Exhibit 99.2
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
On November 12, 2023, the Company and one of its subsidiaries, BioLite, Inc. (“BioLite”) each entered into a multi-year, global licensing agreement with AiBtl BioPharma Inc. (“AIBL”, or the acquired company) for the Company and BioLite’s CNS drugs with the indications of MDD (Major Depressive Disorder) and ADHD (Attention Deficit Hyperactivity Disorder) (collectively, the “Licensed Products”). The potential license will cover the Licensed Products’ clinical trial, registration, manufacturing, supply, and distribution rights. The Licensed Products for MDD and ADHD, owned by ABVC and BioLite, were valued at $667M by a third-party evaluation. The parties are determined to collaborate on the global development of the Licensed Products. The parties are also working to strengthen new drug development and business collaboration, including technology, interoperability, and standards development. As per each of the respective agreements, each of ABVC and BioLite received 23 million shares of AIBL stock (with an expected value of $10 per share) and as a result, the Company has a controlling interest over AIBL. If certain milestones are met, the Company and BioLite are each eligible to receive $3,500,000 and royalties equaling 5% of net sales, up to $100 million.
The following unaudited pro forma combined financial information of the Company and AIBL is presented to illustrate the estimated effects of the condensed combined financial statements as of and for the nine-month period ended September 30, 2023.
UNAUDITED PRO FORMA COMBINED BALANCE SHEETS
As of September 30, 2023 | ||||||||||||||||
ABVC BioPharma, Inc. | AiBtl BioPharma Inc. | Pro Forma Adjustments | Pro Forma Combined | |||||||||||||
ASSETS | ||||||||||||||||
Current Assets | ||||||||||||||||
Cash and cash equivalents | $ | 500,069 | $ | - | - | $ | 500,069 | |||||||||
Restricted cash | 620,868 | - | - | 620,868 | ||||||||||||
Accounts receivable, net | 1,530 | - | - | 1,530 | ||||||||||||
Accounts receivable – related parties, net | 624,373 | - | - | 624,373 | ||||||||||||
Due from related party – current | 535,046 | - | - | 535,046 | ||||||||||||
Short-term Investment | 68,521 | - | - | 68,521 | ||||||||||||
Prepaid expenses and other current assets | 143,127 | - | - | 143,127 | ||||||||||||
Total Current Assets | 2,493,534 | - | - | 2,493,534 | ||||||||||||
Property and equipment, net | 7,953,936 | - | - | 7,953,936 | ||||||||||||
Operating lease right-of-use assets | 899,817 | - | - | 899,817 | ||||||||||||
Long-term investments | 2,677,395 | - | - | 2,677,395 | ||||||||||||
Deferred tax assets | 34,256 | - | - | 34,256 | ||||||||||||
Prepaid expenses – non-current | 128,898 | - | - | 128,898 | ||||||||||||
Security deposits | 44,259 | - | - | 44,259 | ||||||||||||
Prepayment for long-term investments | 1,429,016 | - | - | 1,429,016 | ||||||||||||
Due from related parties – non-current | 930,396 | - | - | 930,396 | ||||||||||||
Total Assets | $ | 16,591,507 | $ | - | - | $ | 16,591,507 | |||||||||
LIABILITIES AND EQUITY | ||||||||||||||||
Current Liabilities | ||||||||||||||||
Short-term bank loans | $ | 852,500 | $ | - | - | $ | 852,500 | |||||||||
Accrued expenses and other current liabilities | 3,558,213 | 597,388 | - | 4,155,601 | ||||||||||||
Contract liabilities | 79,501 | - | - | 79,501 | ||||||||||||
Operating lease liabilities – current portion | 392,666 | - | - | 392,666 | ||||||||||||
Due to related parties | 480,196 | - | - | 480,196 | ||||||||||||
Total Current Liabilities | 5,363,076 | 597,388 | - | 5,960,464 | ||||||||||||
Tenant security deposit | 5,680 | - | - | 5,680 | ||||||||||||
Operating lease liability – non-current portion | 507,151 | - | - | 507,151 | ||||||||||||
Convertible notes payable – third parties | 1,654,004 | - | - | 1,654,004 | ||||||||||||
Due to Director | - | 498 | - | 498 | ||||||||||||
Total Liabilities | 7,529,911 | 498 | - | 8,127,797 | ||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||||
Equity | ||||||||||||||||
Preferred stock, $0.001 par value, 20,000,000 authorized, nil shares issued and outstanding | - | - | - | - | ||||||||||||
Common stock, $0.001 par value, 10,000,000 authorized, 4,823,043 and 3,286,190 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively(1) | 4,823 | - | - | 4,823 | ||||||||||||
Additional paid-in capital | 80,662,290 | - | - | 80,662,290 | ||||||||||||
Stock subscription receivable | (677,220 | ) | - | - | (677,220 | ) | ||||||||||
Accumulated deficit | (62,309,161 | ) | (597,886 | ) | - | (62,907,047 | ) | |||||||||
Accumulated other comprehensive income | 519,123 | - | - | 519,123 | ||||||||||||
Treasury stock | (9,100,000 | ) | - | - | (9,100,000 | ) | ||||||||||
Total Stockholders’ Equity | 9,099,855 | (597,886 | ) | - | 8,501,969 | |||||||||||
Noncontrolling interest | (38,259 | ) | - | - | (38,259 | ) | ||||||||||
Total Equity | 9,061,596 | (597,886 | ) | - | 8,463,710 | |||||||||||
Total Liabilities and Equity | $ | 16,591,507 | $ | - | - | $ | 16,591,507 |
(1) | Prior period results have been adjusted to reflect the 1-for-10 reverse stock split effected on July 25, 2023. |
The accompanying notes are an integral part of these unaudited consolidated financial statements.
