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Item 2. Management’s Discussion and Analysis

2022-11-14 compared with 2022-08-15 · 1053 added, 742 removed, 833 unchanged (68% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

Caution Regarding Forward-Looking Information

FORWARD-LOOKING INFORMATION

The following information should be read in conjunction

with ABVC BioPharma, Inc.

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

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

Information in this Item 2, “Management’s

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

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

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

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

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

a guarantee of future performance.

Forward-looking statements are subject to risks

and uncertainties, certain of which are beyond our control.

Actual results could differ materially from those anticipated as a result

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

The following information should

be read in conjunction with ABVC BioPharma, Inc.

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

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

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

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

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

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

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

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

Forward-looking statements are

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

Actual results could differ materially from those anticipated

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

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

22 unchanged sentences

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

Because of these risks and uncertainties, the

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

Factors that cause

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

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

The Company disclaims any obligation to update

the forward-looking statements in this report.

From its inception, the Company has not generated substantial revenue

from its medical device and new drug development.

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

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

provided to a related party.

Because of these risks and uncertainties,

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

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

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

The Company disclaims any obligation

to update the forward-looking statements in this report.

From its inception, the Company

has not generated substantial revenue from its medical device and new drug development.

For the nine months ended September 30, 2022,

the Company generated $336,961 in revenue, mainly from the sale of Contract Development & Manufacturing Organization (“CDMO”)

services, and $1,559 from consulting services provided to a related party.

Business Overview

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

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

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

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

Perhaps the most

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

starting in 1899.

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

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

treatment of leukemia and Hodgkins disease.

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

isolated from the Pacific yew tree.

The Company develops its pipeline by carefully tracking new medical

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

Pre-clinical, disease animal model and

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

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

Once a drug is shown to be a good

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

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

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

with Phase II clinical trials.

Currently, institutions conducting phase II clinical trials in partnership

with ABVC include:

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

Andrew Chang, MD, Ph.D., Sydney

Eye Hospital, Australia

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

ABVC BioPharma Inc., which was

incorporated in July 2015 in the State of Delaware, is a clinical stage biopharmaceutical company focused on the development of medical

devices and new drugs derived from plants.

Medicines derived from plants

have a long history of relieving or preventing many diseases and have typically exhibited fewer side effects than drugs developed from

animals or chemical ingredients.

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

of the willow tree and was later marketed by Bayer starting in 1899.

Aspirin has very few serious side effects and has proven to be one

of the most successful drugs in medical history.

Some 50 years later, scientists identified anticancer compounds in the rosy periwinkle,

which Eli Lilly subsequently produced for the treatment of leukemia and Hodgkins disease.

Other well-known examples of successful botanical

drugs include the cancer-fighting Taxol, isolated from the Pacific yew tree.

The Company develops its pipeline

by carefully tracking new medical discoveries and medical device technologies of research institutions in the Asia-Pacific region.

Pre-clinical,

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

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

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

medical device from the original researchers and begins to introduce the drugs clinical plan to highly respected principal investigators

in the United States, Australia and Taiwan.

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

are eager to work with the Company to move forward with Phase II clinical trials.

Currently, institutions conducting phase II clinical

trials in partnership with ABVC include:

Medical Device:

ABV-1701, Vitargus® in vitrectomy surgery, Pivotal

Study in Australia, Principal Investigator:

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

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

Principal Investigators:

Charles DeBattista M.D.

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

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

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

MD, Ph.D – Taipei Veterans General Hospital

ABV-1505, Adult Attention-Deficit Hyperactivity Disorder (ADHD),

Phase II, NCE drug Principal Investigators:

Keith McBurnett, Ph.D.

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

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

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

(UCSF), School of Medicine

ABV-1601, Major Depression in Cancer Patients, Phase I/II, NCE

drug Principal Investigator:

Scott Irwin, MD, Ph.D.

Sinai Medical Center (CSMC)

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

Hendifar, MD – Cedars

Sinai Medical Center (CSMC)

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

in Patients with Stage IV or Recurrent Breast Cancer Patients

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

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

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

commercialize the drug upon approval by the U.S.

– Cedars Sinai Medical Center (CSMC)

ABV-1703, Advanced Inoperable or Metastatic Pancreatic Cancer,

Phase II, NCE drug Principal Investigator:

Hendifar, MD – Cedars Sinai Medical Center (CSMC)

ABV-1501, A Phase I/II, Open Label Study to Evaluate the Safety

and Efficacy of BLEX 404 Oral Liquid Combined with Docetaxel Monotherapy in Patients with Stage IV or Recurrent Breast Cancer Patients

Medical Device:

ABV-2002, Class I/II through 510K for market launch,

Corneal Storage Media, Technology Licensing in progress

Upon successful completion of

the Phase II trial, the Company will seek a partner – a large pharmaceutical company – to complete a Phase III study, submit

the New Drug Application (NDA), and commercialize the drug upon approval by the U.S.

and Taiwan FDAs.

The Company expects to seek its first commercialization partner in 2023

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

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

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

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

(phase I through phase III) and commercial manufacturing.

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

The Company expects to seek its

first commercialization partner in 2023 for Vitargus, a vitreous substitute that helps to maintain the retina’s round

shape and location during vitrectomy surgery.

Another part of the Company’s

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

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

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

On February 8, 2019, the Company,

BioLite Holding, Inc.

(“BioLite”), BioKey, Inc.

(“BioKey”), BioLite Acquisition Corp., a direct wholly-owned subsidiary of the

Company (“Merger Sub 1”), and BioKey Acquisition Corp., a direct wholly-owned subsidiary of the Company (“Merger Sub

2”) (collectively referred to as the “Parties”) completed the business combination pursuant to that certain Agreement

and Plan of Merger (the “Merger Agreement”), dated January 31, 2018, pursuant to which the Company acquired BioLite and BioKey

via issuing shares of the Company’s Common Stock to the shareholders of BioLite and BioKey.

As a result, BioLite and BioKey became

two wholly-owned subsidiaries of the Company on February 8, 2019.

The Company issued an aggregate of 104,558,777 shares of Common Stock

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

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

BioLite’s key subsidiaries include BioLite BVI, Inc.

