KSL Note has been satisfied, the KSL may convert the unpaid and outstanding principal plus any accrued

On May 30 and July 10, 2019,

the Company issued two (2) twelve-month term unsecured convertible promissory notes (the “KSL Note”) in an aggregate principal

amount of $ 250,000 to Kuo Sheng Lung (the “KSL”), pursuant to which the Company received $ 160,000 and $ 90,000 , respectively.

The KSL Note bears interest at 20 % per annum.

The Company shall pay to KSL an amount in cash representing all outstanding principal and

accrued and unpaid interest on the Twelve (12) month anniversary of the issuance date of the KSL Note, which is on May 29, 2020 and July

At any time from the issuance date until the KSL Note has been satisfied, the KSL may convert the unpaid and outstanding principal

plus any accrued and unpaid interest and or default interest, if any, into shares of the Company’s common stock at a conversion

price (the “Conversion Price”) equal to the lower of (i) $0.50 per share (the “Fixed Conversion Price”), subject

to adjustment, or (ii) 70% of the per share offering price (the “Alternative Conversion Price”) of the completed public equity

offering of the Company in an amount exceeding $10,000,000 as stated on the registration statement on a Form S-1 filed with the Securities

and Exchange Commission on November 14, 2018 (the “Public Offering”), as amended from time to time.

In accordance with FASB

ASC 470-20, the Company recognized none of the intrinsic value of the embedded beneficial conversion feature present in the KSL Note.

On May 13, 2020, the Company received an acknowledgement letter from KSL that they will not claim the repayment of loan for 12 months.

On November 9, 2020, the Company entered into an agreement with “KSL”.

The aggregate principal amount plus accrued interest

expenses are $270,272, and KSL agreed to use the full amount to purchase certain securities pursuant to a securities purchase agreement;

KSL agreed to purchase and the Company agreed to issue 120,121 shares of the Company’s common stock and warrants for a purchase

price of $270,272.

During the year ended December 31, 2020, the Company issued to the Holders an aggregate of 120,121 shares of

the Company’s common stock.

On July 10, 2019, the Company

issued a twelve-month term unsecured convertible promissory note (the “NEA Note”) in an aggregate principal amount of $ 250,000

to New Eastern Asia (the “NEA”), a related party, pursuant to which the Company received $ 250,000 on July 10, 2019.

Note bears interest at 20 % per annum.

The Company shall pay to the NEA an amount in cash representing all outstanding principal and accrued

and unpaid interest on the Twelve (12) month anniversary of the issuance date of the NEA Note, which is on July 9, 2020.

from the date hereof until this NEA Note has been satisfied, the NEA may convert the unpaid and outstanding principal plus any accrued

and unpaid interest and or default interest, if any, into shares of the Company’s common stock at a conversion price (the “Conversion

Price”) equal to the lower of (i) $0.50 per share (the “Fixed Conversion Price”), subject to adjustment, or (ii) 70%

Price”) equal to the lower of (i) $.

50 per share (the “Fixed Conversion Price”), subject to adjustment, or (ii) 70 %

of the per share offering price (the “Alternative Conversion Price”) of the completed public equity offering of the Company

2 unchanged sentences

In accordance with FASB ASC 470-20, the Company

recognized none of the intrinsic value of the embedded beneficial conversion feature present in the KSL Note.

On May 13, 2020, the Company

received an acknowledgement letter from KSL that they will not claim the repayment of loan for 12 months.

On November 9, 2020, the Company

entered into an agreement with “KSL”.

The aggregate principal amount plus accrued interest expenses are $270,272, and KSL

agreed to use the full amount to purchase certain securities pursuant to a securities purchase agreement;

KSL agreed to purchase and the

Company agreed to issue 120,121 shares of the Company’s common stock and warrants for a purchase price of $270,272.

the year ended December 31, 2020, the Company issued to the Holders an aggregate of 120,121 shares of the Company’s common stock.

On July 10, 2019, the Company issued a twelve-month

term unsecured convertible promissory note (the “NEA Note”) in an aggregate principal amount of $ 250,000 to New Eastern Asia

(the “NEA”), a related party, pursuant to which the Company received $ 250,000 on July 10, 2019.

The NEA Note bears interest

recognized none of the intrinsic value of embedded beneficial conversion feature present in the NEA Note.

During the year ended December

31, 2020, the Company issued 111,112 shares of common stock to repay the outstanding balance.

On August 28, 2019, the Company

issued a twelve-month term unsecured convertible promissory note (the “KLS Note”) in an aggregate principal amount of $ 200,000

to Kuo Li Shen (the “KLS”), pursuant to which the Company received $ 200,000 on August 28, 2019.

The KLS Note bears interest

at 20 % per annum.

The Company shall pay to the NEA an amount in cash representing all outstanding principal and accrued and unpaid interest

on the Twelve (12) month anniversary of the issuance date of the NEA Note, which is on July 9, 2020.

The Company shall pay to the KLS an amount in cash representing all outstanding principal and accrued and unpaid interest

on the Twelve (12) month anniversary of the issuance date of the KLS Note, which is on August 27, 2020.

At any time from the date hereof

until this NEA Note has been satisfied, the NEA may convert the unpaid and outstanding principal plus any accrued and unpaid interest

until this KLS Note has been satisfied, the KLS may convert the unpaid and outstanding principal plus any accrued and unpaid interest

and or default interest, if any, into shares of the Company’s common stock at a conversion price (the “Conversion Price”)

4 unchanged sentences

In accordance with FASB ASC 470-20, the Company recognized none of

the intrinsic value of embedded beneficial conversion feature present in the NEA Note.

During the year ended December 31, 2020, the Company

issued 111,112 shares of common stock to repay the outstanding balance.

On August 28, 2019, the Company issued a twelve-month

term unsecured convertible promissory note (the “KLS Note”) in an aggregate principal amount of $ 200,000 to Kuo Li Shen (the

“KLS”), pursuant to which the Company received $ 200,000 on August 28, 2019.

The KLS Note bears interest at 20 % per annum.

The Company shall pay to the KLS an amount in cash representing all outstanding principal and accrued and unpaid interest on the Twelve

(12) month anniversary of the issuance date of the KLS Note, which is on August 27, 2020.

At any time from the date hereof until this

KLS Note has been satisfied, the KLS may convert the unpaid and outstanding principal plus any accrued and unpaid interest and or default

interest, if any, into shares of the Company’s common stock at a conversion price (the “Conversion Price”) equal to

the lower of (i) $.

50 per share (the “Fixed Conversion Price”), subject to adjustment, or (ii) 70% of the per share offering

price (the “Alternative Conversion Price”) of the completed public equity offering of the Company in an amount exceeding $10,000,000

as stated on the registration statement on a Form S-1 filed with the Securities and Exchange Commission on November 14, 2018 (the “Public

Offering”), as amended from time to time.

In accordance with FASB ASC 470-20, the Company recognized none of the intrinsic value

of embedded beneficial conversion feature present in the KLS Note.

On April 20, 2020, the Company entered into an exchange agreement with

The aggregate principal amount plus accrued interest expenses were $225,222, and the Company agreed to issue to the Holders an aggregate

of 126,530 shares of the Company’s common stock, and warrants to purchase 126,530 shares of common stock.

These common shares have

been issued during the year ended December 31, 2020

On September 4, 2019, the Company issued 3 twelve-month

term unsecured convertible promissory note (the “C.L.L.

Note”) in an aggregate principal amount of $ 257,500 to Chang Ping

Shan, Lin Shan Tyan, and Liu Ching Hsuan (together the “C.L.L.”), pursuant to which the Company received $ 257,500 on September

the intrinsic value of embedded beneficial conversion feature present in the KLS Note.

On April 20, 2020, the Company entered into an

exchange agreement with KLS.

The aggregate principal amount plus accrued interest expenses were $225,222, and the Company agreed to issue

to the Holders an aggregate of 126,530 shares of the Company’s common stock, and warrants to purchase 126,530 shares of common

These common shares have been issued during the year ended December 31, 2020

On September 4, 2019, the Company

issued 3 twelve-month term unsecured convertible promissory note (the “C.L.L.

Note”) in an aggregate principal amount of

$ 257,500 to Chang Ping Shan, Lin Shan Tyan, and Liu Ching Hsuan (together the “C.L.L.”), pursuant to which the Company received

$ 257,500 on September 4, 2019.

Chang Ping Shan and Liu Ching Hsuan are related parties to the Company.

Note bears interest at 20 % per annum.

Company shall pay to the C.L.L.

an amount in cash representing all outstanding principal and accrued and unpaid interest on the Twelve

(12) month anniversary of the issuance date of the C.L.L.

Note bears interest

at 20 % per annum.

The Company shall pay to the C.L.L.

an amount in cash representing all outstanding principal and accrued and unpaid

interest on the Twelve (12) month anniversary of the issuance date of the C.L.L.

Note, which is on September 3, 2020.

At any time from the date hereof until

At any time from

the date hereof until this C.L.L.

Note has been satisfied, the C.L.L.

may convert the unpaid and outstanding principal plus any accrued and unpaid interest

and or default interest, if any, into shares of the Company’s common stock at a conversion price (the “Conversion Price”)

equal to the lower of (i) $.50 per share (the “Fixed Conversion Price”), subject to adjustment, or (ii) 70% of the per share

offering price (the “Alternative Conversion Price”) of the completed public equity offering of the Company in an amount exceeding

$10,000,000 as stated on the registration statement on a Form S-1 filed with the Securities and Exchange Commission on November 14, 2018

(the “Public Offering”), as amended from time to time.

In accordance with FASB ASC 470-20, the Company recognized none of

the intrinsic value of embedded beneficial conversion feature present in the C.L.L.

On April 20, 2020, the Company entered into

an exchange agreement with C.L.L..

The aggregate principal amount plus accrued interest expenses were $289,974, and the Company agreed

to issue to the Holders an aggregate of 162,908 shares of the Company’s common stock, and warrants to purchase 162,908 shares of

common stock.

may convert the unpaid and outstanding principal plus any accrued

and unpaid interest and or default interest, if any, into shares of the Company’s common stock at a conversion price (the “Conversion

Price”) equal to the lower of (i) $.50 per share (the “Fixed Conversion Price”), subject to adjustment, or (ii) 70%

of the per share offering price (the “Alternative Conversion Price”) of the completed public equity offering of the Company

in an amount exceeding $10,000,000 as stated on the registration statement on a Form S-1 filed with the Securities and Exchange Commission

on November 14, 2018 (the “Public Offering”), as amended from time to time.

In accordance with FASB ASC 470-20, the Company

recognized none of the intrinsic value of embedded beneficial conversion feature present in the C.L.L.

On April 20, 2020, the Company

entered into an exchange agreement with C.L.L..

The aggregate principal amount plus accrued interest expenses were $289,974, and the

Company agreed to issue to the Holders an aggregate of 162,908 shares of the Company’s common stock, and warrants to purchase 162,908

shares of common stock.

These common shares have been issued during the year ended December 31, 2020

On October 29, 2019, the Company issued a twelve-month

term unsecured convertible promissory note (the “Lee Note”) in an aggregate principal amount of $ 250,000 to Hwalin Lee (the

“Lee”), a related party, pursuant to which the Company received $ 250,000 on October 29, 2019.