2
UNAUDITED PRO FORMA
COMBINED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS
Nine Months Ended September 30, 2023 | ||||||||||||||||
ABVC BioPharma, Inc. | AiBtl BioPharma Inc. | Pro Forma Adjustments | Pro Forma Combined | |||||||||||||
Revenues | $ | 150,265 | $ | - | - | $ | 150,265 | |||||||||
Cost of revenues | 162,831 | - | - | 162,831 | ||||||||||||
Gross (loss) profit | (12,566 | ) | - | - | (12,566 | ) | ||||||||||
Operating expenses | ||||||||||||||||
Selling, general and administrative expenses | 3,841,633 | 597,886 | - | 4,439,519 | ||||||||||||
Research and development expenses | 990,731 | - | - | 990,731 | ||||||||||||
Stock-based compensation | 1,409,969 | - | - | 1,409,969 | ||||||||||||
Total operating expenses | 6,242,333 | 597,886 | - | 6,840,219 | ||||||||||||
Loss from operations | (6,254,899 | ) | (597,886 | ) | - | (6,852,785 | ) | |||||||||
Other income (expense) | ||||||||||||||||
Interest income | 147,998 | - | - | 147,998 | ||||||||||||
Interest expense | (1,390,039 | ) | - | - | (1,390,039 | ) | ||||||||||
Operating sublease income | 53,900 | - | - | 53,900 | ||||||||||||
Gain/Loss on foreign exchange changes | (55,625 | ) | - | - | (55,625 | ) | ||||||||||
Other (expense) income | (1,174 | ) | - | - | (1,174 | ) | ||||||||||
Total other (expense) income | (1,244,940 | ) | - | - | (1,244,940 | ) | ||||||||||
Loss before income tax | (7,499,839 | ) | (597,886 | ) | - | (8,097,725 | ) | |||||||||
Provision for (benefit from) income tax | 80,696 | - | - | 80,696 | ||||||||||||
Net loss | (7,580,535 | ) | (597,886 | ) | - | (8,178,421 | ) | |||||||||
Net loss attributable to noncontrolling interests | (175,813 | ) | - | - | (175,813 | ) | ||||||||||
Net loss attributed to ABVC and subsidiaries | (7,404,722 | ) | - | - | (8,002,608 | ) | ||||||||||
Foreign currency translation adjustment | 1,995 | - | - | 1,995 | ||||||||||||
Comprehensive loss | $ | (7,402,727 | ) | $ | (597,886 | ) | - | $ | (8,000,613 | ) | ||||||
Net loss per share: | ||||||||||||||||
Basic and diluted | $ | (2.08 | ) | $ | - | - | $ | (2.25 | ) | |||||||
Weighted average shares used in computing net loss per share of common stock(1): | ||||||||||||||||
Basic and diluted | 3,555,474 | - | - | 3,555,474 |
(1) | Prior period results have been adjusted to reflect the 1-for-10 reverse stock split effected on July 25, 2023. |
The accompanying notes are an integral part of these unaudited consolidated financial statements.
3
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The pro forma financial information was prepared in conformity with Article 11 of Regulation S-X. The pro forma financial information for acquisitions was prepared using the acquisition method of accounting in accordance with Accounting Standards Codification 805, “Business Combinations” (“ASC 805”) and was derived from the audited historical financial statements of the Company and the acquired company.
The pro forma financial information has been prepared by the Company for illustrative and informational purposes only in accordance with Article 11. The pro forma financial information is not necessarily indicative of what the Company’s statement of comprehensive loss or balance sheet actually would have been had the Transaction and other adjustments relating to the Transaction been completed as of the dates indicated or will be for any future periods. The pro forma financial information does not purport to project the Company’s future financial position or results of operations following the completion of the Acquisition.
The Company is still in the process of performing a full review of the acquired companies’ accounting policies to determine if there are any additional material differences that require modification or reclassification of the acquired companies’ revenues, expenses, assets or liabilities to conform to the Company’s accounting policies and classifications. As a result of that review, the Company may identify differences between the accounting policies of the companies that, when conformed, could have a material impact on the pro forma financial information.
4