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

(“BioLite Taiwan”),

a Taiwanese corporation that was founded in February 2006.

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

BioLite and BioLite BVI are holding companies

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

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

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

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

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

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

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

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

BioKey was incorporated on August 9, 2000 in

the State of California.

It is engaged primarily in research and development, manufacturing, and distribution of generic drugs and nutraceuticals

with strategic partners.

BioKey provides a wide range of services, including, API characterization, pre-formulation studies, formulation

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

(phase 1 through phase 3) and commercial manufacturing.

It also licenses out its technologies and initiates joint research and development

processes with other biotechnology, pharmaceutical, and nutraceutical companies.

(“BioKey”), BioLite Acquisition Corp., a direct wholly-owned

subsidiary of the Company (“Merger Sub 1”), and BioKey Acquisition Corp., a direct wholly-owned subsidiary of the Company

(“Merger Sub 2”) (collectively referred to as the “Parties”) completed the business combination pursuant to that

certain Agreement and Plan of Merger (the “Merger Agreement”), dated January 31, 2018, pursuant to which the Company acquired

BioLite and BioKey via issuing shares of the Company’s Common Stock to the shareholders of BioLite and BioKey.

As a result, BioLite

and BioKey became two wholly-owned subsidiaries of the Company on February 8, 2019.

The Company issued an aggregate of 104,558,777 shares

of Common Stock (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 was incorporated under

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

BioLite’s key subsidiaries

include BioLite BVI, Inc.

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

BioLite, Inc.

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

BioLite Taiwan has been in the

business of developing new drugs for over ten years.

BioLite and BioLite BVI are holding

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

In January 2017, BioLite, BioLite

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

Share Purchase / Exchange Agreement”).

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

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

shares of Common Stock of BioLite at the same price per share, resulting in share ownership in BioLite Common Stock equal to the number

of shares they had held in BioLite Taiwan Common Stock.

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

owned, via BioLite BVI, approximately 73% of BioLite Taiwan.

The other shareholders who did not enter this Share Purchase/ Exchange Agreement

retained their equity ownership in BioLite Taiwan.

BioKey was incorporated on August

9, 2000 in the State of California.

It is engaged primarily in research and development, manufacturing, and distribution of generic drugs

and nutraceuticals with strategic partners.

BioKey provides a wide range of services, including, API characterization, pre-formulation

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

clinical trial materials (phase 1 through phase 3) and commercial manufacturing.

It also licenses out its technologies and initiates

joint research and development processes with other biotechnology, pharmaceutical, and nutraceutical companies.

Common Stock Reverse Split

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

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

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

to reflect the Reverse Split.

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

pursuant to Section 78.207 of Nevada Revised Statutes.

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

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

the State of Nevada.

On March 12, 2019, the Board,

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

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

of incorporation of the Company to reflect the Reverse Split.

The Board approved and authorized the Reverse Split without obtaining approval

of the Company’s shareholders pursuant to Section 78.207 of Nevada Revised Statutes.

On May 3, 2019, the Company filed

a certificate of amendment to the Company’s articles of incorporation (the “Amendment”) to implement the Reverse Split

with the Secretary of State of the State of Nevada.

The Reverse Split took effect on May 8, 2019.

Series A Convertible Preferred Stock

On June 28, 2019, the Company filed a certificate

of designation (the “Series A COD”) of Series A Convertible Preferred Stock (the “Series A Stock”) with the Secretary

of the State of Nevada.

Pursuant to the Series A COD, the Company designated

3,500,000 shares of preferred stock as Series A Stock, par value of $0.001 per share.

Subject to the laws of Nevada, the Company will

pay cumulative dividends on the Series A Stock on each anniversary from the date of original issue for a period of four calendar years.

The Series A Stock will rank senior to the outstanding common stock of the Company, par value $0.001 (the “Common Stock”)

with respect to dividend rights, rights upon liquidation, dissolution or winding up in the amount of accrued but unpaid dividend.

of the Series A Stock will have the same voting rights as the Company’s Common Stock holders.

Each share of Series A Stock is initially

convertible at any time at the option of the holder into one share of Common Stock and automatically converts into one share of Common

Stock on the four-year anniversary of its issuance.

As of December 31, 2021, no Series A Convertible

Preferred Stock has been issued by the Company.

Increasing the Authorized Shares

On March 12, 2020, our board of directors approved

and adopted an amendment to the Company’s Articles of Incorporation, to increase the authorized shares of the common stock, par

value $0.001 per share, from 20,000,000 to 100,000,000, such that, after including the previously authorized 20,000,000 shares of preferred

stock, par value $0.001 per share, the aggregate number of shares of stock that the Company has authority to issue is 120,000,000 shares.

Series A Convertible Preferred

On June 28, 2019, the Company

filed a certificate of designation (the “Series A COD”) of Series A Convertible Preferred Stock (the “Series A Stock”)

with the Secretary of the State of Nevada.

Pursuant to the Series A COD,

the Company designated 3,500,000 shares of preferred stock as Series A Stock, par value of $0.001 per share.

Subject to the laws of Nevada,

the Company will pay cumulative dividends on the Series A Stock on each anniversary from the date of original issue for a period of four

calendar years.

The Series A Stock will rank senior to the outstanding common stock of the Company, par value $0.001 (the “Common

Stock”) with respect to dividend rights, rights upon liquidation, dissolution or winding up in the amount of accrued but unpaid

Holders of the Series A Stock will have the same voting rights as the Company’s Common Stock holders.

Each share of Series

A Stock is initially convertible at any time at the option of the holder into one share of Common Stock and automatically converts into

one share of Common Stock on the four-year anniversary of its issuance.

As of December 31, 2021, no Series

A Convertible Preferred Stock has been issued by the Company.

Increasing the Authorized

On March 12, 2020, our board

of directors approved and adopted an amendment to the Company’s Articles of Incorporation, to increase the authorized shares of

the common stock, par value $0.001 per share, from 20,000,000 to 100,000,000, such that, after including the previously authorized 20,000,000

shares of preferred stock, par value $0.001 per share, the aggregate number of shares of stock that the Company has authority to issue

is 120,000,000 shares.