The Lee Note bears interest

at 20 % per annum.

The Company shall pay to the Lee an amount in cash representing all outstanding principal and accrued and unpaid interest

on the Twelve (12) month anniversary of the issuance date of the Lee Note, which is on October 28, 2020.

At any time from the date hereof

until this Lee Note has been satisfied, the Lee may convert the unpaid and outstanding principal plus any accrued and unpaid interest

and or default interest, if any, into shares of the Company’s common stock at a conversion price (the “Conversion Price”)

equal to the lower of (i) $.50 per share (the “Fixed Conversion Price”), subject to adjustment, or (ii) 70% of the per share

offering price (the “Alternative Conversion Price”) of the completed public equity offering of the Company in an amount exceeding

$10,000,000 as stated on the registration statement on a Form S-1 filed with the Securities and Exchange Commission on November 14, 2018

(the “Public Offering”), as amended from time to time.

In accordance with FASB ASC 470-20, the Company recognized none of

the intrinsic value of embedded beneficial conversion feature present in the Lee Note.

In January 2021, the Company paid off the convertible

promissory note of $306,836, including principal and accrued and unpaid interest expense.

On October 23, 2020, the Company entered into

a Securities Purchase Agreement (the “October SPA”) with one accredited investor.

Pursuant to the October SPA, the Company

sold and issued a convertible promissory note (the “October Note”) in the principal amount of $2,500,000 to the investor 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.

On May 17, 2021, the parties to the October SPA

signed Amendment No.

On October 29, 2019, the Company

issued a twelve-month term unsecured convertible promissory note (the “Lee Note”) in an aggregate principal amount of $ 250,000

to Hwalin Lee (the “Lee”), a related party, pursuant to which the Company received $ 250,000 on October 29, 2019.

Note bears interest at 20 % per annum.

The Company shall pay to the Lee an amount in cash representing all outstanding principal and accrued

and unpaid interest on the Twelve (12) month anniversary of the issuance date of the Lee Note, which is on October 28, 2020.

from the date hereof until this Lee Note has been satisfied, the Lee may convert the unpaid and outstanding principal plus any accrued

and unpaid interest and or default interest, if any, into shares of the Company’s common stock at a conversion price (the “Conversion

Price”) equal to the lower of (i) $.50 per share (the “Fixed Conversion Price”), subject to adjustment, or (ii) 70%

of the per share offering price (the “Alternative Conversion Price”) of the completed public equity offering of the Company

in an amount exceeding $10,000,000 as stated on the registration statement on a Form S-1 filed with the Securities and Exchange Commission

on November 14, 2018 (the “Public Offering”), as amended from time to time.

In accordance with FASB ASC 470-20, the Company

recognized none of the intrinsic value of embedded beneficial conversion feature present in the Lee Note.

In January 2021, the Company

paid off the convertible promissory note of $306,836, including principal and accrued and unpaid interest expense.

On October 23, 2020, the Company

entered into a Securities Purchase Agreement (the “October SPA”) with one accredited investor.

Pursuant to the October SPA,

the Company sold and issued a convertible promissory note (the “October Note”) in the principal amount of $2,500,000 to the

investor 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”).

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

On July 21, 2021, The Company converted all convertible promissory note amounted $ 2,500,000 into 1,111,112 shares of the

Company’s common stock and warrants.

As of June 30, 2022 and December 31, 2021, the

aggregate carrying values of the convertible debentures were both $ 0 ;

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 all convertible promissory note amounted $ 2,500,000 into

1,111,112 shares of the Company’s common stock and warrants.

As of September 30, 2022 and

December 31, 2021, the aggregate carrying values of the convertible debentures were both $ 0 ;

and accrued convertible interest were both

Total interest expenses in connection with the

above convertible note payable were $ 0 and $ 62,500 for the three months ended June 30, 2022 and 2021, respectively.

Total interest expenses in connection with the

above convertible note payable were $ 0 and $ 129,397 for the six months ended June 30, 2022 and 2021, respectively.

Total interest expenses in connection

with the above convertible note payable were $ 0 and $ 20,833 for the three months ended September 30, 2022 and 2021, respectively.

Total interest expenses in connection

with the above convertible note payable were $ 0 and $ 150,230 for the nine months ended September 30, 2022 and 2021, respectively.

Short-term bank loan consists of the following:

September 30,

Cathay United Bank

On June 28, 2016, BioLite Taiwan and Cathay United

Bank entered into a one-year bank loan agreement (the “Cathay United Loan Agreement”) in an amount of NT$ 7,500,000 , equivalent

to $ 252,000 .

On June 28, 2016, BioLite Taiwan and Cathay United Bank entered into

a one-year bank loan agreement (the “Cathay United Loan Agreement”) in an amount of NT$ 7,500,000 , equivalent to $ 236,250 .

The term started June 28, 2016 with maturity date at June 28, 2017 .

The loan balance bears interest at a floating rate of

prime rate plus 1.15 %.

The loan balance bears interest at a floating rate of prime rate plus

The prime rate is based on term deposit saving interest rate of Cathay United Bank.

On September 6, 2017, BioLite

Taiwan extended the Cathay United Loan Agreement for one year , which was due on September 6, 2018, with the principal amount of NT$ 7,500,000 ,

equivalent to $ 252,000 .

On October 1, 2018, BioLite Taiwan extended the Cathay United Loan Agreement with the same principal amount of

NT$ 7,500,000 , equivalent to $ 252,000 for one year , which was due on September 6, 2019.

On September 6, 2019, BioLite Taiwan extended the

Cathay United Loan Agreement with the same principal amount of NT$ 7,500,000 , equivalent to $ 252,000 for one year , which is due on September

On September 6, 2020, BioLite Taiwan extended the Cathay United Loan Agreement with the same principal amount of NT$ 7,500,000 ,

equivalent to $ 252,000 for one year , which is due on September 6, 2021.

On September 6, 2017, BioLite Taiwan extended

the Cathay United Loan Agreement for one year , which was due on September 6, 2018, with the principal amount of NT$ 7,500,000 , equivalent

to $ 236,250 .

On October 1, 2018, BioLite Taiwan extended the Cathay United Loan Agreement with the same principal amount of NT$ 7,500,000 ,

equivalent to $ 236,250 for one year , which was due on September 6, 2019.

On September 6, 2019, BioLite Taiwan extended the Cathay United

Loan Agreement with the same principal amount of NT$ 7,500,000 , equivalent to $ 236,250 for one year , which is due on September 6, 2020.

As of June 30, 2022 and December 31, 2021, the effective interest rates per annum was 2.38 % and 2.10 %, respectively.

is collateralized by the building and improvement of BioLite Taiwan, and is also personal guaranteed by the Company’s chairman.

Interest expenses were $ 1,469 and $ 1,421 for the

three months ended June 30, 2022 and 2021, respectively.

Interest expenses were $ 2,855 and $ 2,804 for the

six months ended June 30, 2022 and 2021, respectively.

On June 12, 2017 and July 19, 2017, BioLite Taiwan

and CTBC Bank entered into short-term saving secured bank loan agreements (the “CTBC Loan Agreements”) in an amount of NT$ 10,000,000 ,

equivalent to $ 336,000 , and NT$ 10,000,000 , equivalent to $ 336,000 , respectively.

On September 6, 2020, BioLite Taiwan extended the Cathay United Loan Agreement with the same principal amount of NT$ 7,500,000 , equivalent

to $ 236,250 for one year , which is due on September 6, 2021.

On September 6, 2021, BioLite Taiwan extended the Cathay United Loan Agreement

with the same principal amount of NT$ 7,500,000 , equivalent to $ 236,250 for one year , which is due on September 6, 2022.

6, 2022, BioLite Taiwan extended the Cathay United Loan Agreement with the same principal amount of NT$ 7,500,000 , equivalent to $ 236,250 for one

year , which is due on September 6, 2023.

As of September 30, 2022 and December 31, 2021, the effective interest rates per annum

was 2.54 % and 2.10 %, respectively.

The loan is collateralized by the building and improvement of BioLite Taiwan, and is also personal

guaranteed by the Company’s chairman.

Interest expenses were $ 1,604

and $ 1,417 for the three months ended September 30, 2022 and 2021, respectively.

Interest expenses were $ 4,401

and $ 4,221 for the nine months ended September 30, 2022 and 2021, respectively.

On June 12, 2017 and July 19, 2017, BioLite Taiwan and CTBC Bank entered

into short-term saving secured bank loan agreements (the “CTBC Loan Agreements”) in an amount of NT$ 10,000,000 , equivalent

to $ 315,000 , and NT$ 10,000,000 , equivalent to $ 315,000 , respectively.

Both two loans with the same maturity date at January 19, 2018 .

In February 2018, BioLite Taiwan combined two loans and extended the loan contract with CTBC for one year .

On January 18, 2019,

BioLite Taiwan and CTBC Bank agreed to extend the loan with a new maturity date, which was July 18, 2019.

On July 18, 2019, BioLite Taiwan

extended the CTBC Loan Agreement with the same principal amount of NT$ 20,000,000 , equivalent to $ 672,000 for six months , which is due

on January 17, 2020.

On January 19, 2020, BioLite Taiwan extended the CTBC Loan Agreement with the same principal amount of NT$ 20,000,000 ,

equivalent to $ 672,000 for six months , which is due on July 19, 2020.

On July 17, 2020, BioLite Taiwan extended the CTBC Loan Agreement

with the same principal amount of NT$ 20,000,000 , equivalent to $ 672,000 for six months , which is due on January 15, 2021.

On January 18, 2019, BioLite

Taiwan and CTBC Bank agreed to extend the loan with a new maturity date, which was July 18, 2019 .

On July 18, 2019, BioLite Taiwan extended

the CTBC Loan Agreement with the same principal amount of NT$ 20,000,000 , equivalent to $ 630,000 for six months, which is due on January

On January 19, 2020, BioLite Taiwan extended the CTBC Loan Agreement with the same principal amount of NT$ 20,000,000 , equivalent

to $ 630,000 for six months, which is due on July 19, 2020.

On July 17, 2020, BioLite Taiwan extended the CTBC Loan Agreement with the

same principal amount of NT$ 20,000,000 , equivalent to $ 630,000 for six months, which is due on January 15, 2021.

On January 15, 2021,

2021, BioLite Taiwan extended the CTBC Loan Agreement with the same principal amount of NT$ 20,000,000 , equivalent to $ 672,000 for six

months , which is due on July 15, 2021.

On July 15, 2021, BioLite Taiwan extended the CTBC Loan Agreement with the same principal amount

of NT$ 20,000,000 , equivalent to $ 672,000 for six months , which is due on January 14, 2022.

On January 14, 2022, BioLite Taiwan extended

the CTBC Loan Agreement with the same principal amount of NT$ 20,000,000 , equivalent to $ 672,000 for six months, which is due on July 14,

BioLite Taiwan extended the CTBC Loan Agreement with the same principal amount of NT$ 20,000,000 , equivalent to $ 630,000 for six months,

which is due on July 15, 2021.

On July 15, 2021, BioLite Taiwan extended the CTBC Loan Agreement with the same principal amount of NT$ 20,000,000 ,

equivalent to $ 630,000 for six months, which is due on January 14, 2022.

On January 14, 2022, BioLite Taiwan extended the CTBC Loan Agreement

with the same principal amount of NT$ 20,000,000 , equivalent to $ 630,000 for six months, which is due on July 14, 2022.

On July 14, 2022,

BioLite Taiwan extended the CTBC Loan Agreement with the same principal amount of NT$ 20,000,000 , equivalent to $ 630,000 for six months,

which is due on January 14, 2023.

The loan balances bear interest at a fixed rate of 2.00 % per annum.

The loan is secured by the money deposited in a savings account

with the CTBC Bank.

The loan is secured by the

money deposited in a savings account with the CTBC Bank.

This loan was also personal guaranteed by the Company’s chairman and BioFirst.

During the year ended December

31, 2020, BioLite Taiwan has opened a TCD account with CTBC bank to guarantee the loan going forward.

Interest expenses were $ 2,873 and $ 3,032 for the

three months ended June 30, 2022 and 2021, respectively.

Interest expenses were $ 5,830 and $ 5,981 for the

six months ended June 30, 2022 and 2021, respectively.

On January 21, 2019, the Company received a loan

in the amount of $ 500,000 from Cathay Bank (the “Bank”) pursuant to a business loan agreement (the “Loan Agreement”)

entered by and between the Company and Bank on January 8, 2019 and a promissory note (the “Note”) executed by the Company

on the same day.

The Loan Agreement provides for a revolving line of credit in the principal amount of $ 1,000,000 with a maturity date

(the “Maturity Date”) of January 1, 2020.

The Note executed in connection with the Loan Agreement bears an interest rate (the

“Regular Interest Rate”) equal to the sum of one percent (1%) and the prime rate as published in the Wall Street Journal (the

“Index”) and the accrued interest shall become payable each month from February 1, 2019.

Pursuant to the Note, the Company

shall pay the entire outstanding principal plus accrued unpaid interest on the Maturity Date and may prepay portion or all of the Note

before the Maturity Date without penalty.

If the Company defaults on the Note, the default interest rate shall become five percent (5%)

plus the Regular Interest Rate.

In connection with the Note and Loan Agreement,

on January 8, 2019, each of Dr.

During the year ended December 31, 2020, BioLite Taiwan has opened a TCD account with CTBC bank to guarantee the loan going forward.

Interest expenses were $ 3,289

and $ 3,023 for the three months ended September 30, 2022 and 2021, respectively.

Interest expenses were $ 9,002

and $ 9,005 for the nine months ended September 30, 2022 and 2021, respectively.

On January 21, 2019, the Company

received a loan in the amount of $ 500,000 from Cathay Bank (the “Bank”) pursuant to a business loan agreement (the “Loan

Agreement”) entered by and between the Company and Bank on January 8, 2019 and a promissory note (the “Note”) executed

by the Company on the same day.

The Loan Agreement provides for a revolving line of credit in the principal amount of $ 1,000,000 with

a maturity date (the “Maturity Date”) of January 1, 2020.

The Note executed in connection with the Loan Agreement bears an

interest rate (the “Regular Interest Rate”) equal to the sum of one percent (1%) and the prime rate as published in the Wall

Street Journal (the “Index”) and the accrued interest shall become payable each month from February 1, 2019.

the Note, the Company shall pay the entire outstanding principal plus accrued unpaid interest on the Maturity Date and may prepay portion

or all of the Note before the Maturity Date without penalty.

If the Company defaults on the Note, the default interest rate shall become

five percent (5%) plus the Regular Interest Rate.

In connection with the Note and

Loan Agreement, on January 8, 2019, each of Dr.

Tsung Shann Jiang and Dr.

George Lee, executed a commercial guaranty (the “Guaranty”) to guaranty

the loans for the Company pursuant to the Loan Agreement and Note, severally and individually, in the amount not exceeding $ 500,000 each

until the entire Note plus interest are fully paid and satisfied.

Tsung Shann Jiang is the Chairman and Chief Executive Officer of

BioLite Holding, Inc.

George Lee, executed a commercial guaranty (the “Guaranty”)

to guaranty the loans for the Company pursuant to the Loan Agreement and Note, severally and individually, in the amount not exceeding

$ 500,000 each until the entire Note plus interest are fully paid and satisfied.

Tsung Shann Jiang is the Chairman and Chief Executive

Officer of BioLite Holding, Inc.

George Lee serves as the Chairman of the board of directors of BioKey.

On December 29, 2020, the Company

entered into a new loan extension agreement and assignment of deposit account with the Bank, which allowed Dr.

Tsung Shann Jiang and Dr.

On December 29, 2020,

the Company entered into a new loan extension agreement and assignment of deposit account with the Bank, which allowed Dr.

Jiang and Dr.

George Lee to be removed as guarantees from the list of Guaranty.

In addition, on January 8, 2019, each of the Company

and BioKey, a wholly-owned subsidiary of the Company, signed a commercial security agreement (the “Security Agreement”) to

secure the loans under the Loan Agreement and the Note.

In addition, on January 8, 2019, each of the Company and BioKey, a

wholly-owned subsidiary of the Company, signed a commercial security agreement (the “Security Agreement”) to secure the loans

under the Loan Agreement and the Note.

Pursuant to the Security Agreements, each of the Company and BioKey (each, a “Grantor”,

9 unchanged sentences

for twelve months, which is due on October 30, 2022.

On September 30, 2021, the Cathay Bank has increased the line of credit to $ 1,000,000

from $ 650,000 .

As of June 30, 2022 and December 31, 2021, the effective interest rates per annum was 5.25 % and 3.75 %, respectively and

the outstanding loan balance were both $ 650,000 .

Interest expenses were $ 7,340 and $ 3,970 for the

three months ended June 30, 2022 and 2021, respectively.

Interest expenses were $ 13,429 and $ 7,897 for

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

On September 24, 2021, the Cathay Bank has increased the line of credit

to $ 1,000,000 from $ 650,000 .

As of September 30, 2022 and December 31, 2021, the effective interest rates per annum was 6.25 %

and 3.75 %, respectively and the outstanding loan balance were $ 1,000,000 and $650,000.

Interest expenses were $ 12,446

and $ 4,014 for the three months ended September 30, 2022 and 2021, respectively.

Interest expenses were

$ 28,109 and $ 11,911 for the nine months ended September 30, 2022 and 2021, respectively.

PAYCHECK PROTECTION PROGRAM LOAN PAYABLE

On April 14, 2020, the Company received a loan

in the amount of $ 124,400 under the Paycheck Protection Program (“PPP”) administered by the United States Small Business Administration

(the “SBA”) from East West Bank.

According to the Coronavirus Aid, Relief, and Economic Security Act (the “Cares Act”),

PPP loan provides for forgiveness of up to the full principal amount and accrued interest if the funds are used for payroll costs, interest

on mortgages, rent, and utilities.

However, at least 60 % of the forgiven amount must have been used for payroll.

The loan was granted pursuant to a promissory

note dated April 14, 2020 issued by the Company, which matures on April 13, 2022 and bears interest at a rate of 1.00% per annum.

Company will pay the principal in one payment of all outstanding principal plus all accrued unpaid interest on that date that is two years

after the date of the promissory note.

In addition, the Company will pay regular monthly payments in an amount equal to one month’s

accrued interest commencing on the date that is seven months after the date of the promissory note, with all subsequent interest payments

to be due on the same day of each month after that.

On April 14, 2020, the Company

received a loan in the amount of $ 124,400 under the Paycheck Protection Program (“PPP”) administered by the United States

Small Business Administration (the “SBA”) from East West Bank.

According to the Coronavirus Aid, Relief, and Economic Security

Act (the “Cares Act”), PPP loan provides for forgiveness of up to the full principal amount and accrued interest if the funds

are used for payroll costs, interest on mortgages, rent, and utilities.

However, at least 60 % of the forgiven amount must have been used

The loan was granted pursuant

to a promissory note dated April 14, 2020 issued by the Company, which matures on April 13, 2022 and bears interest at a rate of 1.00%

The Company will pay the principal in one payment of all outstanding principal plus all accrued unpaid interest on that date

that is two years after the date of the promissory note.

In addition, the Company will pay regular monthly payments in an amount equal

to one month’s accrued interest commencing on the date that is seven months after the date of the promissory note, with all subsequent

interest payments to be due on the same day of each month after that.

No collateral or personal guarantees are required.

On January 29, 2021, BioKey received a loan in

the amount of $ 132,331 under the Paycheck Protection Program administered by the United States Small Business Administration from East

According to the Coronavirus Aid, Relief, and Economic Security Act, PPP loan provides for forgiveness of up to the full principal

amount and accrued interest if the funds are used for payroll costs, interest on mortgages, rent, and utilities.

However, at least 60 %

of the forgiven amount must have been used for payroll.

The loan was granted pursuant to a promissory note dated January 27, 2021 issued

by the Company, which matures on January 28, 2026 and bears interest at a rate of 1.00% per annum.

The Company will pay the principal

in one payment of all outstanding principal plus all accrued unpaid interest on that date that is five years after the date of the promissory

On January 29, 2021, BioKey received

a loan in the amount of $ 132,331 under the Paycheck Protection Program administered by the United States Small Business Administration

from East West Bank.

According to the Coronavirus Aid, Relief, and Economic Security Act, PPP loan provides for forgiveness of up to

the full principal amount and accrued interest if the funds are used for payroll costs, interest on mortgages, rent, and utilities.

at least 60 % of the forgiven amount must have been used for payroll.

The loan was granted pursuant to a promissory note dated January

27, 2021 issued by the Company, which matures on January 28, 2026 and bears interest at a rate of 1.00% per annum.

The Company will pay

the principal in one payment of all outstanding principal plus all accrued unpaid interest on that date that is five years after the

date of the promissory note.

No collateral or personal guarantees are required.

On February 7, 2021, the Company received a loan

in the amount of $ 104,167 under the Paycheck Protection Program administered by the United States Small Business Administration from Cathay

According to the Coronavirus Aid, Relief, and Economic Security Act, PPP loan provides for forgiveness of up to the full principal

amount and accrued interest if the funds are used for payroll costs, interest on mortgages, rent, and utilities.

However, at least 60 %

of the forgiven amount must have been used for payroll.

The loan was granted pursuant to a promissory note dated February 7, 2021 issued

by the Company, which matures on February 6, 2026 and bears interest at a rate of 1.00 % per annum.

The Company will pay the principal

in one payment of all outstanding principal plus all accrued unpaid interest on that date that is five years after the date of the promissory

On February 7, 2021, the Company

received a loan in the amount of $ 104,167 under the Paycheck Protection Program administered by the United States Small Business Administration

from Cathay Bank.

According to the Coronavirus Aid, Relief, and Economic Security Act, PPP loan provides for forgiveness of up to the

full principal amount and accrued interest if the funds are used for payroll costs, interest on mortgages, rent, and utilities.

at least 60 % of the forgiven amount must have been used for payroll.

The loan was granted pursuant to a promissory note dated February

7, 2021 issued by the Company, which matures on February 6, 2026 and bears interest at a rate of 1.00 % per annum.