The amendment became effective on April 2, 2020.

NASDAQ Listing

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

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

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

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

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

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

the exercise price of

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

The Company completed the

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

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

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

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

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

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

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

Offering was conducted on a firm commitment basis.

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

trading under the ticker symbol “ABVC” on August 3, 2021.

Name Change and CUSIP Number

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

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

they also approved

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

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

After FINRA approval, the new name took effect.

Stock certificates

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

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

stock certificates remain valid.

The Company’s CUSIP number is 0091F106.

On August 5, 2021, we closed

a public offering (the “Offering”) of 1,100,000 units (the “Units”), with each Unit consisting of one

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

one share of common stock at an exercise price equal to $6.30 per share, exercisable until the fifth anniversary of the issuance

date, and one Series B warrant (the “Series B Warrants,” and together with the Series A Warrants, the “Public Warrants”)

to purchase one share of common stock at an exercise price equal to $10.00 per share, exercisable until the fifth anniversary of

the issuance date;

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

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

333-255112), originally filed

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

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

333-258404) that was filed and

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

The Units were priced at $6.25 per Unit, before underwriting discounts and offering expenses, resulting in gross

proceeds of $6,875,000.

The Offering was conducted on a firm commitment basis.

The Common Stock was approved for listing on The Nasdaq

Capital Market and commenced trading under the ticker symbol “ABVC” on August 3, 2021.

19, 2022, we received a deficiency letter from the Nasdaq Listing Qualifications Department (the “ Staff ”) of the Nasdaq

Stock Market LLC (“ Nasdaq ”) notifying the Company that, for the last 30 consecutive business days, the closing bid

price for the Company’s common stock has been below the minimum $1.00 per share required for continued listing on The Nasdaq Capital

Market pursuant to Nasdaq Listing Rule 5550(a)(2) (“ Rule 5550(a)(2) ”).

The Nasdaq deficiency letter has no immediate

effect on the listing of the Company’s common stock, and its common stock will continue to trade on The Nasdaq Capital Market under

the symbol “ABVC” at this time.

In accordance

with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been given 180 calendar days, or until February 14, 2023, to regain compliance

with Rule 5550(a)(2).

If at any time before February 14, 2023, the bid price of the Company’s common stock closes at $1.00 per

share or more for a minimum of 10 consecutive business days, the Staff will provide written confirmation that the Company has achieved

Company does not regain compliance with Rule 5550(a)(2) by February 14, 2023, the Company may be afforded a second 180 calendar day period

to regain compliance.

To qualify, the Company would be required to meet the continued listing requirement for market value of publicly

held shares and all other initial listing standards for The Nasdaq Capital Market, except for the minimum bid price requirement.

the Company would be required to provide written notice to Nasdaq of its intent to cure the deficiency during the second compliance period,

by effecting a reverse stock split, if necessary.

Company intends to actively monitor the closing bid price for its common stock and will consider available options to resolve the deficiency

and regain compliance with Rule 5550(a)(2).

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.

Joint Venture Agreement

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

BioPharma, Inc.

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

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

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

Biolite JP is a private limited company (a Japanese Kabushiki

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

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

Immediately prior to the execution of the Agreement, Lucidaim

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

The Shareholders entered into the joint venture to formally reduce

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

The business of the joint venture shall be the research

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

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

from time to time.

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

which have all been received.

On October 6, 2021 (the “ Completion

Date ”), ABVC BioPharma, Inc.

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

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

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

Biolite JP is a private limited company (a

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

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

Immediately prior to the execution

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

The Shareholders entered into the

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

The business of the

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

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

the Agreement may with mutual consent be amended from time to time.

The closing of the transaction was conditioned upon the approval

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

Pursuant to the Agreement and the related share

10 unchanged sentences

occurred on the Completion Date.

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

business and operations of Biolite JP.

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

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

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

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

The Agreement also sets forth certain corporate actions that must

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

If the Shareholders are unable to make a decision on

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

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

If such dispute is not resolved within 10 days

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

As per the Agreement, the Shareholders shall

supervise and manage the business and operations of Biolite JP.

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

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

If a Shareholder sells or disposes of all

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

The Agreement also sets forth certain corporate

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

If the Shareholders are unable to

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

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

If such dispute is not resolved

within 10 days thereafter, then either Shareholder can offer to buy all of the other Shareholder’s Ordinary Shares for cash at

a specified price;

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

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PDC-1421 in either low dose (380 mg) or high dose (2 x 380 mg) compared with placebo administration, three times a day for six weeks.

PDC-1421 high dose (2 x 380 mg) met the pre-specified primary endpoint by demonstrating a highly significant 13.2-point reduction in

the Montgomery-Åsberg Depression Rating Scale (MADRS) total score by Intention-To-Treat (ITT) analysis, averaged over the 6-week

treatment period (overall treatment effect) from baseline, as compared to 9.2-point reduction of the placebo group.

By Per-Protocol (PP)

analysis, PDC-1421 showed a dose dependent efficacy toward MDD in which high dose (2 x 380 mg) gave 13.4-point reduction in MADRS total

score from baseline and low dose (380 mg) gave 10.4-point reduction as compared to a 8.6-point in the placebo group.

The Company has

decided to use the high dose formula in the Phase III clinical trial of ABV-1504.

PDC-1421 high dose (2 x 380 mg) met the pre-specified primary endpoint by demonstrating a highly significant 13.2-point reduction in the

Montgomery-Åsberg Depression Rating Scale (MADRS) total score by Intention-To-Treat (ITT) analysis, averaged over the 6-week treatment

period (overall treatment effect) from baseline, as compared to 9.2-point reduction of the placebo group.

By Per-Protocol (PP) analysis,

PDC-1421 showed a dose dependent efficacy toward MDD in which high dose (2 x 380 mg) gave 13.4-point reduction in MADRS total score from

baseline and low dose (380 mg) gave 10.4-point reduction as compared to a 8.6-point in the placebo group.