The Company will pay

the principal in one payment of all outstanding principal plus all accrued unpaid interest on that date that is five years after the

date of the promissory note.

No collateral or personal guarantees are required.

PPP loan Forgiveness

On February 27, 2021, the Company submitted all

required documents, such as application form and use of funds, to East West Bank for the application of forgiveness.

from East West Bank of $ 124,400 and $ 132,331 was forgiven by the SBA as a gesture of supporting the operation of the Company on March

15, 2021 and September 28, 2021, respectively.

On September 23, 2021, the Company submitted the

required documents, such as application form and use of funds, to Cathay Bank for the application of forgiveness.

The PPP loan from

Cathay Bank of $ 104,167 was forgiven by the SBA as a gesture of supporting the operation of the Company on November 15, 2021.

As a result, the Company recorded the forgiveness

of the PPP loans as government grant income in the aggregate amount of $ 360,898 during the year ended December 31, 2021.

As of June 30,

2022, there was no outstanding balance payable to the bank.

On February 27, 2021, the Company

submitted all required documents, such as application form and use of funds, to East West Bank for the application of forgiveness.

The PPP loan from East West Bank of $ 124,400 and $ 132,331 was forgiven by the SBA as a gesture of supporting the operation of the Company

on March 15, 2021 and September 28, 2021, respectively.

On September 23, 2021, the Company

submitted the required documents, such as application form and use of funds, to Cathay Bank for the application of forgiveness.

The PPP loan from Cathay Bank of $ 104,167 was forgiven by the SBA as a gesture of supporting the operation of the Company on November

As a result, the Company recorded

the forgiveness of the PPP loans as government grant income in the aggregate amount of $ 360,898 during the year ended December 31, 2021.

As of September 30, 2022, there was no outstanding balance payable to the bank.

NOTES PAYABLE

In January, 2019, BioLite Taiwan entered an unsecured

loan agreement with one individual bearing interest at fixed rates at 12% per annum of NT$3,000,000, equivalent to $106,800, for working

capital purpose.

In January, 2019, BioLite Taiwan

entered an unsecured loan agreement with one individual bearing interest at fixed rates at 12% per annum of NT$3,000,000, equivalent

to $94,500, for working capital purpose.

On September 11, 2021 the outstanding balance has been repaid in full.

As of June 30, 2022 and December 31, 2021, the

balance due to this individual amounted to both $ 0 .

Interest expense were $ 0 and $ 3,222 for the three months ended June 30, 2022

As of September 30,

2022 and December 31, 2021, the balance due to this individual amounted to both $ 0 .

Interest expense were $ 0 and $ 2,142 for the

three months ended September 30, 2022 and 2021, respectively.

Interest expense were $ 0 and $ 8,568 for the nine months ended September

30, 2022 and 2021, respectively.

Interest expense were $ 0 and $ 6,426 for the six months ended June 30, 2022 and 2021, respectively.

SHORT-TERM LOAN

On February 18, 2020, the Company entered an unsecured

loan agreement with a third-party in the amount of $ 100,000 .

This loan bears the interest rate of 1.5 % per annum and will be matured on

August 17, 2020.

On August 18, 2020, the Company extended the contract for six months under the same term.

On February 18, 2020, the Company

extended the contract for six months under the same term.

On August 26, 2021, the loan with interest has been repaid in full.

interest expense were both $ 0 as of June 30, 2022 and December 31, 2021.

entered an unsecured loan agreement with a third-party in the amount of $ 100,000 .

This loan bears the interest rate of 1.5 % per annum

and will be matured on August 17, 2020.

On August 18, 2020, the Company extended the contract for six months under the same term.

February 18, 2021, the Company extended the contract for six months under the same term.

On August 26, 2021, the loan with interest has

been repaid in full.

Accrued interest expense were both $ 0 as of September 30, 2022 and December 31, 2021.

RELATED PARTIES TRANSACTIONS

The related parties of the company with whom transactions

are reported in these financial statements are as follows:

Name of entity or Individual

Relationship with the Company and its subsidiaries

The related parties of the company

with whom transactions are reported in these financial statements are as follows:

Name of entity or

with the Company and its subsidiaries

BioFirst Corporation (the “BioFirst”)

6 unchanged sentences

Shareholder of the Company;

Entity controlled by controlling

beneficiary shareholder of YuanGene;

Entity controlled by controlling beneficiary shareholder of YuanGene;

the Chairman of Rgene is Mr.

51 unchanged sentences

Tsung-Shann Jiang

Accounts receivable - related parties

Accounts receivable due from related parties consisted

of the following as of the periods indicated:

Accounts receivable - related

Accounts receivable due from

related parties consisted of the following as of the periods indicated:

September 30,

GenePharm Inc.

the third quarter of 2022, the Company made an impairment to write off the long-due balance

from GenePharm Inc.

as it existed over 1 year.

Due from related parties

Amount due from related parties consisted of the

following as of the periods indicated:

Amount due from related parties

consisted of the following as of the periods indicated:

Due from related party - Current

September 30,

Due from related parties – Non-Current

September 30,

BioFirst (Australia)

1 unchanged sentence

BioLite Japan

(1) As of June 30, 2022, and December 31, 2021, the Company has advanced an aggregate amount of $ 547,525 and $ 49,110 to Rgene for working capital purpose.

Under the terms of the loan agreement, the loan bears interest at 1% per month (or equivalent to 12% per annum) .

As of June 30, 2022, and December 31, 2021, the outstanding loan balance was $ 531,384 and $ 33,520 , which including the loan agreement signed in June 2022 amounted $ 500,000 , according to the agreement, the Company provided a one-year convertible loan with a principal amount of $ 1,000,000 to Rgene which bears interest at 5% per annum for the use of working capital that, if fully converted, would result in ABVC owning an additional 6.4% of Rgene.

Rgene will repay the Company in two equal installments in the second and third quarter of fiscal 2022.

The Company may convert the Note at any time into shares of Rgene’s common stock at either (i) a fixed conversion price equal to $ 1.00 per share or (ii) 20 % discount of the stock price of the then most recent offering, whichever is lower;

the conversion price is subject to adjustment as set forth in the Note.

The Note includes standard events of default, as well as a cross default provision pursuant to which a breach of the Service Agreement will trigger an event of default under the convertible note if not cured after 5 business days of written notice regarding the breach is provided.

Upon an event of default, the outstanding principal and any accrued and unpaid interest shall be immediately due and payable.

Rgene has further agreed, effective July 1, 2022, to provide a seat on the Rgene Board of Directors for Dr.

Tsung-Shann Jiang until the loan is repaid in full;

and accrued interest was $ 14,582 and $ 13,701 , respectively.

On January 1, 2021, BioLite Taiwan entered into a consultant services agreement with Rgene, of which the amount due from Rgene was $ 1,559 and $ 1,889 as of June 30, 2022 and December 31, 2021, respectively.

(2) In 2021, the Company and BioFirst entered into several loan agreements for a total amount of $ 465,000 to meet its working capital needs.

All the loans period was twelve months and all with an interest rate of 6.5% per annum.

In 2022, the Company and BioFirst entered into several loan agreements for a total amount of $ 1,348,000 to meet its working capital needs.

All the loans period was twelve months and with an interest rate of 6.5 % per annum.

As of June 30, 2022, and December 31, 2021, the outstanding loan balance was $ 1,813,000 and $ 465,000 ;

and accrued interest was $ 51,652 and $ 2,325 , respectively.

In 2021, the Company and BioFirst entered into a c ollaborative agreement to allocate R&D cost, of which the amount due from BioFirst was $ 8,783 and $ 1,110 as of June 30, 2022 and December 31, 2021, respectively.

(3) On July 1, 2020, the Company entered into a loan agreement with BioFirst (Australia) for $ 361,487 to properly record R&D cost and tax refund allocation based on co-development contract executed on July 24, 2017.

The loan was originally set to be mature on September 30, 2021 with an interest rate of 6.5 % per annum, but $ 249,975 of which has been settled in July 2021.

On September 7, 2021, the Company entered into a loan agreement with BioFirst (Australia) for $ 67,873 to meet its new project needs.

On December 1, 2021, the Company entered into a loan agreement with BioFirst (Australia) for $ 250,000 to increase the cost for upcoming projects.

The loan will be matured on November 30, 2022 with an interest rate of 6.5 % per annum.

In 2022, the Company entered into several loan agreements with BioFirst (Australia) for a total amount of $ 507,000 to increase the cost for upcoming projects.

All the loans period was twelve months with an interest rate of 6.5 % per annum.

As of June 30, 2022 and December 31, 2021, the aggregate amount of outstanding loan and accrued interest and allocated research fee was $ 1,023,434 and $ 491,816 , respectively.

of September 30, 2022, and December 31, 2021, the Company has advanced an aggregate amount of $ 500,000 and $ 0 as current amount due from

related party, and $ 1,480 and $ 49,110 to Rgene as non-current amount due from related party for working capital purpose.

Under the terms

of the loan agreement, the loan bears interest at 1 % per month (or equivalent to 12 % per annum).

As of September 30, 2022, and December

31, 2021, the outstanding loan balance was $ 501,480 and $ 33,520 , which including the loan agreement signed in June 2022 amounted $ 500,000 ,

according to the agreement, the Company provided a one-year convertible loan with a principal amount of $ 1,000,000 to Rgene which bears

interest at 5 % per annum for the use of working capital that, if fully converted, would result in ABVC owning an additional 6.4 % of Rgene.

The Company may convert the Note at any time into shares of Rgene’s common stock at either (i) a fixed conversion price equal to

$1.00 per share or (ii) 20% discount of the stock price of the then most recent offering, whichever is lower;

the conversion price is

subject to adjustment as set forth in the Note.

The Note includes standard events of default, as well as a cross default provision pursuant

to which a breach of the Service Agreement will trigger an event of default under the convertible note if not cured after 5 business

days of written notice regarding the breach is provided.

The Company is expected to receive the outstanding loan from the related party

by the end of 2022, either by cash or conversion of shares of Rgene.

On January 1, 2021, BioLite Taiwan entered into a consultant services

agreement with Rgene.

The outstanding amount was settled during September 2022, and the amount due from Rgene was $ 0 and $ 1,889 as of

September 30, 2022 and December 31, 2021, respectively.

July 1, 2020, the Company entered into a loan agreement with BioFirst (Australia) for $ 361,487 to properly record R&D cost and tax

refund allocation based on co-development contract executed on July 24, 2017.

The loan was originally set to be mature on September 30,

2021 with an interest rate of 6.5 % per 2annum, but $ 249,975 of which has been settled in July 2021.

On September 7, 2021, the Company

entered into a loan agreement with BioFirst (Australia) for $ 67,873 to meet its new project needs.

On December 1, 2021, the Company entered

into a loan agreement with BioFirst (Australia) for $ 250,000 to increase the cost for upcoming projects.

The loan will be matured on

November 30, 2022 with an interest rate of 6.5 % per annum.

In 2022, the Company entered into several loan agreements with BioFirst (Australia)

for a total amount of $ 507,000 to increase the cost for upcoming projects.

All the loans period was twelve months with an interest rate

of 6.5 % per annum.

As of September 30, 2022 and December 31, 2021, the aggregate amount of outstanding loan and accrued interest and

allocated research fee was $ 1,038,775 and $ 491,816 , respectively.

The Company is expected to receive the outstanding amount in full by

the end of 2022.

(3) On February 24, 2015, BioLite Taiwan and BioHopeKing Corporation (the “BHK”) entered into a co-development agreement, (the “BHK Co-Development Agreement”, see Note 3).

1 unchanged sentence

Under the term of the agreement, BioLite issued relevant development cost to BHK.

As of June 30, 2022 and December 31, 2021, due from BHK was $ 116,640 and $ 124,972 , respectively.

(5) On February 27, 2019, the Company has advanced funds to LBG USA for working capital purpose.

The advances bear 0 % interest rate and are due on demand.

As of June 30, 2022 and December 31, 2021, the outstanding advance balances was $ 675 and $ 675 , respectively.

(6) On May 8, 2020, the Company and Lucidaim entered into a Letter of Intent (LOI) in regard to a potential joint venture of BioLite Japan.

Based on the LOI, each party will advance an aggregated amount of $150,000 to meet BioLite Japan’s working capital needs, which the Company advanced an amount of $150,000 and the advance bear 0% interest rate.

As of June 30, 2022 and December 31, 2021, the outstanding advance balances was $ 150,000 and $ 150,000 , respectively.

(7) On October 31, 2020, the Company has advanced an aggregate amount of $1,610 to Keypoint for working capital purpose.

Under the terms of the loan agreement, the loan bears interest at 6.5% per annum and the loan will be matured on October 30, 2021.

As of June 30, 2022 and December 31, 2021, the outstanding loan balance was $ 1,610 and $ 1,610 , respectively.

As of September 30, 2022 and December 31, 2021, due from BHK was $ 0 and $ 124,972 , respectively.

The Company made an impairment to write off the amount due from BHK.

February 27, 2019, the Company has advanced funds to LBG USA for working capital purpose.

The advances bear 0 % interest rate and are

due on demand.

As of September 30, 2022 and December 31, 2021, the outstanding advance balances was $ 0 and $ 675 , respectively.

made an impairment to write off the amount due from LBG USA.

May 8, 2020, the Company and Lucidaim entered into a Letter of Intent (LOI) in regard to a potential joint venture of BioLite Japan.

Based on the LOI, each party will advance an aggregated amount of $150,000 to meet BioLite Japan’s working capital needs, which

the Company advanced an amount of $150,000 and the advance bear 0% interest rate.

As of September 30, 2022 and December 31, 2021, the

outstanding advance balances was $ 150,000 and $ 150,000 , respectively.

The Company is expected to receive the outstanding amount by the

October 31, 2020, the Company has advanced an aggregate amount of $1,610 to Keypoint for working capital purpose.

Under the terms of

the loan agreement, the loan bears interest at 6.5% per annum and the loan will be matured on October 30, 2021.

As of September 30, 2022

and December 31, 2021, the outstanding loan balance was $ 0 and $ 1,610 , respectively.

The Company made an impairment to write off the

amount due from Keypoint.

Due to related parties

Amount due to related parties consisted of the

following as of the periods indicated:

Amount due to related parties

consisted of the following as of the periods indicated:

September 30,

BioFirst Corporation

3 unchanged sentences

The advances bear interest 1% per month (or equivalent to 12% per annum).

As of June 30, 2022 and December 31, 2021, the aggregate amount of outstanding balance and accrued interest is $ 40,878 .

(2) As of June 30, 2022, and December 31, 2021, BioFirst (Australia) has advanced the Company an aggregate amount of $ 211,147 and $ 132,443 , respectively for new project purpose.

(3) As of June 30, 2022, and December 31, 2021, AsiaGene has advanced the Company an aggregate amount of $ 24,017 for working capital purpose.

As of September 30, 2022 and December 31, 2021, the aggregate amount of outstanding balance and accrued interest is $ 40,878 .

(2) As of September 30, 2022, and December 31, 2021, BioFirst (Australia) has advanced the Company an aggregate amount of $ 211,147 and $ 132,443 , respectively for new project purpose.

(3) As of September 30, 2022, and December 31, 2021, AsiaGene has advanced the Company an aggregate amount of $ 24,017 for working capital purpose.

This advance bears 0 % interest rate and is due on demand.

(4) As of June 30, 2022, and December 31, 2021, YuanGene has advanced the Company an aggregate amount of $ 9,205 for working capital purpose.

(4) As of September 30, 2022, and December 31, 2021, YuanGene has advanced the Company an aggregate amount of $ 9,205 for working capital purpose.

This advance bears 0 % interest rate and is due on demand.

(5) Since 2019, the Jiangs advanced funds to the Company for working capital

As of June 30, 2022, and December 31, 2021, the outstanding balance due to the Jiangs amounted to $ 19,789 and $ 18,750 , respectively.

(5) Since 2019, the Jiangs advanced funds to the Company for working capital purpose.

As of September 30, 2022, and December 31, 2021, the outstanding balance due to the Jiangs amounted to $ 19,789 and $ 18,750 , respectively.

These loans bear interest rate of 0 % to 1 % per month, and are due on demand.

1 unchanged sentence

The advances bear interest rate of 12% per annum.

As of June 30, 2022 and December 31, 2021, the outstanding principal and accrued interest was $ 156,576 and $ 168,131 , respectively.

Interest expenses in connection with these loans were $ 5,401 and $ 5,694 for the three months ended June 30, 2022 and 2021, respectively.

Interest expenses in connection with these loans were $ 10,714 and $ 10,992 for the six months ended June 30, 2022 and 2021, respectively.

On February 8, 2016, a Share Exchange Agreement

(“Share Exchange Agreement”) was entered into by and among the Company, BriVision, Euro-Asia Investment & Finance

Limited, a company incorporated under the laws of Hong Kong Special Administrative Region of People’s Republic of China (“Euro-Asia”),

being the owners of record of 164,387,376 ( 52,336,000 pre-stock split) shares of Common Stock of the Company, and the owners of record

of all of the issued share capital of BriVision (the “BriVision Stock”).

Pursuant to the Share Exchange Agreement, upon

surrender by the BriVision Shareholders and the cancellation by BriVision of the certificates evidencing the BriVision Stock as registered

in the name of each BriVision Shareholder, and pursuant to the registration of the Company in the register of members maintained by BriVision

as the new holder of the BriVision Stock and the issuance of the certificates evidencing the aforementioned registration of the BriVision

Stock in the name of the Company, the Company should issue 166,273,921 ( 52,936,583 pre-stock split) shares (the “Acquisition

Stock”) (subject to adjustment for fractionalized shares as set forth below) of the Company’s Common Stock to the BriVision

Shareholders (or their designees), and 163,159,952 ( 51,945,225 pre-stock split) shares of the Company’s Common Stock owned by Euro-Asia

should be cancelled and retired to treasury.

The Acquisition Stock collectively should represent 79.70 % of the issued and outstanding

Common Stock of the Company immediately after the Closing, in exchange for the BriVision Stock, representing 100 % of the issued share

capital of BriVision in a reverse merger, or the Merger.

Pursuant to the Merger, all of the issued and outstanding shares of BriVision’s

Common Stock were converted, at an exchange ratio of 0.2536-for-1, into an aggregate of 166,273,921 ( 52,936,583 pre-stock split) shares

of Company’s Common Stock and BriVision became a wholly owned subsidiary, of the Company.

The holders of Company’s Common

Stock as of immediately prior to the Merger held an aggregate of 205,519,223 ( 65,431,144 pre-stock split) shares of Company’s Common

Stock, Because of the exchange of the BriVision Stock for the Acquisition Stock (the “Share Exchange”), BriVision

became a wholly owned subsidiary (the “Subsidiary”) of the Company and there was a change of control of the Company following

There were no warrants, options or other equity instruments issued in connection with the share exchange agreement.

On February 17, 2016, pursuant to the 2016 Equity

Incentive Plan (the “2016 Plan”), 157,050 ( 50,000 pre-stock split) shares were granted to the employees.

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 (the “Forward Stock Split”)

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.

On May 6, 2016, the Company and BioLite Taiwan

agreed to amend the BioLite Collaborative Agreement, through entry into the Milestone Payment Agreement, whereby the Company has agreed

to issue shares of Common Stock of the Company, at the price of $1.60 per share, for an aggregate number of 562,500 shares, as part of

the Company’s first installation of payment pursuant to the Milestone Payment.

The shares issuance was completed in June 2016.

As of September 30, 2022 and December 31, 2021, the outstanding principal and accrued interest was $ 146,790 and $ 168,131 , respectively.

Interest expenses in connection with these loans were $ 5,208 and $ 5,679 for the three months ended September 30, 2022 and 2021, respectively.

Interest expenses in connection with these loans were $ 15,922 and $ 16,670 for the nine months ended September 30, 2022 and 2021, respectively.

tax expense for the three-month and nine-month periods ended September 30, 2022 and 2021 consisted of the following:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Total Current

Total Deferred

$ ( 166,696 )

$ ( 187,055 )

Total provision for income taxes

$ ( 165,096 )

$ ( 186,255 )

Deferred tax assets

(liability) as of September 30, 2022 and December 31, 2021 consist approximately of:

September 30,

Loss on impairment of Assets

Net operating loss carryforwards in the Taiwan

Tax credit of investment

Valuation allowance

On February 8, 2016, a Share

Exchange Agreement (“Share Exchange Agreement”) was entered into by and among the Company, BriVision, Euro-Asia Investment

& Finance Corp.

Limited, a company incorporated under the laws of Hong Kong Special Administrative Region of People’s Republic

of China (“Euro-Asia”), being the owners of record of 164,387,376 ( 52,336,000 pre-stock split) shares of Common Stock of

the Company, and the owners of record of all of the issued share capital of BriVision (the “BriVision Stock”).

to the Share Exchange Agreement, upon surrender by the BriVision Shareholders and the cancellation by BriVision of the certificates evidencing

the BriVision Stock as registered in the name of each BriVision Shareholder, and pursuant to the registration of the Company in the register

of members maintained by BriVision as the new holder of the BriVision Stock and the issuance of the certificates evidencing the aforementioned

registration of the BriVision Stock in the name of the Company, the Company should issue 166,273,921 ( 52,936,583 pre-stock split) shares

(the “Acquisition Stock”) (subject to adjustment for fractionalized shares as set forth below) of the Company’s

Common Stock to the BriVision Shareholders (or their designees), and 163,159,952 ( 51,945,225 pre-stock split) shares of the Company’s

Common Stock owned by Euro-Asia should be cancelled and retired to treasury.

The Acquisition Stock collectively should represent 79.70 %

of the issued and outstanding Common Stock of the Company immediately after the Closing, in exchange for the BriVision Stock, representing

100 % of the issued share capital of BriVision in a reverse merger, or the Merger.

Pursuant to the Merger, all of the issued and outstanding

shares of BriVision’s Common Stock were converted, at an exchange ratio of 0.2536-for-1, into an aggregate of 166,273,921 ( 52,936,583

pre-stock split) shares of Company’s Common Stock and BriVision became a wholly owned subsidiary, of the Company.

The holders of

Company’s Common Stock as of immediately prior to the Merger held an aggregate of 205,519,223 ( 65,431,144 pre-stock split) shares

of Company’s Common Stock, Because of the exchange of the BriVision Stock for the Acquisition Stock (the “Share

Exchange”), BriVision became a wholly owned subsidiary (the “Subsidiary”) of the Company and there was a change of

control of the Company following the closing.

There were no warrants, options or other equity instruments issued in connection

with the share exchange agreement.

On February 17, 2016, pursuant

to the 2016 Equity Incentive Plan (the “2016 Plan”), 157,050 ( 50,000 pre-stock split) shares were granted to the employees.

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 (the

“Forward Stock Split”) 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.

On May 6, 2016, the Company and

BioLite Taiwan agreed to amend the BioLite Collaborative Agreement, through entry into the Milestone Payment Agreement, whereby the Company

has agreed to issue shares of Common Stock of the Company, at the price of $1.60 per share, for an aggregate number of 562,500 shares,

as part of the Company’s first installation of payment pursuant to the Milestone Payment.

The shares issuance was completed in

On August 26, 2016, the Company issued 1,468,750 shares (“Shares”) of the Company’s Common Stock, par value

15 unchanged sentences

to the shareholders of BioLite and 29,561,231 shares to the shareholders of BioKey.

On May 3, 2019, the Company filed a Certificate

of Amendment with the Secretary of State of Nevada, which was effective May 8, 2019 upon its receipt of the written notice from Financial

Industry Regulatory Authority (“FINRA”).

Pursuant to the Certificate of Amendment, the Company effectuated a 1-for-18 reverse

stock split of its issued and outstanding shares of common stock, $0.001 par value, whereby 318,485,252 outstanding shares of the Company’s

common stock were exchanged for 17,693,625 shares of the Company’s Common Stock.

On October 1, 2016, the Company entered into a

consulting agreement with Kazunori Kameyama (“Kameyama”) for the provision of services related to the clinical trials and

other administrative work, public relation work, capital raising, trip coordination, In consideration for providing such services, the

Company agreed to indemnify the consultant in an amount of $150 per hour in cash up to $3,000 per month, and issue to Kameyama the Company’s

Common Stock at $1.00 per share for any amount exceeding $3,000.

The Company’s stocks shall be calculated and issued in December

On November 21, 2020, the Company entered into an agreement with Kameyama, pursuant to which the Company granted and issued

24,694 stock options to Kameyama related to unpaid consulting fees of $ 49,388 .

On July 24, 2017, BriVision entered into a collaborative

agreement (the “BioFirst Collaborative Agreement”) with BioFirst (See Note 3).

On September 25, 2017, BioFirst has delivered

all research, technical, data and development data to BriVision, and the Company has recorded the full amount of $ 3,000,000 due to BioFirst.

On June 30, 2019, the Company entered into a Stock Purchase Agreement with BioFirst, pursuant to which the Company agreed to issue 428,571

shares of the Company’s common stock to BioFirst in consideration for $ 3,000,000 owed by the Company to BioFirst.

shares were issued during the year ended December 31, 2019.

During the year ended December 31, 2019, the

Company entered into service agreements with Euro-Asia Investment & Finance Corp Ltd.

(a related party), Ever Adventure inv.

Consultant Co., Ltd., New Eastern Asia (a related party), and Kimho Consultants Co., Ltd.

(a related party) for the maintenance of the

listing in the U.S.

On May 3, 2019, the Company filed

a Certificate of Amendment with the Secretary of State of Nevada, which was effective May 8, 2019 upon its receipt of the written notice

from Financial Industry Regulatory Authority (“FINRA”).

Pursuant to the Certificate of Amendment, the Company effectuated

a 1-for-18 reverse stock split of its issued and outstanding shares of common stock, $0.001 par value, whereby 318,485,252 outstanding

shares of the Company’s common stock were exchanged for 17,693,625 shares of the Company’s Common Stock.

On October 1, 2016, the Company

entered into a consulting agreement with Kazunori Kameyama (“Kameyama”) for the provision of services related to the clinical

trials and other administrative work, public relation work, capital raising, trip coordination, In consideration for providing such services,

the Company agreed to indemnify the consultant in an amount of $150 per hour in cash up to $3,000 per month, and issue to Kameyama the

Company’s Common Stock at $1.00 per share for any amount exceeding $3,000.

The Company’s stocks shall be calculated and issued

in December every year.

On November 21, 2020, the Company entered into an agreement with Kameyama, pursuant to which the Company granted

and issued 24,694 stock options to Kameyama related to unpaid consulting fees of $ 49,388 .

On July 24, 2017, BriVision entered

into a collaborative agreement (the “BioFirst Collaborative Agreement”) with BioFirst (See Note 3).

On September 25, 2017,

BioFirst has delivered all research, technical, data and development data to BriVision, and the Company has recorded the full amount

of $ 3,000,000 due to BioFirst.

On June 30, 2019, the Company entered into a Stock Purchase Agreement with BioFirst, pursuant to which

the Company agreed to issue 428,571 shares of the Company’s common stock to BioFirst in consideration for $ 3,000,000 owed by the

Company to BioFirst.

These common shares were issued during the year ended December 31, 2019.

During the year ended December

31, 2019, the Company entered into service agreements with Euro-Asia Investment & Finance Corp Ltd.

(a related party), Ever Adventure

(Formosa) Consultant Co., Ltd., New Eastern Asia (a related party), and Kimho Consultants Co., Ltd.

(a related party) for the maintenance

of the listing in the U.S.

stock exchange market, investor relations, and business development.

Pursuant to the agreements, the Company issued

644,972 shares of the Company’s common stock for the consulting service from July 2019 to July 2024 for the service fee of $ 4,514,800

in aggregate, and recorded as stock subscription receivable.

As of June 30, 2022 and December 31, 2021, stock subscription receivable

was $ 1,805,920 and $ 2,257,400 , respectively.

In August, 2019, the Company entered into several

Conversion Agreements to all creditors that are listed under below table of “due to related parties” in consideration for

a total of $ 4,872,340 owed by the Company to various creditors based on outstanding loan agreements.

Under the Conversion Agreements,

creditor agrees to convert the amount of debt into the Company’s common stock at a price of $ 7.00 per share.

Pursuant to the agreements, the Company

issued 644,972 shares of the Company’s common stock for the consulting service from July 2019 to July 2024 for the service fee

of $ 4,514,800 in aggregate, and recorded as stock subscription receivable.

As of September 30, 2022 and December 31, 2021, stock subscription

receivable was $ 1,580,180 and $ 2,257,400 , respectively.

In August, 2019, the Company

entered into several Conversion Agreements to all creditors that are listed under below table of “due to related parties”

in consideration for a total of $ 4,872,340 owed by the Company to various creditors based on outstanding loan agreements.

Under the Conversion

Agreements, creditor agrees to convert the amount of debt into the Company’s common stock at a price of $ 7.00 per share.

Lion Arts Promotion Inc

3 unchanged sentences

YuanGene Corporation

On March 12, 2020, the board of directors of

the Company approved and adopted an amendment to the Company’s Articles of Incorporation, to increase the authorized shares of

its common stock, par value $ 0.001 per share, from 20,000,000 to 100,000,000 shares.

On July 8, 2020, the Company entered an agreement

with View Trade Securities Inc.

(“ViewTrade”) to engage ViewTrade as the placement agent and the Company’s advisor/consultant

with respect to its ongoing capital events.

Pursuant to the agreement, the Company agreed to pay View Trade 60,000 restricted common

shares of the Company and 60,000 warrants to purchase common shares of the Company at an exercise price of $6 per share for a period

of 5 years with cashless exercise provision.

As of December 31, 2020, the Company has issued 60,000 shares of common stock to ViewTrade

for the consulting fee with an estimated value of $ 135,000 .

The warrants were never issued and the parties mutually agreed to terminate

the agreement on November 19, 2020.

Pursuant to the termination agreement, the Company

issued 50,000 shares of the Company’s common stock at a price of $ 5 per share as a termination fee on June 29, 2021, of which 6,000

shares were issued to WallachBeth Capital LLC (“WallachBeth”).

In January 2021, WallachBeth entered into a consulting agreement

with the Company pursuant to which the Company engaged WallachBeth to conduct due diligence and research work with respect to the Company.

On March 12, 2020, the board

of directors of the Company approved and adopted an amendment to the Company’s Articles of Incorporation, to increase the authorized

shares of its common stock, par value $ 0.001 per share, from 20,000,000 to 100,000,000 shares.

On July 8, 2020, the Company

entered an agreement with View Trade Securities Inc.

(“ViewTrade”) to engage ViewTrade as the placement agent and the

Company’s advisor/consultant with respect to its ongoing capital events.

Pursuant to the agreement, the Company agreed to pay View

Trade 60,000 restricted common shares of the Company and 60,000 warrants to purchase common shares of the Company at an exercise price

of $6 per share for a period of 5 years with cashless exercise provision.

As of December 31, 2020, the Company has issued 60,000 shares

of common stock to ViewTrade for the consulting fee with an estimated value of $ 135,000 .

The warrants were never issued and the parties

mutually agreed to terminate the agreement on November 19, 2020.

Pursuant to the termination agreement,

the Company issued 50,000 shares of the Company’s common stock at a price of $ 5 per share as a termination fee on June 29, 2021,

of which 6,000 shares were issued to WallachBeth Capital LLC (“WallachBeth”).

In January 2021, WallachBeth entered into a

consulting agreement with the Company pursuant to which the Company engaged WallachBeth to conduct due diligence and research work with

respect to the Company.

On June 29, 2021, WallachBeth was issued 6,000 shares of common stock as compensation for those services.

Also on November 19, 2020, the Company and ViewTrade

agreed to a new Advisory agreement under which ViewTrade was engaged to provide advisory services only.

In addition to a retainer fee,

the Company agreed to issue 200,000 warrants, with an exercise price of $ 2.25 , an industry standard cashless exercise provision, and

a term of 5 years from November 19, 2020.

Also on November 19, 2020, the

Company and ViewTrade agreed to a new Advisory agreement under which ViewTrade was engaged to provide advisory services only.

to a retainer fee, the Company agreed to issue 200,000 warrants, with an exercise price of $ 2.25 , an industry standard cashless exercise

provision, and a term of 5 years from November 19, 2020.

During the year ended December

the Company entered into a consulting agreement with a service provider for consulting and advisory services, pursuant to which the Company

agreed to pay the service fee by issuing 50,000 shares of unrestricted common shares, valued at the closing price of $ 2.9 per share on

the grant date.

31, 2020, the Company entered into a consulting agreement with a service provider for consulting and advisory services, pursuant to which

the Company agreed to pay the service fee by issuing 50,000 shares of unrestricted common shares, valued at the closing price of $ 2.9

per share on the grant date.

These shares have been issued during the year ended December 31, 2020.

During the year ended December 31, 2020, the

Company received aggregated capital contributions of $ 7,615,331 in cash from 45 investors through private placements of the sale of the

Company’s common stock for the purchase price of $ 2.25 per share and a free warrant attached with each common stock purchased.

During the year ended December

31, 2020, the Company received aggregated capital contributions of $ 7,615,331 in cash from 45 investors through private placements of

the sale of the Company’s common stock for the purchase price of $ 2.25 per share and a free warrant attached with each common

stock purchased.

In December 2020, 3,384,615 shares of the Company’s common stock have been issued.

During the year ended December 31, 2020, the

Company entered into consulting agreements with four service providers for consulting and advisory services, pursuant to which the Company

agreed to pay the service fee by issuing 521,887 shares of unrestricted common shares, valued at the closing price from $ 2 to $ 3.68 per

share on the grant date.

During the year ended December

31, 2020, the Company entered into consulting agreements with four service providers for consulting and advisory services, pursuant to

which the Company agreed to pay the service fee by issuing 521,887 shares of unrestricted common shares, valued at the closing price

from $ 2 to $ 3.68 per share on the grant date.

These shares have been issued in October and December 2020.

During the year ended December 31, 2020, the Company

issued aggregated common shares of 915,856 to six previous note holders, who had converted their outstanding principals and accrued and

unpaid interests, including the debt conversion to the following:

converted the aggregated amount of $292,826 at the conversion price of $1.84 on April 5, 2020, in exchange for 159,145 shares of the

Company’s common stock, and warrants to purchase 159,145 shares of the Company’s common stock.

converted the aggregated amount of $284,036 at the conversion price of $1.84 on April 5, 2020, in exchange for 154,368 shares of the

Company’s common stock, and warrants to purchase 154,368 shares of the Company’s common stock.

converted the aggregated amount of $289,974 at the conversion price of $1.78 on April 20, 2020, in exchange for 162,908 shares of the

Company’s common stock, and warrants to purchase 162,908 shares of the Company’s common stock.

converted the aggregated amount of $225,222 at the conversion price of $1.78 on April 20, 2020, in exchange for 126,530 shares of the

Company’s common stock, and warrants to purchase 126,530 shares of the Company’s common stock.

and Wei converted the aggregated amount of $354,722 at the conversion price of $1.84 on April 5, 2020, in exchange for 192,784 shares

of the Company’s common stock, and warrants to purchase 192,784 shares of the Company’s common stock.

converted the aggregated amount of $270,272 at the conversion price of $2.25 on November 9, 2020, in exchange for 120,121 shares of the

Company’s common stock, and warrants to purchase 120,121 shares of the Company’s common stock.

See Note 7 for more details in connection with the above debt conversion.

In July 2021, 1,111,112 shares of the Company’s

common stock and warrants were issued pursuant to the conversion of convertible promissory note of $ 2,500,000 entered in October 2020.

On August 5, 2021, the Company closed its public

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

the Company’s 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;

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

The Company completed

the Public 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.

In August 2021, 2,354,145 shares of the Company’s common stock were issued for gross proceeds of $ 6,875,000 , before placement agent

fees and legal fees of $ 850,429 .

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

Pursuant to these exercises, the Company issued an aggregate of 673,605 shares of Common Stock.

In November 2021, the Company entered into consulting

agreements with service providers for consulting and advisory services, pursuant to which the Company agreed to pay the service fee amounted

$1,478,590 by issuing 316,934 shares of unrestricted common shares, valued at the closing price from $2.31 to $6.3 per share on the grant

During the year ended December

31, 2020, the Company issued aggregated common shares of 915,856 to six previous note holders, who had converted their outstanding principals

and accrued and unpaid interests, including the debt conversion to the following:

Keypoint converted the aggregated amount of $292,826 at the conversion price of $1.84 on April 5, 2020, in exchange for 159,145 shares of the Company’s common stock, and warrants to purchase 159,145 shares of the Company’s common stock.

Odaira converted the aggregated amount of $284,036 at the conversion

price of $1.84 on April 5, 2020, in exchange for 154,368 shares of the Company’s common stock, and warrants to purchase 154,368

shares of the Company’s common stock.

converted the aggregated amount of $289,974 at the conversion

price of $1.78 on April 20, 2020, in exchange for 162,908 shares of the Company’s common stock, and warrants to purchase 162,908

shares of the Company’s common stock.

KLS converted the aggregated amount of $225,222 at the conversion price

of $1.78 on April 20, 2020, in exchange for 126,530 shares of the Company’s common stock, and warrants to purchase 126,530

shares of the Company’s common stock.

Yu and Wei converted the aggregated amount of $354,722 at the conversion

price of $1.84 on April 5, 2020, in exchange for 192,784 shares of the Company’s common stock, and warrants to purchase 192,784

shares of the Company’s common stock.

KSL converted the aggregated amount of $270,272 at the conversion price

of $2.25 on November 9, 2020, in exchange for 120,121 shares of the Company’s common stock, and warrants to purchase 120,121

shares of the Company’s common stock.

See Note 7 for more details in connection with the

above debt conversion.

In July 2021, 1,111,112 shares

of the Company’s common stock and warrants were issued pursuant to the conversion of convertible promissory note of $ 2,500,000

entered in October 2020.

On August 5, 2021, the Company

closed its public offering (the “Public Offering”) of 1,100,000 units (the “Units”), with each Unit consisting

of one share of the Company’s 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;

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

Company completed the Public 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

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

of $6,875,000.

In August 2021, 2,354,145 shares of the Company’s common stock were issued for gross proceeds of $ 6,875,000 , before

placement agent fees and legal fees of $ 850,429 .

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.

Pursuant to these exercises, the Company issued an aggregate of 673,605 shares of Common

In November 2021, the Company

entered into consulting agreements with service providers for consulting and advisory services, pursuant to which the Company agreed

to pay the service fee amounted $1,478,590 by issuing 316,934 shares of unrestricted common shares, valued at the closing price from

$2.31 to $6.3 per share on the grant date.

These shares have been issued during the year ended December 31, 2021.

In January 2022, the Company agreed to pay the

deferred service fees related to Public Offering amounted $4,296,763 by issuing 1,306,007 shares of unrestricted common shares, valued

at $3.29 per share on the grant date.

In January 2022, the Company

agreed to pay the deferred service fees related to Public Offering amounted $4,296,763 by issuing 1,306,007 shares of unrestricted common

shares, valued at $3.29 per share on the grant date.

These shares have been issued in January 2022.

In March 2022, the Company issued 75,000 common

shares to BarLew Holdings, LLC for consulting and advisory services amounted to $ 169,500 , valued at $ 2.26 per share.

In May 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 at an offering price of $ 2.11 per share in a registered direct offering.

The shares of the Company’s common stock

were issued for gross proceeds of $ 4,220,000 , before placement agent fees and legal fees of $ 556,075 .

Pursuant to the offering, the

Company will also issue 5 -year warrants to purchase 2,000,000 shares of common stock, exercisable at a price of $ 2.45 per share.

of June 30, 2022, these warrants have been issued but not exercised

In March 2022, the Company issued

75,000 common shares to BarLew Holdings, LLC for consulting and advisory services amounted to $ 169,500 , valued at $ 2.26 per share.

In May 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 at an offering price of $ 2.11 per share in a registered direct offering.

The shares of the Company’s common stock were issued

for gross proceeds of $ 4,220,000 , before placement agent fees and legal fees of $ 556,075 .

Pursuant to the offering, the Company will

also issue 5 -year warrants to purchase 2,000,000 shares of common stock, exercisable at a price of $ 2.45 per share.

As of September 30, 2022,

these warrants have been issued but not exercised.

On July 10, 2022, the Board approved the issuance

of 75,000 shares of common stock to Barlew Holdings, LLC pursuant to the consulting agreement by and between Barlew Holdings, LLC and

the Company dated July 1, 2022, and 250,000 shares of common stock to Inverlew Advisors, LLC, in accordance with the consulting agreement

by and between Inverlew Advisors, LLC and the Company dated July 1, 2022.

STOCK OPTIONS

On October 30, 2020, the Company issued an aggregate

of 545,182 shares of common stock in lieu of unpaid salaries of certain employees and unpaid consulting fees under the 2016 Equity Incentive

Plan, as amended, at a conversion price of $ 2 per share;

the total amount of converted salaries and consulting fees was $ 1,090,361 .

November 21, 2020, the Company entered into acknowledgement agreements and stock option purchase agreements with these

employees and consultant;

pursuant to which the Company granted stock options to purchase 545,182 shares of the Company’s common

stock in lieu of common stock.

On October 30, 2020, the Company

issued an aggregate of 545,182 shares of common stock in lieu of unpaid salaries of certain employees and unpaid consulting fees under

the 2016 Equity Incentive Plan, as amended, at a conversion price of $ 2 per share;

the total amount of converted salaries and consulting

fees was $ 1,090,361 .

On November 21, 2020, the Company entered into acknowledgement agreements and stock option purchase

agreements with these employees and consultant;

pursuant to which the Company granted stock options to purchase 545,182 shares of the

Company’s common stock in lieu of common stock.

The options were vested at the grant date and become exercisable for 10 years from

the grant date.

On October 15, 2021, the Company

entered into stock option agreements with 11 directors and 3 employees, pursuant to which the Company granted options to purchase

an aggregate of 1,280,002 shares of common stock under the 2016 Equity Incentive Plan, as amended, at an exercise price of $ 3 per

The options were vested at the grant date and become exercisable for 10 years from the grant date.

On October 15, 2021, the Company entered into

stock option agreements with 11 directors and 3 employees, pursuant to which the Company granted options to purchase an aggregate of

1,280,002 shares of common stock under the 2016 Equity Incentive Plan, as amended, at an exercise price of $ 3 per share.

were vested at the grant date and become exercisable for 10 years from the grant date.

Options issued and outstanding as of December

31, 2021, and their activities during the year then ended are as follows:

Options issued and outstanding

as of December 31, 2021, and their activities during the year then ended are as follows:

Outstanding as of January 1, 2021

2 unchanged sentences

Vested and expected to vest

The fair value of stock options granted for the

year ended December 31, 2021 was calculated using the Black-Scholes option-pricing model applying the following assumptions:

The fair value of stock options

granted for the year ended December 31, 2021 was calculated using the Black-Scholes option-pricing model applying the following assumptions:

Risk free interest rate

2 unchanged sentences

Expected volatility

The weighted average grant date fair value of

options granted during the years ended December 31, 2021 was $ 2.09 .

There are 2,979,264 options available for grant under the

2016 Equity Incentive Plan as of December 31, 2021.

Compensation costs associated with the Company’s stock options are recognized,

based on the grant-date fair values of these options over vesting period.

Accordingly, the Company recognized stock-based compensation

expense of $0 and $0 for the three and six months ended June 30, 2022 and 2021, respectively.

There were no options exercised during

the three and six months ended June 30, 2022.

As of June 30, 2022, there were no unvested options.

On April 16, 2022, the Company entered into stock option agreements

with 5 directors, pursuant to which the Company agreed to grant options to purchase an aggregate of 761,920 shares of common stock under

the 2016 Equity Incentive Plan, at an exercise price of $ 3 per share, exercisable for 10 years from the grant date.

As of June 30, 2022,

these stock options have not been granted.

The weighted average grant date

fair value of options granted during the years ended December 31, 2021 was $ 2.09 .

There are 2,979,264 options available for

grant under the 2016 Equity Incentive Plan as of December 31, 2021.

Compensation costs associated with the Company’s stock options

are recognized, based on the grant-date fair values of these options over vesting period.

Accordingly, the Company recognized stock-based

compensation expense of $0 and $0 for the three and nine months ended September 30, 2022 and 2021, respectively.

There were no options

exercised during the three and nine months ended September 30, 2022.

As of September 30, 2022, there were no unvested options.

On April 16, 2022, the Company

entered into stock option agreements with 5 directors, pursuant to which the Company agreed to grant options to purchase an aggregate

of 761,920 shares of common stock under the 2016 Equity Incentive Plan, at an exercise price of $ 3 per share, exercisable for 10 years

from the grant date.

As of September 30, 2022, these stock options have not been granted.

LOSS PER SHARE

Basic loss per share is computed by dividing

net loss by the weighted-average number of common shares outstanding during the year.

Diluted loss per share is computed by dividing

net loss by the weighted-average number of common shares and dilutive potential common shares outstanding during the three and six months

ended June 30, 2022 and 2021.

Basic loss per share is computed

by dividing net loss by the weighted-average number of common shares outstanding during the year.

Diluted loss per share is computed

by dividing net loss by the weighted-average number of common shares and dilutive potential common shares outstanding during the three

and nine months ended September 30, 2022 and 2021.

For the Three Months

September 30,

Net loss attributable to ABVC’s common stockholders

6 unchanged sentences

Loss per share

For the Six Months

For the Nine Months

September 30,

Net loss attributable to ABVC’s common stockholders

$ ( 7,854,437 )

$ ( 3,100,071 )

Weighted-average shares outstanding:

3 unchanged sentences

Loss per share

Diluted loss per share takes into account the

potential dilution that could occur if securities or other contracts to issue Common Stock were exercised and converted into Common Stock.

The Company adopted FASB Accounting Standards

Codification, Topic 842, Leases (“ASC 842”) using the modified retrospective approach, electing the practical expedient that

allows the Company not to restate its comparative periods prior to the adoption of the standard on January 1, 2019.

The Company applied the following practical expedients in the transition

to the new standard and allowed under ASC 842:

● Reassessment

of expired or existing contracts:

The Company elected not to reassess, at the application date, whether any expired or existing contracts

contained leases, the lease classification for any expired or existing leases, and the accounting for initial direct costs for any existing

of hindsight:

The Company elected to use hindsight in determining the lease term (that is, when considering options to extend or terminate

the lease and to purchase the underlying asset) and in assessing impairment of right-to-use assets.

● Reassessment

of existing or expired land easements:

The Company elected not to evaluate existing or expired land easements that were not previously

accounted for as leases under ASC 840, as allowed under the transition practical expedient.

Going forward, new or modified land easements

will be evaluated under ASU No.

of lease and non- lease components:

Lease agreements that contain both lease and non-lease components are generally accounted for separately.

lease recognition exemption:

The Company also elected the short-term lease recognition exemption and will not recognize ROU assets or

lease liabilities for leases with a term less than 12 months.

The new leasing standard requires recognition

of leases on the consolidated balance sheets as right-of-use (“ROU”) assets and lease liabilities.

ROU assets represent the

Company’s right to use underlying assets for the lease terms and lease liabilities represent the Company’s obligation to

make lease payments arising from the leases.

Operating lease ROU assets and operating lease liabilities are recognized based on the present

value and future minimum lease payments over the lease term at commencement date.

The Company’s future minimum based payments used

to determine the Company’s lease liabilities mainly include minimum based rent payments.

As most of Company’s leases do not

provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at commencement

date in determining the present value of lease payments.

The Company recognized lease liabilities, with

corresponding ROU assets, based on the present value of unpaid lease payments for existing operating leases longer than twelve months.

The ROU assets were adjusted per ASC 842 transition guidance for existing lease-related balances of accrued and prepaid rent, unamortized

lease incentives provided by lessors, and restructuring liabilities.

Operating lease cost is recognized as a single lease cost on a straight-line

basis over the lease term and is recorded in Selling, general and administrative expenses.

Variable lease payments for common area maintenance,

property taxes and other operating expenses are recognized as expense in the period when the changes in facts and circumstances on which

the variable lease payments are based occur.

Diluted loss per share takes

into account the potential dilution that could occur if securities or other contracts to issue Common Stock were exercised and converted

into Common Stock.

The Company adopted FASB Accounting

Standards Codification, Topic 842, Leases (“ASC 842”) using the modified retrospective approach, electing the practical expedient

that allows the Company not to restate its comparative periods prior to the adoption of the standard on January 1, 2019.

The Company applied the following

practical expedients in the transition to the new standard and allowed under ASC 842:

Reassessment of expired or existing contracts:

The Company elected

not to reassess, at the application date, whether any expired or existing contracts contained leases, the lease classification for

any expired or existing leases, and the accounting for initial direct costs for any existing leases.

Use of hindsight:

The Company elected to use hindsight in determining

the lease term (that is, when considering options to extend or terminate the lease and to purchase the underlying asset) and in assessing

impairment of right-to-use assets.

Reassessment of existing or expired land easements:

The Company elected

not to evaluate existing or expired land easements that were not previously accounted for as leases under ASC 840, as allowed under

the transition practical expedient.

Going forward, new or modified land easements will be evaluated under ASU No.

Separation of lease and non- lease components:

Lease agreements that

contain both lease and non-lease components are generally accounted for separately.

Short-term lease recognition exemption:

The Company also elected the

short-term lease recognition exemption and will not recognize ROU assets or lease liabilities for leases with a term less than 12

The new leasing standard requires

recognition of leases on the consolidated balance sheets as right-of-use (“ROU”) assets and lease liabilities.

represent the Company’s right to use underlying assets for the lease terms and lease liabilities represent the Company’s

obligation to make lease payments arising from the leases.

Operating lease ROU assets and operating lease liabilities are recognized

based on the present value and future minimum lease payments over the lease term at commencement date.

The Company’s future minimum

based payments used to determine the Company’s lease liabilities mainly include minimum based rent payments.

As most of Company’s

leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available

at commencement date in determining the present value of lease payments.

The Company recognized lease

liabilities, with corresponding ROU assets, based on the present value of unpaid lease payments for existing operating leases longer

than twelve months.

The ROU assets were adjusted per ASC 842 transition guidance for existing lease-related balances of accrued and prepaid

rent, unamortized lease incentives provided by lessors, and restructuring liabilities.

Operating lease cost is recognized as a single

lease cost on a straight-line basis over the lease term and is recorded in Selling, general and administrative expenses.

Variable lease

payments for common area maintenance, property taxes and other operating expenses are recognized as expense in the period when the changes

in facts and circumstances on which the variable lease payments are based occur.

The Company has no finance leases.

The Company’s

leases primarily include various office and laboratory spaces, copy machine, and vehicles under various operating lease arrangements.

The Company’s leases primarily include various office and laboratory spaces, copy machine, and vehicles under various operating

lease arrangements.

The Company’s operating leases have remaining lease terms of up to approximately five years.

September 30,

Operating lease right-of-use assets

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Supplemental Information

The following provides details of the Company’s

lease expenses:

Three Months Ended

The following provides details

of the Company’s lease expenses:

September 30,

Operating lease expenses

Six Months Ended

September 30,

Operating lease expenses

Other information related to leases is presented

Cash paid for amounts included in

the measurement of operating lease liabilities

Other information related to

leases is presented below:

September 30,

Cash paid for amounts included in the measurement of operating lease liabilities

September 30,

Weighted Average Remaining Lease Term:

2 unchanged sentences

Operating leases

The minimum future annual payments under non-cancellable

leases during the next five years and thereafter, at rates now in force, are as follows:

2022 (excluding six months ended June 30, 2022)

The minimum future annual payments

under non-cancellable leases during the next five years and thereafter, at rates now in force, are as follows:

2022 (excluding nine months ended September 30, 2022)

Total future minimum lease payments, undiscounted

2 unchanged sentences

BUSINESS COMBINATION

On February 8, 2019, the Company consummated

the Merger transactions of BioLite and BioKey (See Note 1).

Pursuant to the terms of the Merger Agreement, BioLite and BioKey became

two wholly-owned subsidiaries of the Company on February 8, 2019.

The Company adopted ASC 805, “Business Combination” to

record the merger transactions of BioKey.

The acquisition was accounted for as a business combination under the purchase method of accounting.

On February 8, 2019, the Company

consummated the Merger transactions of BioLite and BioKey (See Note 1).

Pursuant to the terms of the Merger Agreement, BioLite and BioKey

became two wholly-owned subsidiaries of the Company on February 8, 2019.

The Company adopted ASC 805, “Business Combination”

to record the merger transactions of BioKey.

The acquisition was accounted for as a business combination under the purchase method of

BioKey’s results of operations were included in the Company’s results beginning February 8, 2019.

The purchase price has

been allocated to the assets acquired and the liabilities assumed based on their fair value at the acquisition date as summarized in

the following:

price has been allocated to the assets acquired and the liabilities assumed based on their fair value at the acquisition date as summarized

in the following:

Purchase consideration:

15 unchanged sentences

* 29,561,231 shares ( 1,642,291 after stock reverse split) of common stock of the Company was issued to BioKey in connection with the Merger.

shares were valued at $ 1.50 per share, based on the bid-and-ask share price of common stock of the Company on the final day of trading,

February 8, 2019.

On February 8, 2019, the Company has recorded

a 100 % goodwill write-down of $ 43,647,626 .

Goodwill was determined to have been 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’s anticipated future cash flows indicate that the recoverability of goodwill is not

reasonably assured.

The goodwill write-down was reflected as a decrease in additional paid-in capital in the statement of equity upon

the consummation of the Merger.

Those shares were valued at $ 1.50 per share, based on the bid-and-ask share price of common stock of the Company on the final day of trading, February 8, 2019.

On February 8, 2019, the Company

has recorded a 100 % goodwill write-down of $ 43,647,626 .

Goodwill was determined to have been 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’s anticipated future cash flows indicate that the recoverability of goodwill

is not reasonably assured.

The goodwill write-down was reflected as a decrease in additional paid-in capital in the statement of equity

upon the consummation of the Merger.

SUBSEQUENT EVENTS

On July 10, 2022, the Board approved the issuance of 75,000 shares

of common stock to Barlew Holdings, LLC pursuant to the consulting agreement by and between Barlew Holdings, LLC and the Company dated

July 1, 2022, and 250,000 shares of common stock to Inverlew Advisors, LLC, in accordance with the consulting agreement by and between

Inverlew Advisors, LLC and the Company dated July 1, 2022.

The Company has evaluated subsequent events through the date which

the consolidated financial statements were available to be issued.

All subsequent events requiring recognition as of June 30, 2022 have

been incorporated into these consolidated financial statements and there are no other subsequent events that require disclosure in accordance

with FASB ASC Topic 855, “Subsequent Events.”

The Company has evaluated subsequent events and transactions that occurred

after September 30, 2022 up through the date the Company issued these unaudited consolidated financial statements on November 14, 2022.

All subsequent events requiring recognition as of September 30, 2022 have been incorporated into these unaudited consolidated financial

statements and there are no other subsequent events that require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events.”

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 1. Financial Statements