The completed Phase II clinical

study indicated that the drug can be administered chronically over at least 42 days with the daily dose administered three times per day,

wherein each dose contains from 380 mg to 760 mg of the botanical extraction.

On October 20, 2022, the Company received a Notice of Allowance for

ABV-1504 from the US Patent and Trademark Office that extends the existing patent life of ABV-1504 from 2021 to the year 2041.

entitled “Polygala Extract for the Treatment of Major Depressive Disorder,” outlines a method for treating major depressive

disorder by oral administration of a composition, ABV-1504, containing Radix Polygalae (Polygala tenuifolia Willd).

The polygala extract,

designated PDC-1421, is the key active ingredient in ABV-1504 which was orally administered to healthy volunteers and proved to be safe

and well-tolerated for a daily dose from 380 mg to 3800 mg.

On September 9, 2020 the Company issued a full

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

The Phase II clinical

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

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

In parallel, Vitargus Phase II Study protocol documents are

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

Upon approval,

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

clinical initiation in Australia.

On November 2,

2022, both hospitals received Thai FDA investigational product (IP) import licenses allowing them to initiate the clinical study in Thailand.

The Phase II clinical study entitled “A Prospective Multi-Site Randomized Controlled Clinical Investigation of the Safety and Effectiveness

of the ABV1701 Ocular Endotamponade (OE)” will be initiated in Thailand.

In parallel, Vitargus Phase II Study protocol

documents were accepted by the Australian Bellberry Human Research Ethics Committee (HREC) and a Clinical Trial Notification (“CTN”)

was submitted to the Australian Therapeutic Goods Administration (TGA) to initiate the study in Australia.

On November 9, 2020 the Company issued a full

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

On July 12, 2022, the Company announced the enrollment

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

Since the first-treated subject reported

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

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

The study, a randomized, double-blind,

placebo-controlled study entitled “A Phase II Tolerability and Efficacy Study of PDC-1421 Treatment in Adult Patients with Attention-Deficit

Hyperactivity Disorder (ADHD), Part II, is expected to eventually involve approximately 100 patients.

Five prestigious research hospitals

in Taiwan and the research hospital at the University of California, San Francisco are participating in the study which is a continuation

of the Phase II part 1 study of ABV-1505 completed successfully at UC, San Francisco and accepted by the U.S.

Food & Drug Administration

in October of 2020.

On July 12, 2022, the Company announced the enrollment progress in

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

Since the first-treated subject reported on May 10,

2022, a total of thirty-five (35) subjects have been enrolled in the study, including 20 who have completed the 56-day treatment.

study, a randomized, double-blind, placebo-controlled study entitled “A Phase II Tolerability and Efficacy Study of PDC-1421 Treatment

in Adult Patients with Attention-Deficit Hyperactivity Disorder (ADHD), Part II, is expected to eventually involve approximately 100 patients.

Five prestigious research hospitals in Taiwan and the research hospital at the University of California, San Francisco (UCSF) are participating

in the study which is a continuation of the Phase II part 1 study of ABV-1505 completed successfully at UCSF and accepted by the U.S.

Food & Drug Administration in October of 2020.

The UCSF Medical Center Institutional Review Board has approved participation in the

Part 2 study, which the Company expects to start setting up in the first quarter of 2023.

On November 4, 2020, we executed an amendment

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effective as current products on the market.

The Cedars-Sinai Medical Center (CSMC, West Hollywood CA) Institutional

Review Board (IRB) has approved their institution joining the Phase I study of ABV-1601 for treating depression in cancer patients.

Principal Investigator of the CSMC study will be Dr.

Irwin, MD, PhD., an eminent Professor of Psychiatry & Behavioral Neurosciences.

The Phase I study is open label and will be conducted with 12 cancer patients with moderate to severe depressive symptoms.

The main objective

of the study is to evaluate the safety of PDC-1421, the primary active ingredient in ABV-1601.

The second objective is to determine the

most effective dosages for a randomized, double-blind, non-inferiority Phase II trial of PDC-1421 that ABVC expects to initiate in 2023.

The Company then intends to compare results of the Phase II study of ABV-1601 to Wellbutrin XL, a commonly used medicine to treat cancer

patients suffering with depression.

Public Offering & Financings

Financing in May 2022

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

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

in a registered direct offering.

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

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

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

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

On May 11, 2022, the Company and an institutional

investor entered into certain securities purchase agreement relating to the offer and sale of 2,000,000 shares of common stock, par value

$0.001 per share in a registered direct offering.

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

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

The sale and offering of the shares and the warrants

pursuant to such securities purchase agreement was implemented as a takedown off the Company’s shelf registration statement on

Form S-3, as amended (File No.

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

WallachBeth Capital LLC and ViewTrade Securities, Inc.

acted as co-placement

agents for the aforementioned offering of the shares and warrants.

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

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

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

WallachBeth Capital LLC and ViewTrade Securities,

acted as co-placement agents for the aforementioned offering of the shares and warrants.

The Company paid to the co-placement agents

an aggregate cash fee equal to 8% of the aggregate sales price of the securities sold and issued them warrants to purchase up to 160,000

shares of Common Stock, on the same terms as the warrants issued to the institutional investor.

Financing in August 2021

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

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

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

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.

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.

1 to Promissory

Note (the “Amendment”).

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

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

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

On July 21, 2021, The Company converted

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

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

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

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

of conversion (“ Note Warrants ”).

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

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

1 to Promissory Note (the “Amendment”).

Pursuant to the Amendment, the Note shall also be automatically converted into shares

of the Company’s common stock immediately following the Company’s receipt of conditional approval to list its common stock

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

2021, The Company converted its convertible promissory note totaling $2,500,000 into 1,111,112 shares of the Company’s

common stock and warrants.

In connection with the October Note and pursuant

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

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

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

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

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

The issuance and sale of the Common Stock, the

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Financing in May 2020

In May 2020, the Company received capital contributions of approximately

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

warrant attached to each Common stock that was purchased.

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

price of $9.00.

In May 2020, the Company received capital contributions

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

per share and a free warrant attached to each Common stock that was purchased.

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

a mandatory exercise price of $9.00.

Pursuant to the terms of an agreement entered

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Financing in April 2020

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

with existing note investors who executed the agreements in 2018.

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

Keypoint Technology Ltd., and Yoshinobu Odaira.

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

contract in 2019.

On January 21, 2020, the Company entered into

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

These three investors are Guoliang Yu and Yingfei

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

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

who executed the contract in 2019.

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

Pursuant to the exchange agreements,

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

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

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

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

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

Shan Tyan, and Liu, Ching Hsuan.

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

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

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

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

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

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

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

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

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

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

each note holder.

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

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

common stock.

Key elements of our business strategy include:

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

to generate revenues in the future.

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

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

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

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

Advancing to the pivotal trial phase of ABV-1701 Vitargus®

for the treatments of Retinal Detachment or Vitreous Hemorrhage, which we expect to generate revenues in the future.

Focusing on licensing ABV-1504 for the treatment of

major depressive disorder, MDD.

Completing Phase II, Part 2 clinical trial for ABV-1505

for the treatment of attention deficit hyperactivity disorder, ADHD.

Out licensing drug candidates and medical device candidates

to major pharmaceutical companies for phase III and pivotal clinical trials, as applicable, and further marketing if approved by

We plan to augment our core research and development

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CNS, Hematology/Oncology and Ophthalmology.

Our management team has extensive experiences across a wide range of

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

and universities in both the U.S.

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

portfolio of Oncology/ Hematology, CNS and Ophthalmology products.

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

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

we do not expect to devote substantial efforts and resources to

building the disease-specific distribution channels.

Our management team has extensive experiences

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

research institutes and universities in both the U.S.

Through an assertive product development approach, we expect that we

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

We primarily focus on Phase I and II research

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

we do not expect to devote substantial

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

Business Objectives

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

● nonrefundable

upfront license fees,

● development

and commercial milestones,

or complete reimbursement of research and development costs and

on net sales of licensed products.

nonrefundable 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 revenue except

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

The Company had multiple deliverables under the collaborative agreements,

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

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

Significant factors considered

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

in conducting clinical development, regulatory and manufacturing activities.

The Company reviews the estimated duration of its performance

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

Future changes

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

The Company had multiple deliverables under the

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

marketing activities.

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

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

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

The Company reviews the

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

on a prospective basis.

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

of future revenue recognition.

(i) Nonrefundable upfront payments

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

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

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

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

and benefit from the license.

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

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

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

If a license to the Company’s intellectual

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

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

the total selling price of the arrangement.

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

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

To date, the receipt of nonrefundable upfront fees was solely

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

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

(ii) Milestone payments

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Collaborative agreements with BHK

February and December of 2015, BioLite, Inc.

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

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

The agreements granted marketing rights to

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

or equity securities owned by BioHopeKing.

The milestone payments are determined by a schedule

of BioLite development achievements as shown below:

Execution of BHK Co-Development Agreement

Investigational New Drug (IND) Submission

Phase II Clinical Trial Complete

Initiation of Phase III Clinical Trial

New Drug Application (NDA) Submission

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

The Company concluded that

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

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

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

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

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

December 31, 2016.

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

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

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

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

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

(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.

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:

$1 million, or 10% of total payment

Upon the first Investigational New Drug (IND) submission and BioLite Taiwan will deliver all data to BHK according to FDA Reviewing requirement:

$1 million, or 10% of total payment

At 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:

$3 million, or 30% of total payment

Upon 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.

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 September 30, 2022 and December

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

(ii) On December 9, 2015, BioLite Taiwan entered

into another two collaborative agreements (the “BHK Collaborative Agreements”), pursuant to which it is collaborative with

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.

In 2015, the Company recognized the cash receipt

in a total of NT$50 million, approximately equivalent to $1.6 million, as collaboration revenue when all research, technical, and development

data was delivered to BHK.

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 payment as collaboration revenue when all research, technical, data

and development data was delivered to BHK.

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

BioLite Taiwan before this BHK Collaborative Agreements was signed and it does not relate to any future commitments made by BioLite Taiwan

and BHK in this BHK Collaborative Agreements.

In addition to the total of NT$50 million, approximately

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

As of 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,

a related party

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

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

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

Pursuant to the Rgene Agreement, BriVision and Rgene agreed

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

and ABV-1527 Ovary Cancer Combination Therapy.

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

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

made by BriVision before the Rgene Agreement was executed.

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

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

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

On June 1, 2017, the Company delivered all research,

technical data and development data to Rgene pursuant to the Rgene Agreement in return for a cash payment of $450,000 and 1,530,000 common

shares of Rgene stock valued at $2,550,000, which in 2018 was accounted for using the equity method long-term investment.

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, the regulatory or economic environment, changes in operating structure of Rgene, additional funding requirements and Rgene’s

ability to remain in business.

All research projects that were initiated will be managed and funded equally by the Company and Rgene.

On May 26, 2017, BriVision entered into a co-development

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

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

Pursuant to Co-Dev Agreement, BriVision

and Rgene agreed to co-develop and commercialize ABV-1507 HER2/neu Positive Breast Cancer Combination Therapy, ABV-1511 Pancreatic Cancer

Combination Therapy and ABV-1527 Ovary Cancer Combination Therapy.

Under the terms of the Co-Dev Agreement, Rgene is required to pay

the Company $3,000,000 in cash or stock of Rgene with equivalent value by August 15, 2017.

The payment is for the compensation of BriVision’s

past research efforts and contributions made by BriVision before the Co-Dev Agreement was signed and it does not relate to any future

commitments made by BriVision and Rgene in this Co-Dev Agreement.

In addition to $3,000,000, the Company is entitled to receive 50% of

the future net licensing income or net sales profit earned by Rgene, if any, and any development costs shall be equally shared by both

BriVision and Rgene.

On June 1, 2017, the Company has delivered all

research, technical, data and development data to Rgene.

Since both Rgene and the Company are related parties and under common control

by a controlling beneficiary shareholder of YuanGene Corporation and the Company, the Company has recorded the full amount of $3,000,000

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

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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,

a related party

On July 24, 2017, the Company entered into a

collaborative agreement (the “BioFirst Agreement”) with BioFirst Corporation, a corporation incorporated under the laws of

Taiwan (“BioFirst”), pursuant to which BioFirst granted the Company global licensing rights to medical use of ABV-1701 Vitreous

Substitute for Vitrectomy.

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

and the Company is a Director and shareholders of BioFirst (See Note 12).

Pursuant to the BioFirst Agreement, the Company

and BioFirst will co-develop and commercialize BFC-1401.

The Company will pay BioFirst a total amount of $3,000,000 in cash or stock

of the Company before September 30, 2018 as payment in full for BioFirst’s past research efforts and contributions made by BioFirst

before the BioFirst Agreement was executed.

The Company is entitled to receive 50% of any future net licensing revenue or net profit

associated with Vitargus®.

All development cost will be equally shared by both BriVision and BioFirst.

On September 25, 2017, BioFirst delivered all

research, technical, data and development data to the Company.

For the year ended September 30, 2017, the Company determined to fully

expense the entire amount of $3,000,000 since the related licensing rights do not have alternative future uses.

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 immediately.

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

during the year ended September 30, 2017.

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

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

On 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).

Pursuant to the BioFirst Collaborative Agreement,

the Company will co-develop and commercialize the Product with BioFirst and pay BioFirst in a total amount of $3,000,000 in cash or stock

of the Company before September 30, 2018.

The amount of $3,000,000 is in connection with the compensation for BioFirst’s past research

efforts and contributions made by BioFirst before the BioFirst Collaborative Agreement was signed and it does not relate to any future

commitments made by BioFirst and BriVision in this BioFirst Collaborative Agreement.

In addition, the Company is entitled to receive 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

On September 25, 2017, BioFirst has delivered

all research, technical, data and development data to BriVision.

The Company determined to fully expense the entire amount of $3,000,000

since currently the related licensing rights do not have alternative future uses.

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

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

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

BioFirst Agreement.

On August 5, 2019, the Company entered into a

second Stock Purchase Agreement with BioFirst whereby the Company issued 414,702 shares of the Company’s common stock to BioFirst

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

On November 4, 2020, the Company executed an amendment

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

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

during a variety of ocular procedures.

Initially the Company will focus on ABV-2002,

a solution utilized to store a donor cornea prior to either penetrating keratoplasty (full thickness cornea transplant) or endothelial

keratoplasty (back layer cornea transplant).

ABV-2002 is a solution comprised of a specific poly amino acid that protects ocular tissue

from damage caused by external osmolarity exposure during pre-surgery storage.

The specific polymer in ABV-2002 can adjust osmolarity

to maintain a range of 330 to 390 mOsM thereby permitting hydration within the corneal stroma during the storage period.

Stromal hydration

results in (a) maintaining acceptable corneal transparency and (b) prevents donor cornea swelling.

ABV-2002 also contains an abundant

phenolic phytochemical found in plant cell walls that provides antioxidant antibacterial properties and neuroprotection.

Early testing by BioFirst indicates that ABV-2002

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

manufactured at lower cost.

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

510(K) submission to the FDA before the end of 2021 to demonstrate the device is at least as safe and effective as current products on

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.

On August 5, 2019, BriVision entered into a second

Stock Purchase Agreement (“Purchase Agreement 2”) with BioFirst Corporation.

Pursuant to Purchase Agreement 2, the Company

issued 414,702 shares of the Company’s common stock to BioFirst in consideration for $2,902,911 owed by the Company to BioFirst

in connection with a loan provided to BriVision from BioFirst.

Co-Development agreement with BioLite Japan

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

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

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

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

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

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

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

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

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

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

The closing of the transaction is conditioned

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

On October 6, 2021 (the “ Completion

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

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

Joint Venture Agreement (the “ Agreement ”).

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

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

issued and outstanding (the “ Ordinary Shares ”).

Immediately prior to the execution of the Agreement, Lucidaim owned

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

The Shareholders entered into the joint venture to formally reduce

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

The business of the joint venture shall be the research

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

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

to the Agreement.

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

which have been received.

Pursuant to the Agreement and the related share

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The aforementioned transactions occurred on the Completion

As per the Agreement, the Shareholders shall supervise

and manage the business and operations of Biolite.

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

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

If a Shareholder sells or disposes of all of its Ordinary

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

The Agreement also sets forth certain corporate actions

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

If the Shareholders are unable to make a decision

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

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

If such dispute is not resolved within 10 days

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

As per the Agreement, the Shareholders shall

supervise and manage the business and operations of Biolite.

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

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

If a Shareholder sells or disposes of all

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

The Agreement also sets forth certain

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

If the Shareholders are

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

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

If such dispute

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

for cash at a specified price;

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

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

Accordingly, the Company may be liable

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

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

has sufficient cash to do so.

Accordingly, the Company may be

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

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

it has sufficient cash to do so.

Pursuant to the Agreement, the Company and Biolite

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

The majority shareholder

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

Jiang, the Company’s

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

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

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

Pursuant to the Agreement, the Company acquired

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

This was a related party transaction and was conducted

at arm’s length.

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

Company’s audit committee approved them too.

This was a related party transaction and was

conducted at arm’s length.

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

the Company’s audit committee approved them too.

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

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In addition, BioKey provides a variety of regulatory

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

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

In addition to

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

with new electronic submission guidelines of the FDA.

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

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

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

in compliance with new electronic submission guidelines of the FDA.

Impact of COVID-19 Outbreak

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

As constraints on social distancing were gradually lifted around

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

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

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

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

The global pandemic of COVID-19 continues to evolve

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

Additionally, it is reasonably possible that estimates

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

including losses on inventory;

As constraints on social distancing were gradually lifted

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

While we believe that underlying demand is still not yet

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

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

levels worldwide.

The global pandemic of COVID-19 continues to

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

Additionally, it is reasonably possible that

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

conditions, including losses on inventory;

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

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

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

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-Q reflect

this 1-for-18 reverse stock split.

The Financial Industry Regulatory Authority (“FINRA”)

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

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

reflect this 1-for-18 reverse stock split.

Fair Value Measurements

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

Observable inputs are inputs that reflect the

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

Observable inputs are inputs that reflect

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

of the Company.

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

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.

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.

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.

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;

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.

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.

The Company 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 purchase.

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

recognizes revenue based on the types of payments the Company receives.

Collaborative Revenues — The Company

recognizes collaborative revenues generated through collaborative research, development and/or commercialization agreements.

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.

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

Revenue is recognized

upon satisfaction of a performance obligation by transferring control of a good or service to the collaboration partners.

As part of the accounting for these arrangements,

the Company applies judgment to determine whether the performance obligations are distinct, and develop assumptions in determining the

stand-alone selling price for each distinct performance obligation identified in the collaboration agreements.

To determine the stand-alone

selling price, the Company relies on assumptions which may include forecasted revenues, development timelines, reimbursement rates for

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

The Company had multiple deliverables under the

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

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.

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

of future revenue recognition.

(i) Non-refundable upfront payments

If a license to the Company’s intellectual

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

from the related non-refundable upfront payments based on the relative standalone selling price prescribed to the license compared to

the total selling price of the arrangement.

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

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

To date, the receipt of 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

(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 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.

(iii) Multiple Element Arrangements

The Company evaluates multiple element arrangements

to determine (1) the deliverables included in the arrangement and (2) whether the individual deliverables represent separate units of

accounting or whether they must be accounted for as a combined unit of accounting.

This evaluation involves subjective determinations

and requires management to make judgments about the individual deliverables and whether such deliverables are separate from other aspects

of the contractual relationship.

Deliverables are considered separate units of accounting provided that:

(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

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

The Company also

considers whether its collaboration partners can use the other deliverable(s) for their intended purpose without the receipt of the remaining

element(s), whether the value of the deliverable is dependent on the undelivered item(s), and whether there are other vendors that can

provide the undelivered element(s).

The Company recognizes arrangement consideration

allocated to each unit of accounting when all of the revenue recognition criteria in ASC 606 are satisfied for that particular unit of

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.

At the inception of an arrangement that includes milestone payments,

the Company evaluates whether each milestone is substantive and at risk to both parties on the basis of the contingent nature of the milestone.

This evaluation includes an assessment of whether:

(1) the consideration is commensurate with either the Company’s 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.

(iv) Royalties and Profit Sharing Payments

Under the collaborative agreement with the collaboration

partners, the Company is entitled to receive royalties on sales of products, which is at certain percentage of the net sales.

recognizes revenue from these events based on the revenue recognition criteria set forth in ASC 606.

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

Revenues Derived from Research and Development

Activities Services — Revenues related to research and development and regulatory activities are recognized when the related services

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

If the Company determines

an option is a material right, the Company will consider the option a separate performance obligation.

If the Company is entitled to reimbursement from

its customers for specified research and development expenses, the Company accounts for the related services that it provides as separate

performance obligations if it determines that these services represent a material right.

The Company also determines whether the reimbursement

of research and development expenses should be accounted for as revenues or an offset to research and development expenses in accordance

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 then determines the transaction price

by reviewing the amount of consideration the Company is eligible to earn under the contracts, including any variable consideration.

the outstanding contracts, consideration typically includes fixed consideration and variable consideration in the form of potential milestone

At the start of an agreement, the Company’s transaction price usually consists of the payments made to or by the Company

based on the number of full-time equivalent researchers assigned to the project and the related research and development expenses incurred.

The Company does not typically include any payments that the Company may receive in the future in its initial transaction price because

the payments are not probable.

The Company would reassess the total transaction price at each reporting period to determine if the Company

should include additional payments in the transaction price.

The Company receives payments from its customers based on billing schedules

established in each contract.

Upfront payments and fees may be recorded as advance from customers upon receipt or when due, and may require

deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements.

Amounts are recorded

as accounts receivable when the right of the Company to consideration is unconditional.

The Company does not assess whether a contract

has a significant financing component if the expectation at contract inception is such that the period between payment by the customers

and the transfer of the promised goods or services to the customers will be one year or less.

Property 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:

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:

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

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:

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;

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.

Non-marketable equity investments based on the Company’s assessment

of the severity and duration of the impairment, and qualitative and quantitative analysis of the operating performance of the investee;

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

changes in operating structure or management of the investee;

changes in operating structure or management of

the investee;

additional funding requirements;

and the investee’s ability to remain in business.

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

A series of operating losses

of an investee or other factors may indicate that a decrease in value of the investment has occurred that is other than temporary

and that shall be recognized even though the decrease in value is in excess of what would otherwise be recognized by application

of the equity method.

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

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

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

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

Evidence of a

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

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

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

gains (losses) on equity investments.

Other-than-temporary impairments of equity investments were $0 for the three and 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.

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 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.

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

and 2021, respectively.

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

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.

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

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.

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

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

non-employee stock-based compensation expenses were $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.

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

Total 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.

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

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

Under ASC 740, a tax position is recognized as

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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.

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.

Estimates and Assumptions

In preparing our consolidated financial statements,

we use estimates and assumptions that affect the reported amounts and disclosures.

Our estimates are often based on complex judgments,

probabilities and assumptions that we believe to be reasonable, but that are inherently uncertain and unpredictable.

We are also subject

to other risks and uncertainties that may cause actual results to differ from estimated amounts.

will have on its unaudited consolidated financial statements.

Results of Operations — Three Months

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

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

The following table presents, for the three months

indicated, our consolidated statements of operations information.

September 30,

Cost of revenues

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Other (expense) income

Government grant income

Total other income (expense)

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Basic and diluted

We generated $312,860

and $31,441 in revenues for the three months ended June 30, 2022 and 2021, respectively.

The increase in revenues was mainly due to the

revenue generated from the clinical development service agreement signed between BioKey and Rgene.

We generated $42,269 and $98,999 in revenues for the three months ended

September 30, 2022 and 2021, respectively.

The decrease in revenues was mainly due to the completion of certain contract services during

Operating Expenses.

Our operating

expenses have increased by $285,043, or 14%, to $2,351,353 for the three months ended June 30, 2022 from $2,066,310 for the three months

ended June 30, 2021.

Such increase in operating expenses was mainly attributable to the increase in selling, general and administrative

expenses by $361,139 which relates to costs in conjunction with our recent stock issuance, and increase in research and development expenses

of $173,904 to continue developing our pipeline, while being offset by the decrease in stock-based compensation by $250,000.

Our operating expenses have increased by $1,678,209, or 81%, to $3,747,369

for the three months ended September 30, 2022 from $2,069,160 for the three months ended September 30, 2021.

Such increase in operating

expenses was mainly attributable to the increase in selling, general and administrative expenses by $1,636,150 which relates to costs

in conjunction with our recent stock issuance, and increase in research and development expenses of $42,059 to continue developing our

Other Income (Expense).

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

was principally caused by the increase in interest income and decrease in interest expense, as well as the loss on investment in

equity securities which occurred in the six months ended June 30, 2021.

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

the three months ended June 30, 2022, compared to $(71,949) for the three months ended June 30, 2021.

The increase of $96,206, or approximately

134%, was primarily due to the repayment of convertible notes payable during the year ended 2021.

As a result of the

above factors, our net loss was $1,947,333 for the three months ended June 30, 2022 compared to $2,052,956 for the three months ended

June 30, 2021, representing a decrease of $105,623, or 5%.

Results of Operations — Six Months Ended

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

The following table presents, for the six months

(expense) income was $(56,461) for the three months ended September 30, 2022, compared to $8,643 for the three months ended September

The change was principally caused by the increase in interest expense, while being offset by the increase in interest income

for the three months ended September 30, 2022,and loss on investment in equity securities and government grant income for the three months

ended September 30, 2021.

Interest income (expense), net, was $(78,372)

for the three months ended September 30, 2022, compared to $(29,344) for the three months ended September 30, 2021.

The increase of $49,028,

or approximately 167%, was primarily due to the increase in interest expense due to recognition of interest expense for the converted

notes for proper accounting purpose.

As a result of the above factors, our net loss was $3,776,524 for the

three months ended September 30, 2022 compared to $1,886,244 for the three months ended September 30, 2021, representing an increase of

$1,890,280, or 100%.

Results of Operations — Nine Months

Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021.

The following table presents, for the nine months

indicated, our consolidated statements of operations information.

September 30,

Cost of revenues

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Loss from operations

(11,869,787 )

Other income (expense)

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Loss before provision income tax

(11,976,568 )

Provision for income tax

(11,811,472 )

Net loss attributable to noncontrolling interests

Net loss attributed to ABVC and subsidiaries

(11,559,301 )

Foreign currency translation adjustment

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Basic and diluted

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

The increase in revenue was

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

We generated $380,789 and $393,590 in revenues for the nine months ended

September 30, 2022 and 2021, respectively.

The decrease in revenue was mainly due to the decrease in CDMO sector.

Operating Expenses.

Our operating

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

ended June 30, 2021.

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

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

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

Our operating expenses have increased by $6,691,087, or 118%, to $12,341,207

for the nine months ended September 30, 2022 from $5,650,120 for the nine months ended September 30, 2021.

Such increase in operating

expenses was mainly attributable to the increase in stock-based compensation and selling, general and administrative expenses by $6,237,035

which relates to costs in conjunction with our recent stock issuance, as well as the increase in research and development expenses of

$454,052 to continue developing our pipeline.

Other Income (Expense) .

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

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

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

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

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

The increase of $195,868, or approximately

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

Government grant income totaled $0 for the six

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

of PPP loan forgiveness.

As a result of the

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

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

income (expense), net was $4,854 for the nine months ended September 30, 2022, compared to $(61,964) for the nine months ended September

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

and government grant income which occurred in the nine months ended September 30, 2021.

Interest income (expense), net, was $(32,153)

for the nine months ended September 30, 2022, compared to $(178,993) for the nine months ended September 30, 2021.

The decrease of $146,840,

or approximately 82%, was primarily due to the repayment of convertible notes payable during the year ended 2021.

Government grant income totaled $0 for the nine

months ended September 30, 2022, compared to $256,731 for the nine months ended September 30, 2021, which was recorded as receipt of

the first round of PPP loan forgiveness.

As a result of the above factors, our net loss was $11,811,472 for

the nine months ended September 30, 2022 compared to $5,134,523 for the nine months ended September 30, 2021, representing an increase

of $6,676,949, or 130%.

Liquidity and Capital Resources

Working Capital

September 30,

Current Assets

Current Liabilities

Working Capital

Working (Deficit) Capital

Cash Flow from Operating Activities

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

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

During the nine months ended September 30, 2022 and 2021, the net cash

used in operating activities were $6,937,322 and $5,073,103, respectively.

The increase in the amount used in operating activities of

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

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

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

$1,864,219 was primarily due to the increased amount due from related parties, inventory, accounts payable, non-cash stock-based compensation

for nonemployees, and decreased accounts receivable, prepaid expenses and deposits, accrued expenses and other current liabilities, investment

loss, deferred tax, advance from others, non-cash government grant income and increase in net loss during the nine months ended September

Cash Flow from Investing Activities

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

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

The decreases were mainly due to the prepayment for equity investment

during the six months ended June 30, 2021.

During the nine months ended September 30, 2022

and 2021, the net cash used in investing activities were $1,638,396 and $1,232,812 respectively.

The decreases were mainly due to

the increase in purchase of equipment during nine months ended September 30, 2022, as well as cash used in purchase of investments and

prepayment for equity investment during the nine months ended September 30, 2021.

Cash Flow from Financing Activities

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

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

The increase in net cash provided by financing activities

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

the six months ended June 30, 2022.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT

During the nine months ended September 30, 2022 and 2021, the net cash

provided by financing activities were $4,267,425 and $5,742,737, respectively.

The decrease in net cash provided by financing activities

was primarily due to the decrease in issuance of common stock and proceeds from short-term loans during the nine months ended September

31, 2022, and payment for offering cost, proceeds from long-term bank loans and repayment of convertible notes, notes payable and long-term

bank loans during the nine months ended September 30, 2021.

QUANTITATIVE AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISK.

As a smaller reporting company, we are not required

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis