Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Apr. 08, 2019 | Jun. 29, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | American BriVision (Holding) Corp | ||
Entity Central Index Key | 0001173313 | ||
Amendment Flag | false | ||
Trading Symbol | ABVC | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2018 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Ex Transition Period | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Public Float | $ 123,664,830 | ||
Entity Common Stock, Shares Outstanding | 213,926,475 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash | $ 40,044 | $ 93,332 |
Restricted cash and cash equivalents | 16,093 | |
Receivable from collaboration partners - related parties | 2,550,000 | |
Due from related parties | 40,000 | |
Prepaid expenses | 136 | |
Total Current Assets | 96,273 | 2,643,332 |
Total Assets | 96,273 | 2,643,332 |
Liabilities and Stockholders’ Deficit | ||
Accrued expense | 555,449 | 170,927 |
Due to related parties | 4,462,775 | 4,229,320 |
Convertible notes payable, current portion | 300,000 | |
Convertible notes payable - related parties, current portion | 250,000 | |
Total Current Liabilities | 5,568,224 | 4,400,247 |
Noncurrent Liabilities | ||
Convertible notes payable - related parties | 250,000 | |
Accrued interest | 27,467 | |
Total Liabilities | 5,845,691 | 4,400,247 |
Commitments and Contingencies | ||
Stockholders' deficit | ||
Common Stock 360,000,000 authorized at $0.001 par value; shares issued and outstanding 213,926,475 and 213,746,647 at December 31, 2018 and December 31, 2017, respectively | 213,927 | 213,747 |
Additional paid-in capital | 13,914,556 | 13,805,936 |
Accumulated deficit | (19,877,901) | (15,776,598) |
Total stockholders' deficit | (5,749,418) | (1,756,915) |
Total Liabilities and Stockholders' Deficit | $ 96,273 | $ 2,643,332 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 360,000,000 | 360,000,000 |
Common stock, shares issued | 213,926,475 | 213,746,647 |
Common stock, shares outstanding | 213,926,475 | 213,746,647 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | ||
Revenues | ||
Cost of revenues | ||
Gross profit | ||
Operating expenses | ||
Selling, general and administrative expenses | 695,148 | 811,685 |
Research and development expenses | 669,668 | 3,171,665 |
Stock based compensation | 28,800 | 155,400 |
Total operating expenses | 1,393,616 | 4,138,750 |
Loss from operations | (1,393,616) | (4,138,750) |
Other income (expense) | ||
Interest income | 93 | 180 |
Interest expense | (155,930) | (103,460) |
Investment loss | (549) | |
Loss on investment in equity securities | (2,549,451) | |
Total other expenses | (2,705,837) | (103,280) |
Loss before provision income tax | (4,099,453) | (4,242,030) |
Provision for income tax | 1,850 | 830 |
Net loss | $ (4,101,303) | $ (4,242,860) |
Net loss per share: | ||
Basic and diluted | $ (0.02) | $ (0.02) |
Weighted average number of common shares outstanding: | ||
Basic and diluted | 213,884,105 | 213,321,921 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) | Common Stock | Additional paid-in capital | Accumulated deficit | Total |
Balance at Dec. 31, 2016 | $ 210,822 | $ 4,803,461 | $ 11,533,738 | $ (6,519,455) |
Balance, Shares at Dec. 31, 2016 | 210,821,647 | |||
Issuance of common shares | $ 2,925 | 5,847,075 | 5,850,000 | |
Issuance of common shares, Shares | 2,925,000 | |||
Stock based compensation | 85,400 | 85,400 | ||
Capital contribution from related parties under common control | 3,070,000 | 3,070,000 | ||
Net loss for the period | (4,242,860) | (4,242,860) | ||
Balance at Dec. 31, 2017 | $ 213,747 | 13,805,936 | (15,776,598) | (1,756,915) |
Balance, Shares at Dec. 31, 2017 | 213,746,647 | |||
Issuance of common shares | $ 180 | 79,820 | 80,000 | |
Issuance of common shares, Shares | 179,828 | |||
Stock based compensation | 28,800 | 28,800 | ||
Net loss for the period | (4,101,303) | (4,101,303) | ||
Balance at Dec. 31, 2018 | $ 213,927 | $ 13,914,556 | $ (19,877,901) | $ (5,749,418) |
Balance, Shares at Dec. 31, 2018 | 213,926,475 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities | ||
Net loss from continuing operations | $ (4,101,303) | $ (4,242,860) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock based compensation for nonemployees | 28,800 | 155,400 |
Investment loss | 549 | |
Loss on investment in equity securities | 2,549,451 | |
Changes in operating assets and liabilities: | ||
Decrease (increase) in prepaid expenses and deposits | (136) | |
Decrease (increase) in due from related parties | (40,000) | |
Increase (decrease) in accrued expenses and other current liabilities | 491,989 | 132,827 |
Increase (decrease) in due to related parties | 440,455 | 2,469,320 |
Net cash used in operating activities | (630,195) | (1,485,313) |
Cash flows from financing activities | ||
Capital contribution from related parties under common control | 450,000 | |
Proceeds from convertible notes | 800,000 | |
Borrowings from related parties | 50,000 | 1,110,000 |
Repayment of borrowings from related parties | (257,000) | |
Net cash provided by financing activities | 593,000 | 1,560,000 |
Effect of exchange rate changes on cash and cash equivalents | ||
Net increase (decrease) in cash and cash equivalents | (37,195) | 74,687 |
Cash and cash equivalents | ||
Beginning | 93,332 | 18,645 |
Ending | 40,044 | 93,332 |
Cash paid during the year for: | ||
Interest expense paid | 127,056 | 86,000 |
Income taxes paid | 1,850 | 830 |
Non-cash financing and investing activities | ||
Common shares issued for employees and consultants | 80,000 | |
Common shares issued for due to related parties | 5,850,000 | |
Capital contribution from related parties under common control | $ 2,550,000 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | 1. ORGANIZATION AND DESCRIPTION OF BUSINESS American BriVision (Holding) Corporation (the “Company” or “Holding entity”), a Nevada corporation, through the Company’s operating entity, American BriVision Corporation (the “BriVision”), which was incorporated in July 2015 in the State of Delaware, engages in biotechnology and focuses on the development of new drugs and innovative medical devices to fulfill unmet medical needs. The business model of the Company is to integrate research achievements from world-famous institutions (such as Memorial Sloan Kettering Cancer Center (“MSKCC”) and MD Anderson Cancer Center), conduct clinical trials of translational medicine for Proof of Concept (“POC”), out-license to international pharmaceutical companies, and exploit global markets. BriVision had to predecessor operations prior to its formation on July 21, 2015. Reverse Merger On February 8, 2016, a Share Exchange Agreement (the “Share Exchange Agreement”) was entered into by and among American BriVision (Holding) Corporation, American BriVision Corporation (“BriVision”), and Euro-Asia Investment & Finance Corp. Limited, a company incorporated under the laws of Hong Kong Special Administrative Region of the People’s Republic of China (“Euro-Asia”), being the owners of record of 164,387,376 (52,336,000 pre-stock split) shares of Common Stock of the Company, and the owners of record of all of the issued share capital of BriVision (the “BriVision Stock”). Pursuant to the Share Exchange Agreement, upon surrender by the BriVision Shareholders and the cancellation by BriVision of the certificates evidencing the BriVision Stock as registered in the name of each BriVision Shareholder, and pursuant to the registration of the Company in the register of members maintained by BriVision as the new holder of the BriVision Stock and the issuance of the certificates evidencing the aforementioned registration of the BriVision Stock in the name of the Company, the Company should issue 166,273,921(52,936,583 pre-stock split) shares (the “Acquisition Stock”) (subject to adjustment for fractionalized shares as set forth below) of the Company’s Common Stock to the BriVision Shareholders (or their designees), and 163,159,952 (51,945,225 pre-stock split) shares of the Company’s Common Stock owned by Euro-Asia should be cancelled and retired to treasury. The Acquisition Stock collectively should represent 79.70% of the issued and outstanding Common Stock of the Company immediately after the Closing, in exchange for the BriVision Stock, representing 100% of the issued share capital of BriVision in a reverse merger (the “Merger”). Pursuant to the Merger, all of the issued and outstanding common shares of BriVision were converted, at an exchange ratio of 0.2536-for-1, into an aggregate of 166,273,921(52,936,583pre-stock split) common shares of the Company and BriVision has become a wholly owned subsidiary of the Company. The holders of Company’s Common Stock as of immediately prior to the Merger held an aggregate of 205,519,223(65,431,144 pre-stock split) shares of Company’s Common Stock. Because of the exchange of the BriVision Stock for the Acquisition Stock (the “Share Exchange”), BriVision has become a wholly owned subsidiary (the “Subsidiary”) of the Company and there was a change of control of the Company following the closing. There were no warrants, options or other equity instruments issued in connection with the share exchange agreement. Because of the consummation of the Share Exchange, BriVision is now our wholly owned subsidiary and its shareholders own approximately 79.70% of our issued and outstanding Common Stock. Following the Share Exchange, we have abandoned our prior business plan and we are now pursuing BriVision’s historically proposed businesses, which focus on the development of new drugs and innovative medical devices to fulfill unmet medical needs. The business model of the Company is to integrate research achievements from world-famous institutions, conduct clinical trials of translational medicine for Proof of Concept (“POC”), out-license to international pharmaceutical companies, and exploit global markets. Accounting Treatment of the Reverse Merger For financial reporting purposes, the Share Exchange represents a “reverse merger” rather than a business combination and BriVision is deemed the accounting acquirer in the transaction. The Share Exchange is being accounted for as a reverse-merger and recapitalization. BriVision is the acquirer for financial reporting purposes and the Company is the acquired company. Consequently, the assets and liabilities and the operations reflected in the historical financial statements prior to the Share Exchange will be those of BriVision and recorded at the historical cost basis of BriVision. In addition, the consolidated financial statements after completion of the Share Exchange will include the assets and liabilities of the Company and BriVision, and the historical operations of BriVision and operations of the Combined Company from the closing date of the Share Exchange. Merger As disclosed in a registration statement on Form S-4 filed with the Securities and Exchange Commission (the “SEC”) on July 23, 2018, as amended from time to time, the Company, BioLite Holding, Inc. (“BioLite”), BioKey, Inc. (“BioKey”), BioLite Acquisition Corp., a direct wholly-owned subsidiary of Parent (“Merger Sub 1”), and BioKey Acquisition Corp., a direct wholly-owned subsidiary of Parent (“Merger Sub 2”) ( collectively referred to as the “Parties”) On February 8, 2019, the Parties of the Merger Agreement consummated the Merger transactions. Pursuant to the terms of the Merger Agreement, BioLite and BioKey became two wholly-owned subsidiaries of the Company on February 8, 2019. As of the date of this report, the Company is in the process of issuing shares of its Common Stock as Merger Consideration to the shareholders of BioLite and BioKey pursuant to the registration statement (the “Registration Statement on S-4”) on Form S-4 Amendment No. 3 filed with the SEC on January 16, 2019 which became effective by operation of law on or about February 5, 2019. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with the generally accepted accounting principles in the United States of America (the “U.S. GAAP”). All significant intercompany transactions and account balances have been eliminated. This basis of accounting involves the application 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. dollars. Fiscal Year 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 such year. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the amount of revenues and expenses during the reporting periods. Actual results could differ materially from those results. Reclassifications Certain classifications have been made to the prior year financial statements to conform to the current year presentation. The reclassification had no impact on previously reported net loss or accumulated deficit. Forward Stock split On March 21, 2016, the Board of Directors of the Company approved an amendment to Articles of Incorporation to effect a forward split at a ratio of 1 to 3.141 and increase the number of our authorized shares of Common Stock, par value $0.001 per share, to 360,000,000, which was effective on April 8, 2016. The majority of the shareholders of the Company approved the amendment to Articles of Incorporation. Fair Value Measurements The Company applies the provisions of ASC Subtopic 820-10, “Fair Value Measurements”, for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements. ASC 820 also establishes a framework for measuring fair value and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: - Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. - Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. - Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. The carrying values of certain assets and liabilities of the Company, such as cash and cash equivalents, due from related parties, accrued expenses, and due to related parties approximate fair value due to their relatively short maturities. The carrying value of the Company’s convertible notes payable and accrued interest approximates their fair value as the terms of the borrowing are consistent with current market rates. Cash and Cash Equivalents The Company considers highly liquid investments with maturities of three months or less, when purchased, to be cash equivalents. As of December 31, 2018 and 2017, the Company’s cash and cash equivalents amounted $40,044 and $93,332, 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 Restricted cash equivalents primarily consist of cash held in a reserve bank account in Taiwan. Concentration of Credit Risk The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments in high quality credit institutions, but these investments may be in excess of Taiwan Central Deposit Insurance Corporation and the U.S. Federal Deposit Insurance Corporation’s insurance limits. The Company does not enter into financial instruments for hedging, trading or speculative purposes. Revenue Recognition The Company has yet to realize revenues from operations. During the fiscal year 2018, the Company adopted Accounting Standards Codification (“ASC”), Topic 606 (ASC 606), Revenue from Contracts with Customers, using the modified retrospective method to all contracts that were not completed as of January 1, 2018, and applying the new revenue standard as an adjustment to the opening balance of accumulated deficit at the beginning of 2018 for the cumulative effect. The results for the Company’s reporting periods beginning on and after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior period. Based on the Company’s review of existing collaborative agreements as of January 1, 2018, the Company concluded that the adoption of the new guidance did not have a significant change on the Company’s revenue during all periods presented. Pursuant to ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the Company expects 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: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance 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 following are examples of when the Company recognizes revenue based on the types of payments the Company receives. Collaborative Revenues — 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 activities. 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) Nonrefundable upfront payments If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in an arrangement, the Company recognizes revenue from the related nonrefundable upfront payments based on the relative standalone selling price prescribed to the license compared to the total selling price of the arrangement. The revenue is recognized when the license is transferred to the collaboration partners and the collaboration partners are able to use and benefit from the license. To date, the receipt of nonrefundable upfront fees was solely for the compensation of past research efforts and contributions made by the Company before the collaborative agreements entered into and it does not relate to any future obligations and commitments made between the Company and the collaboration partners in the collaborative agreements. (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 nonrefundable, (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 accounting. 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. The Company 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 resolved. Receivable from Collaboration Partners Receivable from collaboration partners is stated at carrying value less estimates made for doubtful receivables. An allowance for impairment of receivable from collaboration partners is established if the collection of a receivable becomes doubtful. Such receivable becomes doubtful when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter into bankruptcy or financial reorganization, and default or delinquency in payments are considered indicators that the receivable is impaired. The amount of the allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Long-term Equity Investment The Company acquires the equity investments to promote business and strategic objectives. The Company accounts for non-marketable equity and other equity investments for which the Company does not have control over the investees as: ● Equity method investments when the Company has the ability to exercise significant influence, but not control, over the investee. Its proportionate share of the income or loss is recognized monthly and is recorded in gains (losses) on equity investments. ● Non-marketable cost method investments when the equity method does not apply. Significant judgment is required to identify whether an impairment exists in the valuation of the Company’s non-marketable equity investments, and therefore the Company considers this a critical accounting estimate. Its yearly analysis considers both qualitative and quantitative factors that may have a significant impact on the investee’s fair value. Qualitative analysis of its investments involves understanding the financial performance and near-term prospects of the investee, changes in general market conditions in the investee’s industry or geographic area, and the management and governance structure of the investee. Quantitative assessments of the fair value of its investments are developed using the market and income approaches. The market approach includes the use of comparable financial metrics of private and public companies and recent financing rounds. The income approach includes the use of a discounted cash flow model, which requires significant estimates regarding the investees’ revenue, costs, and discount rates. The Company’s assessment of these factors in determining whether an impairment exists could change in the future due to new developments or changes in applied assumptions. Other-Than-Temporary Impairment The Company’s long-term equity investments are subject to a periodic impairment review. Impairments affect earnings as follows: ● Marketable equity securities include the consideration of general market conditions, the duration and extent to which the fair value is below cost, and our ability and intent to hold the investment for a sufficient period of time to allow for recovery of value in the foreseeable future. The Company also considers specific adverse conditions related to the financial health of, and the business outlook for, the investee, which may include industry and sector performance, changes in technology, operational and financing cash flow factors, and changes in the investee’s credit rating. The Company records other-than-temporary impairments on marketable equity securities and marketable equity method investments in gains (losses) on equity investments. ● 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; 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 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 $2,549,451 and $0 for the years ended December 31, 2018 and 2017, respectively. Research and Development Expenses The Company accounts for the cost of using licensing rights in research and development cost according to ASC Topic 730-10-25-1. This guidance provides that 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 when incurred. 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 years ended December 31, 2018 and 2017. The Company accounted for stock-based compensation to non-employees in accordance with FASB ASC Topic 718 “Compensation-Stock Compensation” and FASB ASC Topic 505-50 “Equity-Based Payments to Non-Employees” which requires that the cost of services received from non-employees is measured at fair value at the earlier of the performance commitment date or the date service is completed and recognized over the period the service is provided. Total non-employee stock-based compensation expenses were $28,800 and $155,400 for the years ended December 31, 2018 and 2017, respectively. Beneficial Conversion Feature From time to time, the Company may issue convertible notes that may contain an imbedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method. Income Taxes The Company accounts for income taxes using the asset and liability approach which allows the recognition and measurement of deferred tax assets to be based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will expire before the Company is able to realize their benefits, or future deductibility is uncertain. Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The evaluation of a tax position is a two-step process. The first step is to determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigations based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefits recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer satisfied. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the year incurred. No significant penalty or interest relating to income taxes has been incurred for the years ended December 31, 2018 and 2017. 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 Bulletin (“SAB 118”), which provides guidance on accounting for tax effects of the Tax Act. SAB 118 provides a measurement 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. If a 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 we may take. The Company is continuing to gather additional information to determine the final impact. For the years ended December 31, 2018 and 2017, the Company’s income tax expense amounted $1,850 and $830, respectively. 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. Diluted earnings per share excludes all dilutive potential shares if their effect is anti-dilutive. Commitments and Contingencies The Company has adopted ASC Topic 450 “Contingencies” 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 assets 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. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-02, Leases (ASC 842), which was amended by ASU 2018-11, Leases (ASC 842): Targeted Improvements. The new guidance requires lessee recognition on the balance sheet of a right-of-use (ROU) asset and a lease liability, initially measured at the present value of the lease payments. It further requires recognition in the income statement of a single lease cost, calculated so that the cost of the lease is allocated over the lease term generally on a straight-line basis. Finally, it requires classification of all cash payments within operating activities in the statement of cash flows. The standard is effective for public companies for fiscal years beginning after December 15, 2018 and early adoption is permitted. The standard requires a transition adoption election using either 1) a modified retrospective approach with periods prior to the adoption date being recast or 2) a prospective adoption approach with a cumulative-effect adjustment recognized to the opening balance of retained earnings on the adoption date with prior periods not recast. The Company anticipates adopting this standard with an effective date of January 1, 2019 using the prospective adoption approach. The Company has evaluated the changes from this standard to its future financial reporting and disclosures, and has designed and implemented related processes and controls to address these changes. The Company believes the most significant effects relate to (1) the recognition of new ROU assets and lease liabilities on its balance sheet for its office operating lease; and (2) providing significant new disclosures about its leasing activities related to the amount, timing and uncertainty of cash flows arising from leases. The Company is continuing its assessment, which may identify additional impacts this guidance will have on its financial statements and disclosures. On December 22, 2017, the SEC issued Staff Accounting Bulletin (“SAB 118”), which provides guidance on accounting for tax effects of the Tax Act. SAB 118 provides a measurement 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. In March 2018, the FASB issued ASU 2018-05, Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (SEC Update), Income Taxes (Topic 740). ASU 2018-05 provides guidance regarding the recording of tax impacts where uncertainty exists, in the period of adoption of the 2017 U.S. Tax Cuts and Jobs Act (the “2017 Tax Act”). In February 2018, the FASB issued Accounting Standards Update No. 2018-02 (“ASU 2018-02”), Income Statement - Reporting Comprehensive Income (Topic 220). The guidance in ASU 2018-02 allows an entity to elect to reclassify the stranded tax effects related to the Tax Cuts and Jobs Act (the Tax Act) of 2017 from accumulated other comprehensive income into retained earnings. ASU 2018-02 is effective |
Going Concern
Going Concern | 12 Months Ended |
Dec. 31, 2018 | |
Going Concern [Abstract] | |
GOING CONCERN | 3. GOING CONCERN The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred losses since its inception resulting in an accumulated deficit of $19,877,901 and $15,776,598 as of December 31, 2018 and 2017, respectively, and incurred net loss of $4,101,303 and $4,242,860 for the years ended December 31, 2018 and 2017, respectively. The Company also had working capital deficiency of $5,471,951 and $1,756,915 at December 31, 2018 and 2017, respectively. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company upon signing of that agreement. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plans to obtain such resources for the Company include (1) obtaining capital from the sale of its equity securities (2) short-term and long-term borrowings from banks and third-parties, and (3) short-term borrowings from stockholders or other related party(ies) when needed. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually to secure other sources of financing and attain profitable operations. |
Collaborative Agreements
Collaborative Agreements | 12 Months Ended |
Dec. 31, 2018 | |
Collaborative Agreements [Abstract] | |
COLLABORATIVE AGREEMENTS | 4. COLLABORATIVE AGREEMENTS Collaborative agreement with BioLite Inc., a related party On December 29, 2015, American BriVision Corporation entered into a collaborative agreement (the “BioLite Collaborative Agreement”) with BioLite Inc. (the “BioLite”), a related party (See Note 8), pursuant to which BioLite granted BriVision sole licensing rights for drug and therapeutic use of five products, including BLI-1005 CNS-Major Depressive Disorder, BLI-1008 CNS-Attention Deficit Hyperactivity Disorder, BLI-1401-1 Anti-Tumor Combination Therapy-Solid Tumor with Anti-PD-1, BLI-1401-2 Anti-Tumor Combination Therapy-Triple Negative Breast Cancer, and BLI-1501 Hematology-Chronic Lymphocytic Leukemia, in the U.S.A and Canada. Under the BioLite Collaborative Agreement, BriVision should pay a total of $100,000,000 in cash or stock of BriVision with equivalent value, according to the following schedule: ● upfront payment shall upon the signing of this BioLite Collaborative Agreement: 3.5% of total payment. After receiving upfront payment from BriVision, BioLite has to deliver all data to BriVision in one week. ● upon the first IND submission, BriVision shall pay, but no later than December 15, 2016: 6.5% of total payment. After receiving second payment from BriVision, BioLite has to deliver IND package to BriVision in one week. ● at the completion of first phase II clinical trial, BriVision shall pay, but no later than September 15, 2017: 15% of total payment. After receiving third payment from BriVision, BioLite has to deliver phase II clinical study report to BriVision in three months. ● upon the phase III IND submission, BriVision shall pay, but no later than December 15, 2018: 20% of total payment. After receiving forth payment from BriVision, BioLite has to deliver IND package to BriVision in one week. ● at the completion of phase III, BriVision shall pay, but no later than September 15, 2019:25% of total payment. After receiving fifth payment from BriVision, BioLite has to deliver phase III clinical study report to BriVision in three months. ● upon the NDA submission, BriVision shall pay, but no later than December 15, 2020, BriVision shall pay: 30% of total payment. After receiving sixth payment from BriVision, BioLite has to deliver NDA package to BriVision in one week. This BioLite Collaborative Agreement shall, once signed by both Parties, remain in effect for fifteen years as of the first commercial sales of the Product in the Territory and automatically renew for five more years unless either party gives the other party six month written notice of termination prior to the expiration date of the term. Pursuant to the BioLite Collaborative Agreement, an upfront payment of $3,500,000 (the “Milestone Payment”), which is 3.5% of total payments due under the BioLite Collaborative Agreement, was to be paid by the Company upon signing of that agreement. On May 6, 2016, the Company and BioLite agreed to amend the BioLite Collaborative Agreement, through entry into the Milestone Payment Agreement, whereby the Company agreed to pay the Milestone Payment to BioLite with $2,600,000 in cash and $900,000 in the form of newly issued shares of its Common Stock, at the price of $1.60 per share, for an aggregate number of 562,500 shares. The cash payment and shares issuance were completed in June 2016. Pursuant to the BioLite Collaborative Agreement, the 6.5% of total payment, $6,500,000 shall be made upon the first IND submission which was submitted in March 2016. On February 2017, the Company agreed to pay this amount to BioLite with $650,000 in cash and $5,850,000 in the form of newly issued shares of its Common Stock, at the price of $2.0 per share, for an aggregate number of 2,925,000 shares. The cash payment and shares issuance were completed in February 2017. Pursuant to the BioLite Collaborative Agreement, the 15% of total payment, $15,000,000 shall be made at the completion of first phase II clinical trial. As of December 31, 2018, the first phase II clinical trial research has not completed yet. The Company determined to fully expense the entire amount of $10,000,000 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 immediately. Hence the entire amount is fully expensed as research and development expense. On January 12, 2017, the Company entered into an Addendum (the “Addendum”) to the BioLite Collaborative Agreement which was previously entered into with BioLite. Pursuant to the Addendum, the Company and BioLite agreed to include one more product, namely, “Maitake Combination Therapy” as one of the Products defined in the BioLite Collaborative Agreement (the “Sixth Product’) and defined the Territory of the Sixth Product to be worldwide and restate the Territory of the Five Products to be the U.S.A and Canada. Co-Development agreement with Rgene Corporation, a related party On May 26, 2017, American BriVision Corporation 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 8). Pursuant to Co-Dev Agreement, BriVision and Rgene agreed to co-develop and commercialize certain products that are included in the Sixth Product as defined in the Addendum. Under the terms of the Co-Dev Agreement, Rgene should 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. Besides of $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 cost 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 September 30, 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 has 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. However, all projects that have been initiated and scheduled will be continuously managed and supported by the Company and Rgene (See Note 5). Collaborative agreement with BioFirst Corporation, a related party On July 24, 2017, American BriVision Corporation 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 8). 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 BioFirst. On September 25, 2017, BioFirst has delivered all research, technical, data and development data to BriVision. No payment has been made by the Company as of the date of this report. 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 immediately. Hence, the entire amount of $3,000,000 is fully expensed as research and development expense during the year ended September 30, 2017. |
Long-Term Investment
Long-Term Investment | 12 Months Ended |
Dec. 31, 2018 | |
Long-Term Investment [Abstract] | |
LONG-TERM INVESTMENT | 5. LONG-TERM INVESTMENT 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(See Note 4). As of December 31, 2018, the Company owns 23.90% common stock shares of Rgene, accounting for its equity interest using the equity method to its equity investment as prescribed in ASC 323, Investments—Equity Method and Joint Ventures (“ASC 323”). Equity method adjustments include the Company’s proportionate share of investee’s income or loss and other adjustments required by the equity method. (1) The ownership percentages of the investee are listed as follows: Ownership percentage December 31, December 31, Accounting Name of related party 2018 2017 treatment Rgene Corporation 23.90 % N/A Equity Method (2) The extent the investee relies on the company for its business are summarized as follows: Name of related party The extent the investee relies on the Company for its business Rgene Corporation Collaborating with the Company to develop and commercialize drugs (3) Long-term investment mainly consists of the following: December 31, December 31, 2018 2017 Equity Method Investments, net of impairment Rgene Corporation $ - N/A Total $ - N/A (4) Summarized financial information for the Company’s equity method investee, Rgene, is as follows: Balance Sheets December 31, December 31, Current Assets $ 98,168 N/A Noncurrent Assets 14,779 N/A Current Liabilities 261,685 N/A Shareholders’ Deficit (148,738 ) N/A Statements of operation For the Years Ended December 31, 2018 2017 Net sales $ - N/A Gross Profit - N/A Net loss (120,065 ) N/A Share of loss from investments accounted for using the equity method (549 ) N/A (5) Losses on Equity Investments The components of losses on equity investments for each period were as follows: For the Years Ended 2018 2017 Share of equity method investee losses $ (549 ) N/A Impairments (2,549,451 ) N/A Total losses on equity investments $ (2,550,000 ) N/A |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | 6. ACCRUED EXPENSES Accrued expenses as of December 31, 2018 and 2017 consisted of: December 31, December 31, Accrued payroll $ 444,400 $ 110,800 Accrued rent 4,941 Accrued interest expense – related party (Note 7) 18,868 17,460 Accrued expenses 87,240 42,667 Total $ 555,449 $ 170,927 |
Convertible Notes Payable
Convertible Notes Payable | 12 Months Ended |
Dec. 31, 2018 | |
Convertible Notes Payable [Abstract] | |
CONVERTIBLE NOTES PAYABLE | 7. CONVERTIBLE NOTES PAYABLE On May 9, 2018, the Company issued an eighteen-month term unsecured convertible promissory note (the "Yu and Wei Note") in an aggregate principal amount of $300,000 to Guoliang Yu and Yingfei Wei Family Trust (the "Yu and Wei"), pursuant to which the Company received $300,000. The Yu and Wei Note bears interest at 8% per annum. The Company shall pay to the Yu and Wei an amount in cash representing all outstanding principal and accrued and unpaid interest on the Eighteenth (18) month anniversary of the issuance date of the Yu and Wei Note, which is on November 8, 2019. In the event that the Company raises gross proceeds from the sale of its common stock of at least $5,000,000 (an "Equity Offering") then within five days of the closing for such offering, the Company must repay the outstanding amount of this Yu and Wei Note. At any time from the date hereof until this Yu and Wei Note has been satisfied, the Yu and Wei may convert the unpaid and outstanding principal plus any accrued and unpaid interest and or default interest, if any, into shares of the Company's common stock at a conversion price (the "Conversion Price") equal to the lower of (i) $2.00 per share (the "Fixed Conversion Price"), subject to adjustment or (ii) 80% of the per share offering price (the "Alternative Conversion Price") of any completed equity offering of the Company in an amount exceeding $500,000 that occurs when any part of the Yu and Wei Note is outstanding, subject to adjustments set forth in the Yu and Wei Note. In accordance with FASB ASC 470-20, the Company recognized none of the intrinsic value of embedded beneficial conversion feature present in the Yu and Wei Note as of December 31, 2018. On June 27, 2018, the Company issued an eighteen-month term unsecured convertible promissory note (the "Keypoint Note") in the aggregate principal amount of $250,000 to Keypoint Technology Ltd. ("Keypoint"), a related party, pursuant to which the Company received $250,000. The Keypoint Note bears interest at 8% per annum. The Company shall pay to the Keypoint an amount in cash representing all outstanding principal and accrued and unpaid interest on the Eighteenth (18) month anniversary of the issuance date of the Keypoint Note, which is on December 26, 2019. In the event that the Company raises gross proceeds from the sale of its common stock of at least $5,000,000 (an "Equity Offering") then within five days of the closing for such offering, the Company must repay the outstanding amount of this Keypoint Note. At any time from the date hereof until this Keypoint Note has been satisfied, Keypoint may convert the unpaid and outstanding principal plus any accrued and unpaid interest and or default interest, if any, into shares of the Company's common stock at a conversion price (the "Conversion Price") equal to the lower of (i) $2.00 per share (the "Fixed Conversion Price"), subject to adjustment or (ii) 80% of the per share offering price (the "Alternative Conversion Price") of any completed equity offering of the Company in an amount exceeding $500,000 that occurs when any part of the Keypoint Note is outstanding, subject to adjustments set forth in the Keypoint Note. In accordance with FASB ASC 470-20, the Company recognized none of the intrinsic value of embedded beneficial conversion feature present in the Keypoint Note as of December 31, 2018. On August 25, 2018, the Company issued an eighteen-month term unsecured convertible promissory note (the "Odaira Note") in the aggregate principal amount of $250,000 to the Company's director, Yoshinobu Odaira. ("Odaira), pursuant to which the Company received $250,000 on November 29, 2018. The Odaira Note bears interest at 8% per annum. The Company shall pay to the Odaira an amount in cash representing all outstanding principal and accrued and unpaid interest on the Eighteenth (18) month anniversary of the issuance date of the Odaira Note, which is on February 24, 2020. In the event that the Company raises gross proceeds from the sale of its common stock of at least $5,000,000 (an "Equity Offering") then within five days of the closing for such offering, the Company must repay the outstanding amount of this Odaira Note. At any time from the date hereof until this Odaira Note has been satisfied, Odaira may convert the unpaid and outstanding principal plus any accrued and unpaid interest and or default interest, if any, into shares of the Company's common stock at a conversion price (the "Conversion Price") equal to the lower of (i) $2.00 per share (the "Fixed Conversion Price"), subject to adjustment or (ii) 80% of the per share offering price (the "Alternative Conversion Price") of any completed equity offering of the Company in an amount exceeding $500,000 that occurs when any part of the Odaira Note is outstanding, subject to adjustments set forth in the Odaira Note. In accordance with FASB ASC 470-20, the Company recognized none of the intrinsic value of embedded beneficial conversion feature present in the Odaira Note as of December 31, 2018. As of December 31, 2018, the aggregate carrying values of the convertible debentures and accrued convertible interest were $800,000 and $27,467, respectively. Interest expense was $27,467 and $0 for the years ended December 31, 2018 and 2017, respectively. |
Related Parties Transactions
Related Parties Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES TRANSACTIONS | 8. RELATED PARTIES TRANSACTIONS The related parties of the company with whom transactions are reported in these financial statements are as follows: Name of entity or Individual Relationship with the Company and its subsidiaries BioLite Inc. (the “BioLite”) Shareholder of the Company; entity controlled by controlling beneficiary shareholder of YuanGene BioFirst Corporation (the “BioFirst”) Entity controlled by controlling beneficiary shareholder of YuanGene BioFirst (Australia) Pty Ltd. (the BioFirst (Australia)”) 100% owned by BioFirst; Entity controlled by controlling beneficiary shareholder of YuanGene Rgene Corporation (the “Rgene”) Shareholder of the Company; entity controlled by controlling beneficiary shareholder of YuanGene LionGene Corporation (the “LionGene”) Shareholder of the Company; entity controlled by controlling beneficiary shareholder of YuanGene YuanGene Corporation (the “YuanGene”) Controlling beneficiary shareholder of the Company AsianGene Corporation (the “AsianGene”) Shareholder; entity controlled by controlling beneficiary shareholder of YuanGene Eugene Jiang Former President and Chairman Keypoint Technology Ltd. (the “Keypoint’) The Chairman of Keypoint is Eugene Jiang’s mother. Yoshinobu Odaira (the “Odaira”) Director of the Company Euro-Asia Investment & Finance Corp Ltd. (the “Euro-Asia”) Shareholder of the Company Kimho Consultants Co., Ltd. (the “Kimho”) Shareholder of the Company BioKey, Inc. (the “BioKey”) One of wholly-owned subsidiaries of ABVC upon closing of the Mergers on February 8, 2019 Other receivable - related parties Amount due from related parties consisted of the following as of the periods indicated: December 31, December 31, 2018 2017 BioFirst (Australia) $ 40,000 $ - Total $ 40,000 $ - Due to related parties Amount due to related parties consisted of the following as of the periods indicated: December 31, December 31, 2018 2017 BioLite Inc. $ 58,684 $ 109,220 BioFirst Corporation 4,151,301 3,957,000 AsianGene Corporation 160,000 160,000 YuanGene Corporation 92,690 3,000 Eugene Jiang 100 100 Total $ 4,462,775 $ 4,229,320 Related party transactions (1) During the years ended December 31, 2018 and 2017, BioLite has advanced funds to the Company for working capital purpose. The advances bear 0% interest rate and are due on demand. As of December 31,2018 and 2017, the outstanding advance balance was $58,684 and $109,2220, respectively. (2) On January 26, 2017, the Company and BioFirst entered into a loan agreement for a total commitment (non-secured indebtedness) of $950,000 to meet its working capital needs. Under the terms of the loan agreement, the loan bears interest at 1% per month (or equivalent to 12% per annum) and the Company is required to pay interest monthly to the lender. The loan will be matured on February 1, 2018. As of December 31, 2018 and 2017, the outstanding loan balance is $692,980 and $950,000, and accrued interest is $281 and $17,460, respectively. Interest expenses in connection with this loan were $104,331 and $103,460 for the years ended December 31, 2018 and 2017, respectively. (3) On July 24, 2017, BriVision entered into a collaborative agreement (the “BioFirst Collaborative Agreement”) with BioFirst (See Note 4). On September 25, 2017, BioFirst has delivered all research, technical, data and development data to BriVision, and the Company has recorded the full amount of $3,000,000 due to BioFirst. No payment has been made by the Company as of the date of this report. (4) During the years ended December 31, 2018 and 2017, BioFirst has also advanced funds to the Company for working capital purpose. The advances bear 0% interest rate and are due on demand. As of December 31,2018 and 2017, the outstanding advance balance was $458,321 and $7,000, respectively. (5) In September 2017, AsianGene entered an investment and equity transfer agreement (the “Investment and Equity Transfer Agreement”) with Everfront Biotech Inc. (the “Everfront”), a third party. Pursuant to the Investment and Equity Transfer Agreement, Everfront agreed to purchase 2,000,000 common shares of the Company owned by AsianGene at $1.60 per share in a total amount of $3,200,000, of which $160,000 is due before September 15, 2017 and the remaining amount of $3,040,000 is due before December 15, 2017. AsianGene also agreed to loan the proceeds to the Company for working capital purpose. The non-secured loan bears 0% interest rate and is due on demand. As of December 31, 2018 and 2017, the outstanding loan balance was $160,000 and accrued interest was $12,866 and $0, respectively. Interest expenses in connection with this loan were $18,411 and $0 for the years ended December 31, 2018 and 2017, respectively. (6) As of December 31, 2018 and 2017, YuanGene Corporation has advanced an aggregate amount of $42,690 and $3,000, respectively, to the Company for working capital purpose. The advances bear 0% interest rate and are due on demand. (7) On January 18, 2018, the Company and YuanGene entered into a loan agreement for a total of $50,000 to meet its working capital needs. Under the terms of the loan agreement, the loan bears interest at 1% per month (or equivalent to 12% per annum) and the Company is required to pay interest monthly to the lender. The maturity date of this loan is January 19, 2019. As of December 31, 2018 and December 31, 2017, the outstanding loan balance was $50,000 and $0, and accrued interest was $5,721 and $0, respectively. Interest expenses in connection with this loan were $5,721 and $0 for the years ended December 31, 2018 and 2017, respectively. (8) As of December 31, 2018 and December 31, 2017, the Chairman, Eugene Jiang, of the Company has advanced an aggregate amount of $100 to the Company for working capital purpose. The advances bear 0% interest rate and are due on demand. (9) On June 27, 2018, the Company issued an eighteen-month term unsecured convertible promissory note (the “Keypoint Note”) in the aggregate principal amount of $250,000 to Keypoint Technology Ltd. (“Keypoint”) (See Note 7). The Company received $250,000 which bears interest at 8% per annum. Interest expense in connection with this Keypoint Note was $10,222 and $0 for the years ended December 31, 2018 and 2017, respectively. (10) On August 25, 2018, the Company issued an eighteen-month term unsecured convertible promissory note (the “Odaira Note”) in the aggregate principal amount of $250,000 to Yoshinobu Odaira (“Odaira”) (See Note 7). The Company received $250,000 on November 29, 2018 which bears interest at 8% per annum. Interest expense in connection with this Odaira Note was $1,778 and $0 for the years ended December 31, 2018 and 2017, respectively. (11) On January 1, 2017, Kimho Consultants Co., Ltd. and the Company entered into a service agreement (the “Kimho Agreement”) for the maintenance of the listing in the U.S. stock exchange market. During the years ended December 31, 2018 and 2017, the Company recognized non-employee stock based compensation expenses of $0 and $90,000 in connection with the terms in the Kimho Agreement, respectively. (12) On January 1, 2017, Euro-Asia Investment & Finance Corp Ltd. and the Company entered into a service agreement (the “Euro-Asia Agreement”) for the maintenance of the listing in the U.S. stock exchange market. During the years ended December 31, 2018 and 2017, the Company recognized non-employee stock based compensation expenses of $0 and $60,000 in connection with the terms in the Euro-Asia Agreement, respectively. (13) During the year ended December 31, 2017, the Company provided a one-time consulting service to LionGene Corporation for $70,000. Since both LionGene and the Company are related parties and under common control by a controlling beneficiary shareholder of YuanGene Corporation, the Company has recorded the full amount of $70,000 as additional paid-in capital during the year ended September 30, 2017. (14) During the year ended September 30, 2017, the Company entered an operating lease agreement with AsianGene for an office space in Taiwan for the period from October 1, 2016 to July 31, 2017. The monthly base rent is approximately $5,000. Rent expenses under this lease agreement amounted to $0 and $52,205 for the years ended December 31, 2018 and 2017, respectively. (15) On October 2, 2018, the Company and BioKey entered into an operating lease agreement for an office space in Fremont, California. The lease can be terminated one month in advance provided with written notice. The monthly base rent is $800. Rent expenses under this lease agreement amounted to $2,400 and $0 for the years ended December 31, 2018 and 2017, respectively. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
EQUITY | 9. EQUITY During October 2015, $350,000 of subscription receivable was fully collected from the shareholders. On February 8, 2016, a Share Exchange Agreement ("Share Exchange Agreement") was entered into by and among American BriVision (Holding) Corporation (the "Company"), American BriVision Corporation ("BriVision"), Euro-Asia Investment & Finance Corp. Limited, a company incorporated under the laws of Hong Kong Special Administrative Region of People's Republic of China ("Euro-Asia"), being the owners of record of 164,387,376 (52,336,000 pre-stock split) shares of Common Stock of the Company, and the owners of record of all of the issued share capital of BriVision (the "BriVision Stock"). Pursuant to the Share Exchange Agreement, upon surrender by the BriVision Shareholders and the cancellation by BriVision of the certificates evidencing the BriVision Stock as registered in the name of each BriVision Shareholder, and pursuant to the registration of the Company in the register of members maintained by BriVision as the new holder of the BriVision Stock and the issuance of the certificates evidencing the aforementioned registration of the BriVision Stock in the name of the Company, the Company should issue 166,273,921(52,936,583 pre-stock split) shares (the "Acquisition Stock") (subject to adjustment for fractionalized shares as set forth below) of the Company's Common Stock to the BriVision Shareholders (or their designees), and 163,159,952 (51,945,225 pre-stock split) shares of the Company's Common Stock owned by Euro-Asia should be cancelled and retired to treasury. The Acquisition Stock collectively should represent 79.70% of the issued and outstanding Common Stock of the Company immediately after the Closing, in exchange for the BriVision Stock, representing 100% of the issued share capital of BriVision in a reverse merger, or the Merger. Pursuant to the Merger, all of the issued and outstanding shares of BriVision's Common Stock were converted, at an exchange ratio of 0.2536-for-1, into an aggregate of 166,273,921(52,936,583 pre-stock split) shares of Company's Common Stock and BriVision became a wholly owned subsidiary, of the Company. The holders of Company's Common Stock as of immediately prior to the Merger held an aggregate of 205,519,223 (65,431,144 pre-stock split) shares of Company's Common Stock, Because of the exchange of the BriVision Stock for the Acquisition Stock (the "Share Exchange"), BriVision became a wholly owned subsidiary (the "Subsidiary") of the Company and there was a change of control of the Company following the closing. There were no warrants, options or other equity instruments issued in connection with the share exchange agreement. On February 17, 2016, pursuant to the 2016 Equity Incentive Plan (the "2016 Plan"), 157,050 (50,000 pre-stock split) shares were granted to the employees. On March 21, 2016, the Board of Directors of the Company approved an amendment to Articles of Incorporation to effect a forward split at a ratio of 1 to 3:141 (the "Forward Stock Split") and increase the number of our authorized shares of Common Stock, par value $0.001 per share, to 360,000,000, which was effective on April 8, 2016. The majority of the shareholders of the Company approved the amendment to Articles of Incorporation. On May 6, 2016, the Company and BioLite agreed to amend the BioLite Collaborative Agreement, through entry into the Milestone Payment Agreement, whereby the Company has agreed to issue shares of our Common Stock, at the price of $1.60 per share, for an aggregate number of 562,500 shares, as part of our first installation of payment pursuant to the Milestone Payment. The shares issuance was completed in June 2016. On August 26, 2016, the Company issued 1,468,750 shares ("Shares") of the Company's Common Stock, par value $0.001 (the "Offering") to BioLite, Inc., a non-U.S. accredited investor (the "Purchaser") pursuant to a certain Stock Purchase Agreement dated August 26, 2016 (the "SPA"). The Shares are exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), pursuant to Regulation S of the Securities Act promulgated thereunder. The purchase price per share of the Offering is $1.60. The net proceeds to the Company from the Offering are approximately $2,350,000. The proceeds may be used for general corporate purposes. Pursuant to the BioLite Collaborative Agreement (See Note 4), BriVision should pay a total of $100,000,000 in cash or stock of the Company with equivalent value according to the milestone achieved. The agreement requires that 6.5% of total payment, $6,500,000 shall be made upon the first IND submission which was submitted in March 2016. In February 2017, the Company remitted this amount to BioLite with $650,000 in cash and $5,850,000 in the form of newly issued shares of our Common Stock, at the price of $2.0 per share, for an aggregate number of 2,925,000 shares. On October 1, 2016, the Company entered into a consulting agreement with Kazunori Kameyama ("Kameyama") for the provision of services related to the clinical trials and other administrative work, public relation work, capital raising, trip coordination, In consideration for providing such services, the Company agreed to indemnify the consultant in an amount of $150 per hour in cash up to $3,000 per month, and issue to Kameyama the Company's Common Stock at $1.00 per share for any amount exceeding $3,000. The Company's stocks shall be calculated and issued in December every year. On October 1, 2017, the Company and Kameyama agreed to extend the service period for one more year expiring on September 30, 2018. As a result, the non-employee stock-based compensation related to this consulting agreement was $28,800 and $5,400 for the years ended December 31, 2018 and 2017, respectively. On March 28, 2018, the Company issued 4,828 shares of the Company's common stock at $1.60 per share in a total of $7,725 to Kameyama in connection with this consulting agreement. On January 1, 2017, Euro-Asia Investment & Finance Corp Ltd. and the Company entered into a service agreement (the "Euro-Asia Agreement") for the maintenance of the listing in the U.S. stock exchange market. During the years ended December 31, 2018 and 2017, the Company recognized non-employee stock based compensation expenses of $0 and $60,000 in connection with the terms in the Euro-Asia Agreement, respectively. On March 28, 2018, the Company issued 50,000 shares of the Company's common stock at $1.60 per share in a total of $80,000 to Euro-Asia in connection with the Euro-Asia Agreement. On January 1, 2017, Kimho Consultants Co., Ltd. and the Company entered into a service agreement (the "Kimho Agreement") for the maintenance of the listing in the U.S. stock exchange market. During the years ended December 31, 2018 and 2017, the Company recognized non-employee stock based compensation expenses of $0 and $90,000 in connection with the terms in the Kimho Agreement, respectively. On March 28, 2018, the Company issued 75,000 shares of the Company's common stock at $1.60 per share in a total of $120,000 to Kimho in connection with the Kimho Agreement. Pursuant to ASC 505-50-30, the transactions with the non-employees were measured based on the fair value of the equity instruments issued as the Company determined that the fair value of the equity instruments issued in a stock-based payment transaction with nonemployees was more reliably measurable than the fair value of the consideration received. The Company measured the fair value of the equity instruments in these transactions using the stock price on the date at which the commitments Kameyama, Euro-Asia, and Kimho for performance were rendered. On March 28, 2018, the Company also issued an aggregate of 50,000 shares of the Company's common stock at $1.60 per share for salaries in a total of $80,000 to three officers. |
Income Tax
Income Tax | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | 10. INCOME TAX The Company files income tax returns in the U.S. federal jurisdiction, and various state and local jurisdictions. The Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years before 2013. On December 22, 2017 H.R. 1, originally known as the Tax Cuts and Jobs Act, (the "Tax Act") was enacted. Among the significant changes to the U.S. Internal Revenue Code, the Tax Act lowers the U.S. federal corporate income tax rate ("Federal Tax Rate") from 35% to 21% effective January 1, 2018. The 21% Federal Tax Rate will apply to earnings reported for the full 2018 fiscal year. In addition, the Company must re-measure its net deferred tax assets and liabilities using the Federal Tax Rate that will apply when these amounts are expected to reverse. As of December 31, 2017, the Company can determine a reasonable estimate for certain effects of tax reform and recorded that estimate as a provisional amount. The provisional remeasurement of the deferred tax assets and allowance valuation of deferred tax assets at December 31, 2017 resulted in a net effect of $0 discrete tax expenses (benefit) which lowered the effective tax rate by 14% for the year ended December 31, 2017. The provisional remeasurement amount is anticipated to change as data becomes available allowing more accurate scheduling of the deferred tax assets and liabilities primarily related to net operating loss carryover. Components of income tax (benefits) for the twelve months ended December 31, 2018 and 2017 are as follows: Year ended Year ended Federal State Total Federal State Total Current $ - $ 1,850 $ 1,850 $ - $ 830 $ 830 Deferred - - - - - - $ - $ 1,850 $ 1,850 $ - $ 830 $ 830 Significant components of the Company's deferred tax accounts at December 31, 2018 and September 30, 2017: Deferred Tax Account - noncurrent: December 31, December 31, Tax losses carryforwards $ 913,954 $ 594,501 Less: Valuation allowance (913,954 ) (594,501 ) Total deferred tax account - noncurrent $ - $ - The difference between the effective rate reflected in the provision for income taxes on loss before taxes and the amounts determined by applying the applicable statutory U.S. tax rate are analyzed below: Years ended 2018 2017 Statutory federal tax benefit, net of state tax effects 19 % 31 % State income taxes 8.84 % 8.84 % Provisional remeasurement of deferred taxes - % (13 )% Nondeductible/nontaxable items (1 )% (4 )% Change in valuation allowance (26.84 )% (22.84 )% Effective income tax rate 0 % 0 % |
Loss per Share
Loss per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
LOSS PER SHARE | 11. LOSS PER SHARE Basic loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the year. Diluted loss per share is computed by dividing net loss by the weighted-average number of common shares and dilutive potential common shares outstanding during the years ended December 31, 2018 and 2017. Years Ended December 31, 2018 2017 Numerator: Net loss $ (4,101,303 ) $ (4,242,860 ) Denominator: Weighted-average shares outstanding: Weighted-average shares outstanding - Basic 213,884,105 213,321,921 Stock options - - Weighted-average shares outstanding - Diluted 213,884,105 213,321,921 Loss per share -Basic $ (0.02 ) $ (0.02 ) -Diluted $ (0.02 ) $ (0.02 ) Diluted loss per share takes into account the potential dilution that could occur if securities or other contracts to issue Common Stock were exercised and converted into Common Stock. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 12. COMMITMENTS AND CONTINGENCIES Operating Commitment The Company leased an office space in Taiwan under non-cancelable operating leases expired on June 30, 2018. As of December 31, 2018, there was no future minimum lease payments under non-cancelable operating and capital leases. Rental expense was $7,497 and $49,245 for the years ended December 31, 2018 and 2017, respectively. |
Pro Forma Financial Statements
Pro Forma Financial Statements | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Pro Forma Financial Statements | 13. PRO FORMA FINANCIAL STATEMENTS On January 31, 2018, American BriVision (Holding) Corporation (“ABVC”, the “Company”) entered into an agreement and plan of merger (the “Merger Agreement”) with BioLite Holding, Inc. (“BioLite”), a Nevada corporation, BioKey, Inc. (“BioKey”), a California corporation, BioLite Acquisition Corp. (“Merger Sub 1”), a Nevada corporation and wholly-owned subsidiary of the Company, and BioKey Acquisition Corp. (“Merger Sub 2”), a California corporation and wholly-owned subsidiary of the Company. Pursuant to the Merger Agreement, on or before the Closing of the Merger, each issued and outstanding share of BioLite shall be converted into the right to receive one point eighty-two (1.82) validly issued, fully-paid and non-assessable shares of the Company and all shares of BioLite shall be cancelled and cease to exist. Also on or before the Closing of the Merger, each issued and outstanding share of BioKey shall be converted into the right to receive one (1) validly issued, fully-paid and non-assessable share of the Company and all shares of BioKey shall be cancelled and cease to exist. Simultaneously upon Closing, BioLite and Merger Sub 1 shall merge together with Merger Sub 1’s articles of incorporation and bylaws as the surviving corporation’s (the “BioLite Surviving Corporation”) articles of incorporation and bylaws and all shares of Merger Sub 1 shall be converted into one share of Common Stock of the BioLite Surviving Corporation, which shall remain a wholly-owned subsidiary of the Company. In addition, upon Closing, BioKey and Merger Sub 2 shall merge together with Merger Sub 2’s articles of incorporation and bylaws as the surviving corporation’s (the “BioKey Surviving Corporation’s”) articles of incorporation and bylaws and all shares of Merger Sub 2 shall be converted into one share of Common Stock of the BioKey Surviving Corporation, which shall remain a wholly-owned subsidiary of the Company. The following unaudited pro forma condensed consolidated combined financial statements reflect the combination of the historical consolidated results of ABVC and its subsidiaries, BioLite, and BioKey on a pro forma basis to give effect to the Merger Agreement. The unaudited pro forma condensed consolidated combined balance sheet of the combined company is based on (i) the audited historical consolidated balance sheet of ABVC as of December 31, 2018, (ii) the audited historical balance sheet of BioLite as of December 31, 2018, and the (iii) the audited historical balance sheet of BioKey as of December 31, 2018, and includes pro forma adjustments as of the Merger had occurred on December 31, 2018. The unaudited pro forma condensed consolidated combined statement of operations of the combined company are based on the following details, and includes pro forma adjustments as of the Merger had occurred on January 1, 2018. (i) the unaudited historical consolidated statement of operations of ABVC for the year ended December 31, 2018. (ii) the audited historical statement of operations of BioLite for the year ended December 31, 2018. (iii) the audited historical statement of operations of BioKey for the year ended December 31, 2018. The unaudited pro forma data presented herein reflects events that are directly attributable to the described transactions, factually supportable, and as it relates to the unaudited pro forma condensed consolidated combined statement of operations, expected to have a continuing impact. The unaudited pro forma data presented herein also reflects certain assumptions which management believes are reasonable. Such pro forma data is not necessarily indicative of financial results that would have been attained had the described transactions occurred on the dates indicated above, or the results of the combined company that may be achieved in the future. The adjustments are based on currently available information and certain estimates and assumptions. Therefore, the actual results may differ from the pro forma results indicated herein. However, management believes that the assumptions provide a reasonable basis for presenting the significant effects of the transactions as contemplated and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed consolidated combined financial statements. The unaudited pro forma condensed consolidated combined financial statements are provided for illustrative purposes only and are not intended to represent or be indicative of the consolidated results of operations or consolidated financial position of the combined company that would have been recorded had the Merger been completed as of the dates presented, and they should not be taken as representative of the expected future results of operations or financial position of the combined company. The unaudited pro forma condensed consolidated combined financial statements do not reflect the impacts of any potential operational efficiencies, asset dispositions, cost savings or economies of scale that the combined company may achieve with respect to the operations of the combined company. Additionally, the unaudited pro forma condensed consolidated combined statement of operations does not include non-recurring charges or credits, and the related tax effects, which result directly from the Merger. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED COMBINED BALANCE SHEET AS OF DECEMBER 31, 2018 Pro Forma Pro Forma ABVC BioKey BioLite Adjustment Note Combined ASSETS Current Assets Cash and cash equivalents $ 40,044 $ 636,666 $ 186,644 - $ 863,354 Restricted cash and cash equivalents 16,093 - - - 16,093 Accounts receivable, net - 43,204 - - 43,204 Accounts receivable - related parties, net - 147,848 - - 147,848 Other receivable - - 39,005 - 39,005 Due from related parties 40,000 - 79,287 (59,810 ) {f} 59,477 Inventory - - 1,318 - 1,318 Prepaid expense and other current assets 136 - 223,759 - 223,895 Total Current Assets 96,273 827,718 530,013 (59,810 ) 1,394,194 Property and equipment, net - 58,150 510,066 568,216 Goodwill, net - - - 43,531,445 {e} 43,531,445 Long-term investments - - 3,488,169 3,448,169 Deferred tax assets - - 1,347,995 1,347,995 Security Deposits - 10,440 27,418 37,858 Total Assets $ 96,273 $ 896,308 $ 5,903,661 $ 43,471,635 $ 50,367,877 LIABILITIES AND EQUITY Current Liabilities Short-term bank loan - - 899,250 - 899,250 Long-term bank loan - current portion - - 39,835 - 39,835 Notes payable - - 510,447 - 510,447 Accrued expenses and other current liabilities 555,449 83,026 687,709 - 1,326,184 Due to related parties 4,462,775 - 3,341,005 (58,684 ) {f} 7,745,096 Convertible notes payable 300,000 - - 300,000 Convertible notes payable - related parties 250,000 - - 250,000 Total Current Liabilities 5,568,224 83,026 5,478,246 (58,684 ) 11,070,812 Long-term bank loan - - 15,257 - 15,257 Tenant security deposit - 2,880 - - 2,880 Convertible notes payable - - - - - Convertible notes payable - related parties 250,000 - - - 250,000 Accrued interest 27,467 - - - 27,467 Total Liabilities 5,845,691 85,906 5,493,503 (58,684 ) 11,366,416 Equity Preferred stock - 18,633,097 - (18,633,097 ) {c} - Common stock 213,927 774,293 4,121 (4,121 ) {a} 318,486 74,998 {a} (771,793 ) {b} 7,428 {b} 22,133 {c} Additional paid-in capital 13,914,556 82,265 10,862,995 (70,877 ) {a} 59,018,959 (82,265 ) {e} 44,312,285 {e} (10,000,000 ) {g} Stock subscription receivable - (1,667 ) - 1,667 {e} - Accumulated deficit (19,877,901 ) (18,677,586 ) (11,445,109 ) 18,677,586 {e} (12,209,446 ) 6,817,848 {g} 2,295,716 {h} 10,000,000 {g} Other comprehensive income - - 670,541 (14,689 ) {g,h} 655,852 Treasury stock - - - (6,750,000 ) {g} (9,100,000 ) (2,350,000 ) {h} Total Stockholders’ deficit (5,749,418 ) 810,402 92,548 43,530,319 38,683,851 Noncontrolling interest - - 317,610 - 317,610 Total Equity (5,749,418 ) 810,402 410,158 43,530,319 39,001,461 Total Liabilities and Equity $ 96,273 $ 896,308 $ 5,903,661 $ 43,471,635 50,367,877 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2018 Pro Forma Pro Forma ABVC BioKey BioLite Adjustment Note Combined Revenues $ - $ 510,197 $ 6,956 $ 517,153 Cost of revenues - 4,809 185,280 190,089 Gross profit - 505,388 (178,324 ) 327,064 Operating expenses Selling, general and administrative expenses 695,148 669,322 893,570 2,258,040 Research and development expenses 669,668 430,917 319,053 1,419,638 Stock based compensation 28,800 - - 28,800 Total operating expenses 1,393,616 1,100,239 1,212,623 3,706,478 Loss from operations (1,393,616 ) (594,851 ) (1,390,947 ) (3,379,414 ) Other income (expense) Interest income 93 4,598 5,119 9,810 Interest expense (155,930 ) - (306,821 ) (462,751 ) Rental income - - 11,924 11,924 Impairment loss - - (63,663 ) (63,663 ) Investment loss (549 ) - (395,476 ) (396,025 ) Gain/Loss on foreign exchange changes - - 7,307 7,307 Gain/Loss on investment in equity securities (2,549,451 ) - (192,463 ) (2,741,914 ) Other income (expense) - 630 (5,154 ) (4,524 ) Total other income (expenses) (2,705,837 ) 5,228 (939,227 ) (3,639,836 ) Loss before provision for income tax (4,099,453 ) (589,623 ) (2,330,174 ) (7,019,250 ) Provision for income tax (benefit) 1,850 800 (366,947 ) (364,297 ) Net loss (4,101,303 ) (590,423 ) (1,963,227 ) (6,654,953 ) Net loss attributable to noncontrolling interests - - 489,151 489,151 Net loss attributable to ABVC and subsidiaries (4,101,303 ) (590,423 ) (1,474,067 ) (7,144,104 ) Foreign currency translation adjustment - - 86,786 86,786 Comprehensive Income (Loss) $ (4,101,303 ) $ (590,423 ) $ (1,560,862 ) $ (7,230,890 ) Net loss per share attributable to common stockholders Basic and diluted $ (0.02 ) $ (0.03 ) Weighted average number of common shares outstanding Basic and diluted 213,884,105 214,156,988 Notes to the Unaudited Pro Forma Condensed Consolidated Combined Financial Statements 1. Basis of Presentation The unaudited pro forma condensed consolidated combined balance sheet as of December 31, 2018 is based on the audited consolidated balance sheet of ABVC, the audited consolidated balance sheet of BioLite, and the audited balance sheet of BioKey as if the Merger had occurred on December 31, 2018. The unaudited pro forma condensed consolidated combined statement of operations for the year ended December 31, 2018 is based on the audited consolidated statement of operations of ABVC for the year ended December 31, 2018, the audited consolidated statement of operations of BioLite for the year ended December 31, 2018, and the audited statement of operations of BioKey for the year ended December 31, 2018, as if the Merger had occurred on January 1, 2018. BioLite and the Company are related parties because the two companies are under common control by Dr. Tsung-Shann Jiang. 2. Pro Forma Adjustments The following adjustments were made in the preparation of the audited pro forma condensed consolidated combined balance sheet and unaudited pro forma condensed consolidated combined statements of operations: {a} Reconciliation of ABVC common stock to be issued to BioLite shareholders: BioLite Outstanding shares as of December 31, 2018 41,207,444 Exchange of each BioLite share of common stock outstanding as of December 31, 2018, for 1.82 shares of ABVC common stock 1.82 ABVC common stock to be issued to BioLite as a result of the Merger 74,997,548 Par value $0.001 per share of ABVC $ 74,998 {b} ABVC common stock to be issued to BioKey shareholders in exchange of BioKey’s common stock outstanding: BioKey Outstanding shares as of December 31, 2018 7,428,134 Exchange of each BioKey share of common stock outstanding as of December 31, 2018, for one share of ABVC common stock 1 ABVC common stock to be issued to BioKey as a result of the Merger 7,428,134 Par value $0.001 per share of ABVC $ 7,428 {c} ABVC common stock to be issued to BioKey shareholders in exchange of BioKey’s preferred stock outstanding: BioKey Outstanding shares as of December 31, 2018 7,000,000 shares of Series A 7,000,000 1,160,000 shares of Series B 1,160,000 13,973,097 shares of Series C 13,973,097 BioKey’s total shares of preferred stock outstanding as of December 31, 2018 22,133,097 Exchange of each BioKey share of preferred stock outstanding as of December 31, 2018, for one share of ABVC common stock 1 ABVC common stock to be issued to BioKey as a result of the Merger 22,133,097 Par value $0.001 per share of ABVC $ 22,133 {d} Common stock outstanding as of December 31, 2018 following the Merger: ABVC common stock issued as of December 31, 2018 213,926,475 ABVC common stock held by BioLite pursuant to the BioLite Collaborative Agreement (see Note {g}) (3,487,500 ) ABVC common stock held by BioLite for cash issuance (see Note {h}) (1,468,750 ) ABVC common stock to be issued to BioLite as a result of the Merger 74,997,548 ABVC common stock to be issued to BioKey as a result of the Merger 29,561,231 Total common stock of the combined company outstanding following the Merger 313,529,004 {e} Unless otherwise noted, adjustments to reflect the elimination of BioKey’s total equity, the estimated value of consideration to be paid in the Merger and to adjust, where required, the historical book values of BioKey’s assets and liabilities as of December 31, 2018 to the preliminary estimated fair value, in accordance with the acquisition method of accounting. The preliminary valuations were determined as of and, where applicable, are based on the bid-and-ask share price of ABVC common stock on the final day of trading, February 5, 2019. The fair value of the consideration given and assets and liabilities acquired will be determined based on the underlying fair values as of the February 5, 2019. Purchase consideration: Common stock (1) $ 44,341,847 Estimated Fair Value of Assets Acquired: Cash and cash equivalents $ 636,666 Accounts receivable 43,204 Accounts receivable - related parties 147,848 Property and equipment 58,150 Security deposits 10,440 Total assets acquired $ 896,308 Estimated Fair Value of Liabilities Assumed: Due to shareholders $ Accrued expenses and other current liabilities 83,026 Tenant security deposit 2,880 Total liabilities assumed $ 85,906 Total net assets acquired $ 810,402 Goodwill as a result of the Merger $ 43,531,445 (1) 29,561,231 shares of ABVC common stock to be issued to BioKey in connection with the Merger. Those shares were valued at $1.50 per share, the closing share price of ABVC on February 5, 2019. {f} As of December 31, 2018, BioLite had $59,810 due from ABVC; and ABVC had $58,684 due to BioLite. The difference was mainly due to the translation adjustment, which would be reflected in accumulated other comprehensive income in equity section. {g} Collaborative agreement with BioLite Inc., a related party On December 29, 2015, American BriVision Corporation (“BriVision”) entered into a collaborative agreement (the “BioLite Collaborative Agreement”) with BioLite, a related party, pursuant to which BioLite granted BriVision sole licensing rights for drug and therapeutic use of five products, including BLI-1005 CNS-Major Depressive Disorder, BLI-1008 CNS-Attention Deficit Hyperactivity Disorder, BLI-1401-1 Anti-Tumor Combination Therapy-Solid Tumor with Anti-PD-1, BLI-1401-2 Anti-Tumor Combination Therapy-Triple Negative Breast Cancer, and BLI-1501 Hematology-Chronic Lymphocytic Leukemia, in the U.S.A and Canada. Under the BioLite Collaborative Agreement, BriVision should pay a total of $100,000,000 in cash or stock of BriVision with equivalent value, according to the following schedule: ● upfront payment shall upon the signing of this BioLite Collaborative Agreement: 3.5% of total payment. After receiving upfront payment from BriVision, BioLite has to deliver all data to BriVision in one week. ● upon the first IND submission, BriVision shall pay, but no later than December 15, 2016: 6.5% of total payment. After receiving second payment from BriVision, BioLite has to deliver IND package to BriVision in one week. ● at the completion of first phase II clinical trial, BriVision shall pay, but no later than September 15, 2017: 15% of total payment. After receiving third payment from BriVision, BioLite has to deliver phase II clinical study report to BriVision in three months. ● upon the phase III IND submission, BriVision shall pay, but no later than December 15, 2018: 20% of total payment. After receiving forth payment from BriVision, BioLite has to deliver IND package to BriVision in one week. ● at the completion of phase III, BriVision shall pay, but no later than September 15, 2019:25% of total payment. After receiving fifth payment from BriVision, BioLite has to deliver phase III clinical study report to BriVision in three months. ● upon the NDA submission, BriVision shall pay, but no later than December 15, 2020, BriVision shall pay: 30% of total payment. After receiving sixth payment from BriVision, BioLite has to deliver NDA package to BriVision in one week. This BioLite Collaborative Agreement shall, once signed by both Parties, remain in effect for fifteen years as of the first commercial sales of the Product in the Territory and automatically renew for five more years unless either party gives the other party six month written notice of termination prior to the expiration date of the term. Pursuant to the BioLite Collaborative Agreement, an upfront payment of $3,500,000 (the “Milestone Payment”), which is 3.5% of total payments due under the BioLite Collaborative Agreement, was to be paid by BriVision upon signing of that agreement. On May 6, 2016, BriVision and BioLite agreed to amend the BioLite Collaborative Agreement, through entry into the Milestone Payment Agreement, whereby BriVision agreed to pay the Milestone Payment to BioLite with $2,600,000 in cash and $900,000 in the form of newly issued shares of its common stock, at the price of $1.60 per share, for an aggregate number of 562,500 shares. The cash payment and shares issuance were completed in June 2016. Pursuant to the BioLite Collaborative Agreement, the 6.5% of total payment, $6,500,000 shall be made upon the first IND submission which was submitted in March 2016. On February 2017, BriVision agreed to pay this amount to BioLite with $650,000 in cash and $5,850,000 in the form of newly issued shares of its common stock, at the price of $2.0 per share, for an aggregate number of 2,925,000 shares. The cash payment and shares issuance were completed in February 2017. Pursuant to the BioLite Collaborative Agreement, the 15% of total payment, $15,000,000 shall be made at the completion of first phase II clinical trial. As of December 31, 2018 and, 2017, the first phase II clinical trial research has not completed yet. The aggregate common stock shares of American BriVision Corporation issued to BioLite pursuant to the BioLite Collaborative Agreement was 3,487,500 shares, the value of which was $6,750,000. The unaudited pro forma adjustments were made as if the Merger occurred on December 31, 2018. As such, these common stock shares of ABVC held by BioLite shall not be treated as outstanding shares, and shall be reflected as treasury shares. The corresponding long-term investment of BioLite has been written off in full amount, included in the accumulated deficit as of December 31, 2018. Such amount has been eliminated in the pro forma condensed balance sheet. Investment loss recognized as a result of the write-off amounted to $4,313,725 for the year ended December 31, 2018. Such amount has been eliminated in the pro forma condensed statement of operations. American BriVision Corporation determined to fully expense the entire amount of $10,000,000 according to ASC 730-10-25-1. The entire amount is fully expensed as research and development expense during the year ended December 31, 2016, included in the accumulated deficit of ABVC as of December 31, 2018. The aggregate amount of $10,000,000 was recorded and remained as additional paid-in capital on BioLite as of December 31, 2018. Such amount has been eliminated in the pro forma condensed balance sheet. {h} On August 26, 2016, ABVC issued 1,468,750 shares of common stock, par value $0.001 to BioLite pursuant to a certain Stock Purchase Agreement dated August 26, 2016. The purchase price per share of the Offering is $1.60. The net proceeds to the Company from the Offering are approximately $2,350,000. The unaudited pro forma adjustments were made as if the Merger occurred on December 31, 2018. As such, these common stock shares of ABVC held by BioLite shall be treated be treated as outstanding shares, and shall be reflected as treasury shares. The corresponding long-term investment of BioLite has been written off in full amount, included in the accumulated deficit as of December 31, 2018. Such amount has been eliminated in the pro forma condensed balance sheet. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 14. SUBSEQUENT EVENTS On January 21, 2019, the Company received a loan in the amount of $500,000 from Cathay Bank (the “Bank”) pursuant to a business loan agreement (the “Loan Agreement”) entered by and between the Company and Bank on January 8, 2019 and a promissory note (the “Note”) executed by the Company on the same day. The Loan Agreement provides for a revolving line of credit in the principal amount of $1,000,000 with a maturity date (the “Maturity Date”) of January 1, 2020. The Note executed in connection with the Loan Agreement bears an interest rate (the “Regular Interest Rate”) equal to the sum of one percent (1%) and the prime rate as published in the Wall Street Journal (the “Index”) and the accrued interest shall become payable each month from February 1, 2019. Pursuant to the Note, the Company shall pay the entire outstanding principal plus accrued unpaid interest on the Maturity Date and may prepay portion or all of the Note before the Maturity Date without penalty. If the Company defaults on the Note, the default interest rate shall become five percent (5%) plus the Regular Interest Rate. In connection with the Note and Loan Agreement, on January 8, 2019, each of Dr. Tsung Shann Jiang and Dr. George Lee, executed a commercial guaranty (the “Guaranty”) to guaranty the loans for the Company pursuant to the Loan Agreement and Note, severally and individually, in the amount not exceeding $500,000 each until the entire Note plus interest are fully paid and satisfied. Dr. Tsung Shann Jiang is the Chairman and Chief Executive Officer of BioLite Holding, Inc. and Dr. George Lee serves as the Chairman of the board of directors of BioKey, Inc, which became a wholly-owned subsidiaries of the Company effective by operation of law on or about February 5, 2019. In addition, on January 8, 2019, each of the Company and BriVision, a wholly-owned subsidiary of the Company, signed a commercial security agreement (the “Security Agreement”) to secure the loans under the Loan Agreement and the Note. Pursuant to the Security Agreements, each of the Company and BriVision (each, a “Grantor”, and collectively, the “Grantors”) granted security interest in the collaterals as defined therein, comprised of almost all of the assets of each Grantor, to secure such loans for the benefit of the Bank. The Company has evaluated subsequent events through the date which the financial statements were available to be issued. All subsequent events requiring recognition as of December 31, 2018 have been incorporated into these financial statements and there are no subsequent events that require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events.” |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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. GAAP”). All significant intercompany transactions and account balances have been eliminated. This basis of accounting involves the application 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. dollars. |
Fiscal Year | Fiscal Year 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 such year. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the amount of revenues and expenses during the reporting periods. Actual results could differ materially from those results. |
Reclassifications | Reclassifications Certain classifications have been made to the prior year financial statements to conform to the current year presentation. The reclassification had no impact on previously reported net loss or accumulated deficit. |
Forward Stock split | Forward Stock split On March 21, 2016, the Board of Directors of the Company approved an amendment to Articles of Incorporation to effect a forward split at a ratio of 1 to 3.141 and increase the number of our authorized shares of Common Stock, par value $0.001 per share, to 360,000,000, which was effective on April 8, 2016. The majority of the shareholders of the Company approved the amendment to Articles of Incorporation. |
Fair Value Measurements | Fair Value Measurements The Company applies the provisions of ASC Subtopic 820-10, “Fair Value Measurements”, for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements. ASC 820 also establishes a framework for measuring fair value and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: - Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. - Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. - Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. The carrying values of certain assets and liabilities of the Company, such as cash and cash equivalents, due from related parties, accrued expenses, and due to related parties approximate fair value due to their relatively short maturities. The carrying value of the Company’s convertible notes payable and accrued interest approximates their fair value as the terms of the borrowing are consistent with current market rates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers highly liquid investments with maturities of three months or less, when purchased, to be cash equivalents. As of December 31, 2018 and 2017, the Company’s cash and cash equivalents amounted $40,044 and $93,332, 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 | Restricted Cash Equivalents Restricted cash equivalents primarily consist of cash held in a reserve bank account in Taiwan. |
Concentration of Credit Risk | Concentration of Credit Risk The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments in high quality credit institutions, but these investments may be in excess of Taiwan Central Deposit Insurance Corporation and the U.S. Federal Deposit Insurance Corporation’s insurance limits. The Company does not enter into financial instruments for hedging, trading or speculative purposes. |
Revenue Recognition | Revenue Recognition The Company has yet to realize revenues from operations. During the fiscal year 2018, the Company adopted Accounting Standards Codification (“ASC”), Topic 606 (ASC 606), Revenue from Contracts with Customers, using the modified retrospective method to all contracts that were not completed as of January 1, 2018, and applying the new revenue standard as an adjustment to the opening balance of accumulated deficit at the beginning of 2018 for the cumulative effect. The results for the Company’s reporting periods beginning on and after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior period. Based on the Company’s review of existing collaborative agreements as of January 1, 2018, the Company concluded that the adoption of the new guidance did not have a significant change on the Company’s revenue during all periods presented. Pursuant to ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the Company expects 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: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance 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 following are examples of when the Company recognizes revenue based on the types of payments the Company receives. Collaborative Revenues — 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 activities. 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) Nonrefundable upfront payments If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in an arrangement, the Company recognizes revenue from the related nonrefundable upfront payments based on the relative standalone selling price prescribed to the license compared to the total selling price of the arrangement. The revenue is recognized when the license is transferred to the collaboration partners and the collaboration partners are able to use and benefit from the license. To date, the receipt of nonrefundable upfront fees was solely for the compensation of past research efforts and contributions made by the Company before the collaborative agreements entered into and it does not relate to any future obligations and commitments made between the Company and the collaboration partners in the collaborative agreements. (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 nonrefundable, (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 accounting. 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. The Company 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 resolved. |
Receivable from Collaboration Partners | Receivable from Collaboration Partners Receivable from collaboration partners is stated at carrying value less estimates made for doubtful receivables. An allowance for impairment of receivable from collaboration partners is established if the collection of a receivable becomes doubtful. Such receivable becomes doubtful when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter into bankruptcy or financial reorganization, and default or delinquency in payments are considered indicators that the receivable is impaired. The amount of the allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. |
Long-term Equity Investment | Long-term Equity Investment The Company acquires the equity investments to promote business and strategic objectives. The Company accounts for non-marketable equity and other equity investments for which the Company does not have control over the investees as: ● Equity method investments when the Company has the ability to exercise significant influence, but not control, over the investee. Its proportionate share of the income or loss is recognized monthly and is recorded in gains (losses) on equity investments. ● Non-marketable cost method investments when the equity method does not apply. Significant judgment is required to identify whether an impairment exists in the valuation of the Company’s non-marketable equity investments, and therefore the Company considers this a critical accounting estimate. Its yearly analysis considers both qualitative and quantitative factors that may have a significant impact on the investee’s fair value. Qualitative analysis of its investments involves understanding the financial performance and near-term prospects of the investee, changes in general market conditions in the investee’s industry or geographic area, and the management and governance structure of the investee. Quantitative assessments of the fair value of its investments are developed using the market and income approaches. The market approach includes the use of comparable financial metrics of private and public companies and recent financing rounds. The income approach includes the use of a discounted cash flow model, which requires significant estimates regarding the investees’ revenue, costs, and discount rates. The Company’s assessment of these factors in determining whether an impairment exists could change in the future due to new developments or changes in applied assumptions. |
Other-Than-Temporary Impairment | Other-Than-Temporary Impairment The Company’s long-term equity investments are subject to a periodic impairment review. Impairments affect earnings as follows: ● Marketable equity securities include the consideration of general market conditions, the duration and extent to which the fair value is below cost, and our ability and intent to hold the investment for a sufficient period of time to allow for recovery of value in the foreseeable future. The Company also considers specific adverse conditions related to the financial health of, and the business outlook for, the investee, which may include industry and sector performance, changes in technology, operational and financing cash flow factors, and changes in the investee’s credit rating. The Company records other-than-temporary impairments on marketable equity securities and marketable equity method investments in gains (losses) on equity investments. ● 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; 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 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 $2,549,451 and $0 for the years ended December 31, 2018 and 2017, respectively. |
Research and Development Expenses | Research and Development Expenses The Company accounts for the cost of using licensing rights in research and development cost according to ASC Topic 730-10-25-1. This guidance provides that 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 when incurred. |
Stock-based Compensation | 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 years ended December 31, 2018 and 2017. The Company accounted for stock-based compensation to non-employees in accordance with FASB ASC Topic 718 “Compensation-Stock Compensation” and FASB ASC Topic 505-50 “Equity-Based Payments to Non-Employees” which requires that the cost of services received from non-employees is measured at fair value at the earlier of the performance commitment date or the date service is completed and recognized over the period the service is provided. Total non-employee stock-based compensation expenses were $28,800 and $155,400 for the years ended December 31, 2018 and 2017, respectively. |
Beneficial Conversion Feature | Beneficial Conversion Feature From time to time, the Company may issue convertible notes that may contain an imbedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability approach which allows the recognition and measurement of deferred tax assets to be based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will expire before the Company is able to realize their benefits, or future deductibility is uncertain. Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The evaluation of a tax position is a two-step process. The first step is to determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigations based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefits recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer satisfied. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the year incurred. No significant penalty or interest relating to income taxes has been incurred for the years ended December 31, 2018 and 2017. 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 Bulletin (“SAB 118”), which provides guidance on accounting for tax effects of the Tax Act. SAB 118 provides a measurement 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. If a 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 we may take. The Company is continuing to gather additional information to determine the final impact. For the years ended December 31, 2018 and 2017, the Company’s income tax expense amounted $1,850 and $830, respectively. |
Loss Per Share of Common Stock | 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. Diluted earnings per share excludes all dilutive potential shares if their effect is anti-dilutive. |
Commitments and Contingencies | Commitments and Contingencies The Company has adopted ASC Topic 450 “Contingencies” 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 assets 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-02, Leases (ASC 842), which was amended by ASU 2018-11, Leases (ASC 842): Targeted Improvements. The new guidance requires lessee recognition on the balance sheet of a right-of-use (ROU) asset and a lease liability, initially measured at the present value of the lease payments. It further requires recognition in the income statement of a single lease cost, calculated so that the cost of the lease is allocated over the lease term generally on a straight-line basis. Finally, it requires classification of all cash payments within operating activities in the statement of cash flows. The standard is effective for public companies for fiscal years beginning after December 15, 2018 and early adoption is permitted. The standard requires a transition adoption election using either 1) a modified retrospective approach with periods prior to the adoption date being recast or 2) a prospective adoption approach with a cumulative-effect adjustment recognized to the opening balance of retained earnings on the adoption date with prior periods not recast. The Company anticipates adopting this standard with an effective date of January 1, 2019 using the prospective adoption approach. The Company has evaluated the changes from this standard to its future financial reporting and disclosures, and has designed and implemented related processes and controls to address these changes. The Company believes the most significant effects relate to (1) the recognition of new ROU assets and lease liabilities on its balance sheet for its office operating lease; and (2) providing significant new disclosures about its leasing activities related to the amount, timing and uncertainty of cash flows arising from leases. The Company is continuing its assessment, which may identify additional impacts this guidance will have on its financial statements and disclosures. On December 22, 2017, the SEC issued Staff Accounting Bulletin (“SAB 118”), which provides guidance on accounting for tax effects of the Tax Act. SAB 118 provides a measurement 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. In March 2018, the FASB issued ASU 2018-05, Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (SEC Update), Income Taxes (Topic 740). ASU 2018-05 provides guidance regarding the recording of tax impacts where uncertainty exists, in the period of adoption of the 2017 U.S. Tax Cuts and Jobs Act (the “2017 Tax Act”).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. If a 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 its interpretations and assumptions, additional guidance that may be issued by the I.R.S., and actions that the Company may take. The Company has accounted for the tax effects of the Tax Cuts and Jobs Act under the guidance of SAB 118, on a provisional basis. The Company’s accounting for certain income tax effects is incomplete, but the Company has determined reasonable estimates for those effects The Company is continuing to gather additional information to determine the final impact on its condensed consolidated financial statements. In February 2018, the FASB issued Accounting Standards Update No. 2018-02 (“ASU 2018-02”), Income Statement - Reporting Comprehensive Income (Topic 220). The guidance in ASU 2018-02 allows an entity to elect to reclassify the stranded tax effects related to the Tax Cuts and Jobs Act (the Tax Act) of 2017 from accumulated other comprehensive income into retained earnings. ASU 2018-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its condensed consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718), Improvements to Nonemployee Share-based Payments (“ASU 2018-07”). This ASU expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The effective date for the standard is for interim periods in fiscal years beginning after December 15, 2018, with early adoption permitted, but no earlier than the Company’s adoption date of Topic 606. Under the new guidance, the measurement of nonemployee equity awards is fixed on the grant date. The new guidance is required to be applied retrospectively with the cumulative effect recognized at the date of initial application. The Company is currently evaluating the effect ASU 2018-07 will have on the condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (“Topic 820”): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). The ASU modifies the disclosure requirements in Topic 820, Fair Value Measurement, by removing certain disclosure requirements related to the fair value hierarchy, modifying existing disclosure requirements related to measurement uncertainty and adding new disclosure requirements, such as disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and disclosing the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This ASU is effective for public companies for annual reporting periods and interim periods within those annual periods beginning after December 15, 2019. The Company is currently evaluating the effect, if any, that the ASU 2018-13 will have on its financial statements. |
Long-Term Investment (Tables)
Long-Term Investment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Longterm Investment Tables Abstract | |
Schedule of ownership percentages of investee | Ownership percentage December 31, December 31, Accounting Name of related party 2018 2017 treatment Rgene Corporation 23.90 % N/A Equity Method |
Schedule of long-term investment | December 31, December 31, 2018 2017 Equity Method Investments, net of impairment Rgene Corporation $ - N/A Total $ - N/A |
Schedule of balance sheets | Pro Forma Pro Forma ABVC BioKey BioLite Adjustment Note Combined ASSETS Current Assets Cash and cash equivalents $ 40,044 $ 636,666 $ 186,644 - $ 863,354 Restricted cash and cash equivalents 16,093 - - - 16,093 Accounts receivable, net - 43,204 - - 43,204 Accounts receivable - related parties, net - 147,848 - - 147,848 Other receivable - - 39,005 - 39,005 Due from related parties 40,000 - 79,287 (59,810 ) {f} 59,477 Inventory - - 1,318 - 1,318 Prepaid expense and other current assets 136 - 223,759 - 223,895 Total Current Assets 96,273 827,718 530,013 (59,810 ) 1,394,194 Property and equipment, net - 58,150 510,066 568,216 Goodwill, net - - - 43,531,445 {e} 43,531,445 Long-term investments - - 3,488,169 3,448,169 Deferred tax assets - - 1,347,995 1,347,995 Security Deposits - 10,440 27,418 37,858 Total Assets $ 96,273 $ 896,308 $ 5,903,661 $ 43,471,635 $ 50,367,877 LIABILITIES AND EQUITY Current Liabilities Short-term bank loan - - 899,250 - 899,250 Long-term bank loan - current portion - - 39,835 - 39,835 Notes payable - - 510,447 - 510,447 Accrued expenses and other current liabilities 555,449 83,026 687,709 - 1,326,184 Due to related parties 4,462,775 - 3,341,005 (58,684 ) {f} 7,745,096 Convertible notes payable 300,000 - - 300,000 Convertible notes payable - related parties 250,000 - - 250,000 Total Current Liabilities 5,568,224 83,026 5,478,246 (58,684 ) 11,070,812 Long-term bank loan - - 15,257 - 15,257 Tenant security deposit - 2,880 - - 2,880 Convertible notes payable - - - - - Convertible notes payable - related parties 250,000 - - - 250,000 Accrued interest 27,467 - - - 27,467 Total Liabilities 5,845,691 85,906 5,493,503 (58,684 ) 11,366,416 Equity Preferred stock - 18,633,097 - (18,633,097 ) {c} - Common stock 213,927 774,293 4,121 (4,121 ) {a} 318,486 74,998 {a} (771,793 ) {b} 7,428 {b} 22,133 {c} Additional paid-in capital 13,914,556 82,265 10,862,995 (70,877 ) {a} 59,018,959 (82,265 ) {e} 44,312,285 {e} (10,000,000 ) {g} Stock subscription receivable - (1,667 ) - 1,667 {e} - Accumulated deficit (19,877,901 ) (18,677,586 ) (11,445,109 ) 18,677,586 {e} (12,209,446 ) 6,817,848 {g} 2,295,716 {h} 10,000,000 {g} Other comprehensive income - - 670,541 (14,689 ) {g,h} 655,852 Treasury stock - - - (6,750,000 ) {g} (9,100,000 ) (2,350,000 ) {h} Total Stockholders’ deficit (5,749,418 ) 810,402 92,548 43,530,319 38,683,851 Noncontrolling interest - - 317,610 - 317,610 Total Equity (5,749,418 ) 810,402 410,158 43,530,319 39,001,461 Total Liabilities and Equity $ 96,273 $ 896,308 $ 5,903,661 $ 43,471,635 50,367,877 |
Schedule of statements of operation | Pro Forma Pro Forma ABVC BioKey BioLite Adjustment Note Combined Revenues $ - $ 510,197 $ 6,956 $ 517,153 Cost of revenues - 4,809 185,280 190,089 Gross profit - 505,388 (178,324 ) 327,064 Operating expenses Selling, general and administrative expenses 695,148 669,322 893,570 2,258,040 Research and development expenses 669,668 430,917 319,053 1,419,638 Stock based compensation 28,800 - - 28,800 Total operating expenses 1,393,616 1,100,239 1,212,623 3,706,478 Loss from operations (1,393,616 ) (594,851 ) (1,390,947 ) (3,379,414 ) Other income (expense) Interest income 93 4,598 5,119 9,810 Interest expense (155,930 ) - (306,821 ) (462,751 ) Rental income - - 11,924 11,924 Impairment loss - - (63,663 ) (63,663 ) Investment loss (549 ) - (395,476 ) (396,025 ) Gain/Loss on foreign exchange changes - - 7,307 7,307 Gain/Loss on investment in equity securities (2,549,451 ) - (192,463 ) (2,741,914 ) Other income (expense) - 630 (5,154 ) (4,524 ) Total other income (expenses) (2,705,837 ) 5,228 (939,227 ) (3,639,836 ) Loss before provision for income tax (4,099,453 ) (589,623 ) (2,330,174 ) (7,019,250 ) Provision for income tax (benefit) 1,850 800 (366,947 ) (364,297 ) Net loss (4,101,303 ) (590,423 ) (1,963,227 ) (6,654,953 ) Net loss attributable to noncontrolling interests - - 489,151 489,151 Net loss attributable to ABVC and subsidiaries (4,101,303 ) (590,423 ) (1,474,067 ) (7,144,104 ) Foreign currency translation adjustment - - 86,786 86,786 Comprehensive Income (Loss) $ (4,101,303 ) $ (590,423 ) $ (1,560,862 ) $ (7,230,890 ) Net loss per share attributable to common stockholders Basic and diluted $ (0.02 ) $ (0.03 ) Weighted average number of common shares outstanding Basic and diluted 213,884,105 214,156,988 |
Schedule of equity investments | For the Years Ended 2018 2017 Share of equity method investee losses $ (549 ) N/A Impairments (2,549,451 ) N/A Total losses on equity investments $ (2,550,000 ) N/A |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | December 31, December 31, Accrued payroll $ 444,400 $ 110,800 Accrued rent 4,941 Accrued interest expense – related party (Note 7) 18,868 17,460 Accrued expenses 87,240 42,667 Total $ 555,449 $ 170,927 |
Related Parties Transactions (T
Related Parties Transactions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions | Name of entity or Individual Relationship with the Company and its subsidiaries BioLite Inc. (the “BioLite”) Shareholder of the Company; entity controlled by controlling beneficiary shareholder of YuanGene BioFirst Corporation (the “BioFirst”) Entity controlled by controlling beneficiary shareholder of YuanGene BioFirst (Australia) Pty Ltd. (the BioFirst (Australia)”) 100% owned by BioFirst; Entity controlled by controlling beneficiary shareholder of YuanGene Rgene Corporation (the “Rgene”) Shareholder of the Company; entity controlled by controlling beneficiary shareholder of YuanGene LionGene Corporation (the “LionGene”) Shareholder of the Company; entity controlled by controlling beneficiary shareholder of YuanGene YuanGene Corporation (the “YuanGene”) Controlling beneficiary shareholder of the Company AsianGene Corporation (the “AsianGene”) Shareholder; entity controlled by controlling beneficiary shareholder of YuanGene Eugene Jiang Former President and Chairman Keypoint Technology Ltd. (the “Keypoint’) The Chairman of Keypoint is Eugene Jiang’s mother. Yoshinobu Odaira (the “Odaira”) Director of the Company Euro-Asia Investment & Finance Corp Ltd. (the “Euro-Asia”) Shareholder of the Company Kimho Consultants Co., Ltd. (the “Kimho”) Shareholder of the Company BioKey, Inc. (the “BioKey”) One of wholly-owned subsidiaries of ABVC upon closing of the Mergers on February 8, 2019 |
Schedule of other receivable related parties | December 31, December 31, 2018 2017 BioFirst (Australia) $ 40,000 $ - Total $ 40,000 $ - |
Schedule of amount due to related party | December 31, December 31, 2018 2017 BioLite Inc. $ 58,684 $ 109,220 BioFirst Corporation 4,151,301 3,957,000 AsianGene Corporation 160,000 160,000 YuanGene Corporation 92,690 3,000 Eugene Jiang 100 100 Total $ 4,462,775 $ 4,229,320 |
Income Tax (Tables)
Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Summary of income tax (benefits) | Year ended Year ended Federal State Total Federal State Total Current $ - $ 1,850 $ 1,850 $ - $ 830 $ 830 Deferred - - - - - - $ - $ 1,850 $ 1,850 $ - $ 830 $ 830 |
Schedule of deferred tax | Deferred Tax Account - noncurrent: December 31, December 31, Tax losses carryforwards $ 913,954 $ 594,501 Less: Valuation allowance (913,954 ) (594,501 ) Total deferred tax account - noncurrent $ - $ - |
Schedule of statutory U.S. tax rate | Years ended 2018 2017 Statutory federal tax benefit, net of state tax effects 19 % 31 % State income taxes 8.84 % 8.84 % Provisional remeasurement of deferred taxes - % (13 )% Nondeductible/nontaxable items (1 )% (4 )% Change in valuation allowance (26.84 )% (22.84 )% Effective income tax rate 0 % 0 % |
Loss per Share (Tables)
Loss per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of loss per share | Years Ended 2018 2017 Numerator: Net loss $ (4,101,303 ) $ (4,242,860 ) Denominator: Weighted-average shares outstanding: Weighted-average shares outstanding - Basic 213,884,105 213,321,921 Stock options - - Weighted-average shares outstanding - Diluted 213,884,105 213,321,921 Loss per share -Basic $ (0.02 ) $ (0.02 ) -Diluted $ (0.02 ) $ (0.02 ) |
Pro Forma Financial Statements
Pro Forma Financial Statements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of unaudited pro forma condensed consolidated combined balance sheet | Pro Forma Pro Forma ABVC BioKey BioLite Adjustment Note Combined ASSETS Current Assets Cash and cash equivalents $ 40,044 $ 636,666 $ 186,644 - $ 863,354 Restricted cash and cash equivalents 16,093 - - - 16,093 Accounts receivable, net - 43,204 - - 43,204 Accounts receivable - related parties, net - 147,848 - - 147,848 Other receivable - - 39,005 - 39,005 Due from related parties 40,000 - 79,287 (59,810 ) {f} 59,477 Inventory - - 1,318 - 1,318 Prepaid expense and other current assets 136 - 223,759 - 223,895 Total Current Assets 96,273 827,718 530,013 (59,810 ) 1,394,194 Property and equipment, net - 58,150 510,066 568,216 Goodwill, net - - - 43,531,445 {e} 43,531,445 Long-term investments - - 3,488,169 3,448,169 Deferred tax assets - - 1,347,995 1,347,995 Security Deposits - 10,440 27,418 37,858 Total Assets $ 96,273 $ 896,308 $ 5,903,661 $ 43,471,635 $ 50,367,877 LIABILITIES AND EQUITY Current Liabilities Short-term bank loan - - 899,250 - 899,250 Long-term bank loan - current portion - - 39,835 - 39,835 Notes payable - - 510,447 - 510,447 Accrued expenses and other current liabilities 555,449 83,026 687,709 - 1,326,184 Due to related parties 4,462,775 - 3,341,005 (58,684 ) {f} 7,745,096 Convertible notes payable 300,000 - - 300,000 Convertible notes payable - related parties 250,000 - - 250,000 Total Current Liabilities 5,568,224 83,026 5,478,246 (58,684 ) 11,070,812 Long-term bank loan - - 15,257 - 15,257 Tenant security deposit - 2,880 - - 2,880 Convertible notes payable - - - - - Convertible notes payable - related parties 250,000 - - - 250,000 Accrued interest 27,467 - - - 27,467 Total Liabilities 5,845,691 85,906 5,493,503 (58,684 ) 11,366,416 Equity Preferred stock - 18,633,097 - (18,633,097 ) {c} - Common stock 213,927 774,293 4,121 (4,121 ) {a} 318,486 74,998 {a} (771,793 ) {b} 7,428 {b} 22,133 {c} Additional paid-in capital 13,914,556 82,265 10,862,995 (70,877 ) {a} 59,018,959 (82,265 ) {e} 44,312,285 {e} (10,000,000 ) {g} Stock subscription receivable - (1,667 ) - 1,667 {e} - Accumulated deficit (19,877,901 ) (18,677,586 ) (11,445,109 ) 18,677,586 {e} (12,209,446 ) 6,817,848 {g} 2,295,716 {h} 10,000,000 {g} Other comprehensive income - - 670,541 (14,689 ) {g,h} 655,852 Treasury stock - - - (6,750,000 ) {g} (9,100,000 ) (2,350,000 ) {h} Total Stockholders’ deficit (5,749,418 ) 810,402 92,548 43,530,319 38,683,851 Noncontrolling interest - - 317,610 - 317,610 Total Equity (5,749,418 ) 810,402 410,158 43,530,319 39,001,461 Total Liabilities and Equity $ 96,273 $ 896,308 $ 5,903,661 $ 43,471,635 50,367,877 |
Schedule of unaudited pro forma condensed consolidated statements of operations | Pro Forma Pro Forma ABVC BioKey BioLite Adjustment Note Combined Revenues $ - $ 510,197 $ 6,956 $ 517,153 Cost of revenues - 4,809 185,280 190,089 Gross profit - 505,388 (178,324 ) 327,064 Operating expenses Selling, general and administrative expenses 695,148 669,322 893,570 2,258,040 Research and development expenses 669,668 430,917 319,053 1,419,638 Stock based compensation 28,800 - - 28,800 Total operating expenses 1,393,616 1,100,239 1,212,623 3,706,478 Loss from operations (1,393,616 ) (594,851 ) (1,390,947 ) (3,379,414 ) Other income (expense) Interest income 93 4,598 5,119 9,810 Interest expense (155,930 ) - (306,821 ) (462,751 ) Rental income - - 11,924 11,924 Impairment loss - - (63,663 ) (63,663 ) Investment loss (549 ) - (395,476 ) (396,025 ) Gain/Loss on foreign exchange changes - - 7,307 7,307 Gain/Loss on investment in equity securities (2,549,451 ) - (192,463 ) (2,741,914 ) Other income (expense) - 630 (5,154 ) (4,524 ) Total other income (expenses) (2,705,837 ) 5,228 (939,227 ) (3,639,836 ) Loss before provision for income tax (4,099,453 ) (589,623 ) (2,330,174 ) (7,019,250 ) Provision for income tax (benefit) 1,850 800 (366,947 ) (364,297 ) Net loss (4,101,303 ) (590,423 ) (1,963,227 ) (6,654,953 ) Net loss attributable to noncontrolling interests - - 489,151 489,151 Net loss attributable to ABVC and subsidiaries (4,101,303 ) (590,423 ) (1,474,067 ) (7,144,104 ) Foreign currency translation adjustment - - 86,786 86,786 Comprehensive Income (Loss) $ (4,101,303 ) $ (590,423 ) $ (1,560,862 ) $ (7,230,890 ) Net loss per share attributable to common stockholders Basic and diluted $ (0.02 ) $ (0.03 ) Weighted average number of common shares outstanding Basic and diluted 213,884,105 214,156,988 |
Schedule of reconciliation of ABVC common stock to be issued to BioLite shareholders | BioLite Outstanding shares as of December 31, 2018 41,207,444 Exchange of each BioLite share of common stock outstanding as of December 31, 2018, for 1.82 shares of ABVC common stock 1.82 ABVC common stock to be issued to BioLite as a result of the Merger 74,997,548 Par value $0.001 per share of ABVC $ 74,998 |
Schedule of ABVC common stock to be issued to BioKey shareholders in exchange of BioKey’s common stock outstanding | BioKey Outstanding shares as of December 31, 2018 7,428,134 Exchange of each BioKey share of common stock outstanding as of December 31, 2018, for one share of ABVC common stock 1 ABVC common stock to be issued to BioKey as a result of the Merger 7,428,134 Par value $0.001 per share of ABVC $ 7,428 |
Schedule of ABVC common stock to be issued to BioKey shareholders in exchange of BioKey’s preferred stock outstanding | BioKey Outstanding shares as of December 31, 2018 7,000,000 shares of Series A 7,000,000 1,160,000 shares of Series B 1,160,000 13,973,097 shares of Series C 13,973,097 BioKey’s total shares of preferred stock outstanding as of December 31, 2018 22,133,097 Exchange of each BioKey share of preferred stock outstanding as of December 31, 2018, for one share of ABVC common stock 1 ABVC common stock to be issued to BioKey as a result of the Merger 22,133,097 Par value $0.001 per share of ABVC $ 22,133 |
Schedule of Common stock outstanding | ABVC common stock issued as of December 31, 2018 213,926,475 ABVC common stock held by BioLite pursuant to the BioLite Collaborative Agreement (see Note {g}) (3,487,500 ) ABVC common stock held by BioLite for cash issuance (see Note {h}) (1,468,750 ) ABVC common stock to be issued to BioLite as a result of the Merger 74,997,548 ABVC common stock to be issued to BioKey as a result of the Merger 29,561,231 Total common stock of the combined company outstanding following the Merger 313,529,004 {g} Collaborative agreement with BioLite Inc., a related party On December 29, 2015, American BriVision Corporation (“BriVision”) entered into a collaborative agreement (the “BioLite Collaborative Agreement”) with BioLite, a related party, pursuant to which BioLite granted BriVision sole licensing rights for drug and therapeutic use of five products, including BLI-1005 CNS-Major Depressive Disorder, BLI-1008 CNS-Attention Deficit Hyperactivity Disorder, BLI-1401-1 Anti-Tumor Combination Therapy-Solid Tumor with Anti-PD-1, BLI-1401-2 Anti-Tumor Combination Therapy-Triple Negative Breast Cancer, and BLI-1501 Hematology-Chronic Lymphocytic Leukemia, in the U.S.A and Canada. Under the BioLite Collaborative Agreement, BriVision should pay a total of $100,000,000 in cash or stock of BriVision with equivalent value, according to the following schedule: {h} On August 26, 2016, ABVC issued 1,468,750 shares of common stock, par value $0.001 to BioLite pursuant to a certain Stock Purchase Agreement dated August 26, 2016. The purchase price per share of the Offering is $1.60. The net proceeds to the Company from the Offering are approximately $2,350,000. The unaudited pro forma adjustments were made as if the Merger occurred on December 31, 2018. As such, these common stock shares of ABVC held by BioLite shall be treated be treated as outstanding shares, and shall be reflected as treasury shares. The corresponding long-term investment of BioLite has been written off in full amount, included in the accumulated deficit as of December 31, 2018. Such amount has been eliminated in the pro forma condensed balance sheet. |
Schedule of the fair value of the consideration given and assets and liabilities acquired | Purchase consideration: Common stock (1) $ 44,341,847 Estimated Fair Value of Assets Acquired: Cash and cash equivalents $ 636,666 Accounts receivable 43,204 Accounts receivable - related parties 147,848 Property and equipment 58,150 Security deposits 10,440 Total assets acquired $ 896,308 Estimated Fair Value of Liabilities Assumed: Due to shareholders $ Accrued expenses and other current liabilities 83,026 Tenant security deposit 2,880 Total liabilities assumed $ 85,906 Total net assets acquired $ 810,402 Goodwill as a result of the Merger $ 43,531,445 (1) 29,561,231 shares of ABVC common stock to be issued to BioKey in connection with the Merger. Those shares were valued at $1.50 per share, the closing share price of ABVC on February 5, 2019. |
Organization and Description _2
Organization and Description of Business (Details) | Feb. 08, 2016shares |
Share Exchange Agreement [Member] | |
Organization and Description of Business (Textual) | |
Common stock issued post-stock split | 164,387,376 |
Common stock issued pre-stock split | 52,336,000 |
Share Exchange Agreement One [Member] | |
Organization and Description of Business (Textual) | |
Common stock issued post-stock split | 166,273,921 |
Common stock issued pre-stock split | 52,936,583 |
Share Exchange Agreement Two [Member] | |
Organization and Description of Business (Textual) | |
Common stock issued post-stock split | 163,159,952 |
Common stock issued pre-stock split | 51,945,225 |
Percentage of common shares issued and outstanding | 79.70% |
Percentage of issued share capital | 100.00% |
Share Exchange Agreement Three [Member] | |
Organization and Description of Business (Textual) | |
Common stock issued post-stock split | 166,273,921 |
Common stock issued pre-stock split | 52,936,583 |
Common stock converted to exchange ratio | 0.2536-for-1 |
Share Exchange Agreement Four [Member] | |
Organization and Description of Business (Textual) | |
Common stock issued post-stock split | 205,519,223 |
Common stock issued pre-stock split | 65,431,144 |
Percentage of common shares issued and outstanding | 79.70% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | Mar. 21, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Summary of Significant Accounting Policies (Textual) | ||||
Forward split ratio | 1 to 3.141 | |||
Common stock, par value | $ 0.001 | $ 0.001 | ||
Common stock, authorized | 360,000,000 | 360,000,000 | ||
Cash and cash equivalents | $ 40,044 | $ 93,332 | $ 18,645 | |
Income tax expense | 1,850 | 830 | ||
Employee stock-based compensation expenses | 0 | 0 | ||
Non-employee stock-based compensation expenses | $ 28,800 | 155,400 | ||
Income taxes ultimate settlement, percentage | 50.00% | |||
Loss on investment in equity securities | $ (2,549,451) |
Going Concern (Details)
Going Concern (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Going Concern (Textual) | ||
Accumulated deficit | $ (19,877,901) | $ (15,776,598) |
Net loss | (4,101,303) | (4,242,860) |
Working capital deficiency | $ 5,471,951 | $ 1,756,915 |
Collaborative Agreements (Detai
Collaborative Agreements (Details) - USD ($) | May 06, 2016 | Dec. 29, 2015 | Dec. 24, 2018 | Sep. 30, 2017 | Sep. 25, 2017 | Jul. 24, 2017 | May 26, 2017 | Feb. 28, 2017 | Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 |
Collaborative Agreements (Textual) | |||||||||||
Common stock newly issued, value | $ 80,000 | $ 5,850,000 | |||||||||
Outstanding balance | 2,550,000 | ||||||||||
Collaborative Arrangement [Member] | |||||||||||
Collaborative Agreements (Textual) | |||||||||||
Description of payment settlement | Upfront payment shall upon the signing of this BioLite Collaborative Agreement: 3.5% of total payment. After receiving upfront payment from BriVision, BioLite has to deliver all data to BriVision in one week. Upon the first IND submission, BriVision shall pay, but no later than December 15, 2016: 6.5% of total payment. After receiving second payment from BriVision, BioLite has to deliver IND package to BriVision in one week. At the completion of first phase II clinical trial, BriVision shall pay, but no later than September 15, 2017: 15% of total payment. After receiving third payment from BriVision, BioLite has to deliver phase II clinical study report to BriVision in three months. Upon the phase III IND submission, BriVision shall pay, but no later than December 15, 2018: 20% of total payment. After receiving forth payment from BriVision, BioLite has to deliver IND package to BriVision in one week. At the completion of phase III, BriVision shall pay, but no later than September 15, 2019:25% of total payment. After receiving fifth payment from BriVision, BioLite has to deliver phase III clinical study report to BriVision in three months. Upon the NDA submission, BriVision shall pay, but no later than December 15, 2020, BriVision shall pay: 30% of total payment. After receiving sixth payment from BriVision, BioLite has to deliver NDA package to BriVision in one week. | ||||||||||
Amount received from BriVision | $ 100,000,000 | $ 3,000,000 | |||||||||
Upfront payments | $ 3,500,000 | ||||||||||
Percentage of payments under collaborative agreement | 3.50% | 50.00% | 15.00% | ||||||||
Milestone payments to BioLite in cash | $ 2,600,000 | ||||||||||
Common stock newly issued, value | $ 900,000 | $ 3,000,000 | |||||||||
Common stock newly issued, shares | 562,500 | ||||||||||
Share price | $ 1.60 | $ 2 | |||||||||
Licensing rights | $ 10,000,000 | ||||||||||
Accounts payable | $ 15,000,000 | ||||||||||
Agreement, terms | This BioLite Collaborative Agreement shall, once signed by both Parties, remain in effect for fifteen years as of the first commercial sales of the Product in the Territory and automatically renew for five more years unless either party gives the other party six month written notice of termination prior to the expiration date of the term. | ||||||||||
Collaborative Arrangement One [Member] | |||||||||||
Collaborative Agreements (Textual) | |||||||||||
Percentage of payments under collaborative agreement | 6.50% | ||||||||||
Milestone payments to BioLite in cash | $ 650,000 | ||||||||||
Common stock newly issued, value | $ 5,850,000 | ||||||||||
Common stock newly issued, shares | 2,925,000 | ||||||||||
Share price | $ 2 | ||||||||||
Licensing rights | $ 3,000,000 | ||||||||||
Accounts payable | $ 6,500,000 | ||||||||||
Research and development expense | 3,000,000 | ||||||||||
Co-Dev Agreement [Member] | |||||||||||
Collaborative Agreements (Textual) | |||||||||||
Amount received from BriVision | $ 3,000,000 | $ 450,000 | |||||||||
Percentage of payments under collaborative agreement | 50.00% | ||||||||||
Company cash payments | $ 3,000,000 | $ 3,000,000 | |||||||||
Co-Dev agreement, description | 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 $549. |
Long-Term Investment (Details)
Long-Term Investment (Details) - Rgene Corporation [Member] | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Ownership percentage | 23.90% | |
Accounting treatment | Equity Method |
Long-Term Investment (Details 1
Long-Term Investment (Details 1) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Equity Method Investments, net of impairment | ||
Total | ||
Rgene Corporation [Member] | ||
Equity Method Investments, net of impairment | ||
Total |
Long-Term Investment (Details 2
Long-Term Investment (Details 2) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Current Assets | $ 96,273 | $ 2,643,332 | |
Current Liabilities | 5,568,224 | 4,400,247 | |
Shareholders’ Deficit | (5,749,418) | (1,756,915) | $ (6,519,455) |
Rgene Corporation [Member] | |||
Current Assets | 98,168 | ||
Noncurrent Assets | 14,779 | ||
Current Liabilities | 261,685 | ||
Shareholders’ Deficit | $ (148,738) |
Long-Term Investment (Details 3
Long-Term Investment (Details 3) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Net sales | ||
Gross Profit | ||
Net loss | (4,101,303) | (4,242,860) |
Share of loss from investments accounted for using the equity method | (549) | |
Rgene Corporation [Member] | ||
Net sales | ||
Gross Profit | ||
Net loss | (120,065) | |
Share of loss from investments accounted for using the equity method | $ (549) |
Long-Term Investment (Details 4
Long-Term Investment (Details 4) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Long-Term Investment [Abstract] | ||
Share of equity method investee losses | $ (549) | |
Impairments | (2,549,451) | |
Total losses on equity investments | $ (2,550,000) |
Long-Term Investment (Details T
Long-Term Investment (Details Textual) - USD ($) | Dec. 24, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Long-Term Investment (Textual) | |||
Issued shares | $ 80,000 | $ 5,850,000 | |
Rgene Corporation [Member] | |||
Long-Term Investment (Textual) | |||
Issued shares | $ 2,550,000 | ||
Common stock price | $ 1.60 | ||
Aggregate number of shares | 530,000 | ||
Percentage of common stock shares | 23.90% |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accrued payroll | $ 444,400 | $ 110,800 |
Accrued rent | 4,941 | |
Accrued interest expense - related party (Note 7) | 18,868 | 17,460 |
Accrued expenses | 87,240 | 42,667 |
Total | $ 555,449 | $ 170,927 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details) - USD ($) | Aug. 25, 2018 | Jun. 27, 2018 | May 09, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Convertible Notes Payable (Textual) | |||||
Accrued convertible interest | $ 281 | $ 17,460 | |||
Interest expense | 27,467 | ||||
Unsecured convertible promissory note [Member] | |||||
Convertible Notes Payable (Textual) | |||||
Aggregate principal amount | $ 250,000 | $ 250,000 | $ 300,000 | ||
Bears interest rate | 8.00% | 8.00% | 8.00% | ||
Convertible promissory note received | $ 250,000 | $ 250,000 | $ 300,000 | ||
Equity offering, description | The Company raises gross proceeds from the sale of its common stock of at least $5,000,000 (an "Equity Offering") then within five days of the closing for such offering, the Company must repay the outstanding amount of this Odaira Note. | The Company raises gross proceeds from the sale of its common stock of at least $5,000,000 (an "Equity Offering") then within five days of the closing for such offering, the Company must repay the outstanding amount of this Keypoint Note. | The Company raises gross proceeds from the sale of its common stock of at least $5,000,000 (an "Equity Offering") then within five days of the closing for such offering, the Company must repay the outstanding amount of this Yu and Wei Note. | ||
Conversion price, description | (i) $2.00 per share (the "Fixed Conversion Price"), subject to adjustment or (ii) 80% of the per share offering price (the "Alternative Conversion Price") of any completed equity offering of the Company in an amount exceeding $500,000 that occurs when any part of the Odaira Note is outstanding, subject to adjustments set forth in the Odaira Note. In accordance with FASB ASC 470-20, the Company recognized none of the intrinsic value of embedded beneficial conversion feature present in the Odaira Note as of December 31, 2018. | (i) $2.00 per share (the "Fixed Conversion Price"), subject to adjustment or (ii) 80% of the per share offering price (the "Alternative Conversion Price") of any completed equity offering of the Company in an amount exceeding $500,000 that occurs when any part of the Keypoint Note is outstanding, subject to adjustments set forth in the Keypoint Note. In accordance with FASB ASC 470-20, the Company recognized none of the intrinsic value of embedded beneficial conversion feature present in the Keypoint Note as of December 31, 2018. | (i) $2.00 per share (the "Fixed Conversion Price"), subject to adjustment or (ii) 80% of the per share offering price (the "Alternative Conversion Price") of any completed equity offering of the Company in an amount exceeding $500,000 that occurs when any part of the Yu and Wei Note is outstanding, subject to adjustments set forth in the Yu and Wei Note. In accordance with FASB ASC 470-20, the Company recognized none of the intrinsic value of embedded beneficial conversion feature present in the Yu and Wei Note as of December 31, 2018. | ||
Convertible debenture | 800,000 | ||||
Accrued convertible interest | 27,467 | ||||
Interest expense | $ 27,467 | $ 0 |
Related Parties Transactions (D
Related Parties Transactions (Details) | 12 Months Ended |
Dec. 31, 2018 | |
BioLite Inc. (the “BioLite”) [Member] | |
Relationship with the Company and its subsidiaries, description | Shareholder of the Company; entity controlled by controlling beneficiary shareholder of YuanGene |
BioFirst Corporation (the “BioFirst”) [Member] | |
Relationship with the Company and its subsidiaries, description | Entity controlled by controlling beneficiary shareholder of YuanGene |
BioFirst (Australia) Pty Ltd. (the BioFirst (Australia)") [Member] | |
Relationship with the Company and its subsidiaries, description | 100% owned by BioFirst; Entity controlled by controlling beneficiary shareholder of YuanGene |
Rgene Corporation (the “Rgene”) [Member] | |
Relationship with the Company and its subsidiaries, description | Shareholder of the Company; entity controlled by controlling beneficiary shareholder of YuanGene |
YuanGene Corporation (the “YuanGene”) [Member] | |
Relationship with the Company and its subsidiaries, description | Controlling beneficiary shareholder of the Company |
AsianGene Corporation (the “AsianGene”) [Member] | |
Relationship with the Company and its subsidiaries, description | Shareholder; entity controlled by controlling beneficiary shareholder of YuanGene |
Eugene Jiang [Member] | |
Relationship with the Company and its subsidiaries, description | Former President and Chairman |
Keypoint Technology Ltd. (the "Keypoint') [Member] | |
Relationship with the Company and its subsidiaries, description | The Chairman of Keypoint is Eugene Jiang’s mother. |
Yoshinobu Odaira (the “Odaira”) [Member] | |
Relationship with the Company and its subsidiaries, description | Director of the Company |
Euro-Asia Investment & Finance Corp Ltd. (the “Euro-Asia”) [Member] | |
Relationship with the Company and its subsidiaries, description | Shareholder of the Company |
Kimho Consultants Co., Ltd. (the “Kimho”) [Member] | |
Relationship with the Company and its subsidiaries, description | Shareholder of the Company |
BioKey, Inc. (the “BioKey”) [Member] | |
Relationship with the Company and its subsidiaries, description | One of wholly-owned subsidiaries of ABVC upon closing of the Mergers on February 8, 2019 |
LionGene Corporation (the “LionGene”) [Member] | |
Relationship with the Company and its subsidiaries, description | Shareholder of the Company; entity controlled by controlling beneficiary shareholder of YuanGene |
Related Parties Transactions _2
Related Parties Transactions (Details 1) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Other receivable - related parties total | $ 40,000 | |
BioFirst (Australia) [Member] | ||
Other receivable - related parties total | $ 40,000 |
Related Parties Transactions _3
Related Parties Transactions (Details 2) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Due to related parties | $ 4,462,775 | $ 4,229,320 |
BioLite, Inc., [Member] | ||
Due to related parties | 58,684 | 109,220 |
BioFirst Corporation [Member] | ||
Due to related parties | 4,151,301 | 3,957,000 |
AsianGene Corporation [Member] | ||
Due to related parties | 160,000 | 160,000 |
YuanGene Corporation [Member] | ||
Due to related parties | 92,690 | 3,000 |
Eugene Jiang [Member] | ||
Due to related parties | $ 100 | $ 100 |
Related Parties Transactions _4
Related Parties Transactions (Details Textual) - USD ($) | Oct. 02, 2018 | May 06, 2016 | Nov. 29, 2018 | Jun. 27, 2018 | Jan. 18, 2018 | Sep. 30, 2017 | Jul. 24, 2017 | Jan. 26, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Aug. 25, 2018 | May 09, 2018 | Sep. 25, 2017 |
Related Parties Transactions (Textual) | |||||||||||||
Amount received from BriVision | $ 4,462,775 | $ 4,229,320 | |||||||||||
Outstanding loan | 692,980 | 950,000 | |||||||||||
Accrued interest | 281 | 17,460 | |||||||||||
Interest expenses | 155,930 | 103,460 | |||||||||||
Common stock new issues | 80,000 | 5,850,000 | |||||||||||
Additional paid-in capital | 13,914,556 | 13,805,936 | |||||||||||
Rent expenses | 0 | 52,205 | |||||||||||
Related party transactions, description | Pursuant to the Investment and Equity Transfer Agreement, Everfront agreed to purchase 2,000,000 common shares of the Company owned by AsianGene at $1.60 per share in a total amount of $3,200,000, of which $160,000 is due before September 15, 2017 and the remaining amount of $3,040,000 is due before December 15, 2017. AsianGene also agreed to loan the proceeds to the Company for working capital purpose. | ||||||||||||
Unsecured convertible promissory note [Member] | |||||||||||||
Related Parties Transactions (Textual) | |||||||||||||
Accrued interest | 27,467 | ||||||||||||
Aggregate principal amount | $ 250,000 | $ 250,000 | $ 300,000 | ||||||||||
Chairman [Member] | |||||||||||||
Related Parties Transactions (Textual) | |||||||||||||
Aggregate working capital | $ 100 | $ 100 | |||||||||||
Interest rate percentage | 0.00% | 0.00% | |||||||||||
Collaborative Arrangement [Member] | |||||||||||||
Related Parties Transactions (Textual) | |||||||||||||
Amount received from BriVision | $ 100,000,000 | ||||||||||||
Common stock new issues | $ 900,000 | $ 3,000,000 | |||||||||||
Due to BioFirst | $ 3,000,000 | ||||||||||||
Yuangene Corporation [Member] | |||||||||||||
Related Parties Transactions (Textual) | |||||||||||||
Amount received from BriVision | 92,690 | $ 3,000 | |||||||||||
Outstanding loan | 50,000 | 0 | |||||||||||
Accrued interest | 5,721 | 0 | |||||||||||
Interest expenses | 5,721 | 0 | |||||||||||
Aggregate working capital | $ 50,000 | $ 42,690 | $ 3,000 | ||||||||||
Interest rate percentage | 0.00% | 0.00% | |||||||||||
Additional paid-in capital | $ 70,000 | ||||||||||||
Related party transactions, description | Under the terms of the loan agreement, the loan bears interest at 1% per month (or equivalent to 12% per annum) and the Company is required to pay interest monthly to the lender. The maturity date of this loan is January 19, 2019. | ||||||||||||
Loan Agreement [Member] | |||||||||||||
Related Parties Transactions (Textual) | |||||||||||||
Total commitment | $ 950,000 | ||||||||||||
Loan maturity date | Feb. 1, 2018 | ||||||||||||
Loan agreement, description | The loan agreement, the loan bears interest at 1% per month (or equivalent to 12% per annum) and the Company is required to pay interest monthly to the lender. | ||||||||||||
Asiangene Corporation [Member] | |||||||||||||
Related Parties Transactions (Textual) | |||||||||||||
Amount received from BriVision | $ 160,000 | $ 160,000 | |||||||||||
Outstanding loan | 160,000 | 160,000 | |||||||||||
Accrued interest | 12,866 | 0 | |||||||||||
Interest expenses | 18,411 | 0 | |||||||||||
BioLite [Member] | |||||||||||||
Related Parties Transactions (Textual) | |||||||||||||
Interest expenses | 306,821 | ||||||||||||
Aggregate working capital | $ 58,684 | $ 1,092,220 | |||||||||||
Interest rate percentage | 0.00% | 0.00% | |||||||||||
Additional paid-in capital | $ 10,862,995 | ||||||||||||
BioFirst Corporation [Member] | |||||||||||||
Related Parties Transactions (Textual) | |||||||||||||
Amount received from BriVision | 4,151,301 | $ 3,957,000 | |||||||||||
Interest expenses | 104,331 | 103,460 | |||||||||||
Aggregate working capital | $ 458,321 | $ 7,000 | |||||||||||
Interest rate percentage | 0.00% | 0.00% | |||||||||||
Keypoint Technology Ltd [Member] | Unsecured convertible promissory note [Member] | |||||||||||||
Related Parties Transactions (Textual) | |||||||||||||
Amount received from BriVision | $ 250,000 | ||||||||||||
Interest expenses | $ 10,222 | $ 0 | |||||||||||
Interest rate percentage | 8.00% | ||||||||||||
Yoshinobu Odaira [Member] | Unsecured convertible promissory note [Member] | |||||||||||||
Related Parties Transactions (Textual) | |||||||||||||
Amount received from BriVision | $ 250,000 | ||||||||||||
Interest expenses | 1,778 | 0 | |||||||||||
Interest rate percentage | 8.00% | ||||||||||||
Kimho Consultants Co., Ltd [Member] | |||||||||||||
Related Parties Transactions (Textual) | |||||||||||||
Stock based compensation expenses | 0 | 90,000 | |||||||||||
Euro-Asia Agreement [Member] | |||||||||||||
Related Parties Transactions (Textual) | |||||||||||||
Stock based compensation expenses | 0 | 60,000 | |||||||||||
LionGene Corporation [Member] | |||||||||||||
Related Parties Transactions (Textual) | |||||||||||||
One-time consulting service | 70,000 | ||||||||||||
BioKey [Member] | |||||||||||||
Related Parties Transactions (Textual) | |||||||||||||
Interest expenses | |||||||||||||
Additional paid-in capital | 82,265 | ||||||||||||
Monthly base rent | $ 800 | ||||||||||||
Rent expenses | $ 2,400 | $ 0 |
Equity (Details)
Equity (Details) - USD ($) | May 06, 2016 | Mar. 21, 2016 | Feb. 08, 2016 | Dec. 29, 2015 | Sep. 30, 2017 | Jul. 24, 2017 | May 26, 2017 | Feb. 28, 2017 | Oct. 02, 2016 | Aug. 26, 2016 | Mar. 31, 2016 | Feb. 17, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 28, 2018 | Oct. 30, 2015 |
Equity (Textual) | ||||||||||||||||
Common stock, authorized | 360,000,000 | 360,000,000 | ||||||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | ||||||||||||||
Description of forward split | 1 to 3.141 | |||||||||||||||
Subscription receivable | $ 350,000 | |||||||||||||||
Issuance of common shares | $ 80,000 | $ 5,850,000 | ||||||||||||||
Due to related parties | $ 4,462,775 | $ 4,229,320 | ||||||||||||||
Common stock, shares issued | 213,926,475 | 213,746,647 | ||||||||||||||
Common stock, shares issued total | 80,000 | |||||||||||||||
Kimho Consultants Co., Ltd [Member] | ||||||||||||||||
Equity (Textual) | ||||||||||||||||
Common stock, par value | $ 1.60 | |||||||||||||||
Common stock, shares issued | 75,000 | |||||||||||||||
Common stock, shares issued total | 120,000 | |||||||||||||||
BioLite, Inc., [Member] | ||||||||||||||||
Equity (Textual) | ||||||||||||||||
Common stock, par value | $ 0.001 | |||||||||||||||
Issuance of common shares | $ 1,468,750 | |||||||||||||||
Purchase price per share | $ 1.60 | |||||||||||||||
Net proceeds from offering | $ 2,350,000 | |||||||||||||||
2016 Equity Incentive Plan [Member] | ||||||||||||||||
Equity (Textual) | ||||||||||||||||
Common stock issued pre-stock split | 50,000 | |||||||||||||||
Common stock issued post-stock split | 157,050 | |||||||||||||||
Collaborative Arrangement [Member] | ||||||||||||||||
Equity (Textual) | ||||||||||||||||
Issuance of common shares | $ 900,000 | $ 3,000,000 | ||||||||||||||
Issuance of common shares, shares | 562,500 | |||||||||||||||
Share price | $ 1.60 | $ 2 | ||||||||||||||
Due to related parties | $ 100,000,000 | |||||||||||||||
Total payment upon first IND submission | $ 15,000,000 | |||||||||||||||
Percentage of payments under collaborative agreement | 3.50% | 50.00% | 15.00% | |||||||||||||
Consulting agreement, description | The Company agreed to indemnify the consultant in an amount of $150 per hour in cash up to $3,000 per month, and issue to Kameyama the Company's Common Stock at $1.00 per share for any amount exceeding $3,000. | |||||||||||||||
Share Exchange Agreement [Member] | ||||||||||||||||
Equity (Textual) | ||||||||||||||||
Common stock issued pre-stock split | 52,336,000 | |||||||||||||||
Common stock issued post-stock split | 164,387,376 | |||||||||||||||
Share Exchange Agreement One [Member] | ||||||||||||||||
Equity (Textual) | ||||||||||||||||
Common stock issued pre-stock split | 52,936,583 | |||||||||||||||
Common stock issued post-stock split | 166,273,921 | |||||||||||||||
Share Exchange Agreement Two [Member] | ||||||||||||||||
Equity (Textual) | ||||||||||||||||
Common stock issued pre-stock split | 51,945,225 | |||||||||||||||
Common stock issued post-stock split | 163,159,952 | |||||||||||||||
Percentage of common shares issued and outstanding | 79.70% | |||||||||||||||
Percentage of issued share capital | 100.00% | |||||||||||||||
Share Exchange Agreement Three [Member] | ||||||||||||||||
Equity (Textual) | ||||||||||||||||
Common stock issued pre-stock split | 52,936,583 | |||||||||||||||
Common stock issued post-stock split | 166,273,921 | |||||||||||||||
Exchange ratio | 0.2536-for-1 | |||||||||||||||
Share Exchange Agreement Four [Member] | ||||||||||||||||
Equity (Textual) | ||||||||||||||||
Common stock issued pre-stock split | 65,431,144 | |||||||||||||||
Common stock issued post-stock split | 205,519,223 | |||||||||||||||
Percentage of common shares issued and outstanding | 79.70% | |||||||||||||||
Co-Dev Agreement [Member] | ||||||||||||||||
Equity (Textual) | ||||||||||||||||
Company cash payments | $ 3,000,000 | $ 3,000,000 | ||||||||||||||
Due to related parties | $ 3,000,000 | |||||||||||||||
Percentage of payments under collaborative agreement | 50.00% | |||||||||||||||
Collaborative Arrangement One [Member] | ||||||||||||||||
Equity (Textual) | ||||||||||||||||
Issuance of common shares | $ 5,850,000 | |||||||||||||||
Issuance of common shares, shares | 2,925,000 | |||||||||||||||
Share price | $ 2 | |||||||||||||||
Due to related parties | $ 100,000,000 | |||||||||||||||
Total payment upon first IND submission | $ 6,500,000 | |||||||||||||||
Percentage of payments under collaborative agreement | 6.50% | |||||||||||||||
Remitted amount | $ 650,000 | |||||||||||||||
Euro-Asia Investment & Finance Corp Ltd. [Member] | ||||||||||||||||
Equity (Textual) | ||||||||||||||||
Common stock, par value | $ 1.60 | |||||||||||||||
Common stock, shares issued | 50,000 | |||||||||||||||
Common stock, shares issued total | 80,000 | |||||||||||||||
Consulting Agreement [Member] | ||||||||||||||||
Equity (Textual) | ||||||||||||||||
Common stock, par value | $ 1.60 | |||||||||||||||
Stock based compensation expenses | $ 28,800 | $ 5,400 | ||||||||||||||
Common stock, shares issued | 4,828 | |||||||||||||||
Common stock, shares issued total | 7,725 | |||||||||||||||
Euro-Asia Agreement [Member] | ||||||||||||||||
Equity (Textual) | ||||||||||||||||
Stock based compensation expenses | 0 | 60,000 | ||||||||||||||
Kimho Agreement [Member] | ||||||||||||||||
Equity (Textual) | ||||||||||||||||
Stock based compensation expenses | $ 0 | $ 90,000 |
Income Tax (Details)
Income Tax (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Federal | ||
Current | ||
Deferred | ||
Federal Total | ||
State | ||
Current | 1,850 | 830 |
Deferred | ||
State total | 1,850 | 830 |
Current total | 1,850 | 830 |
Deferred total | ||
Total | $ 1,850 | $ 830 |
Income Tax (Details 1)
Income Tax (Details 1) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Tax Account - noncurrent: | ||
Tax losses carryforwards | $ 913,954 | $ 594,501 |
Less: Valuation allowance | (913,954) | (594,501) |
Total deferred tax account - noncurrent |
Income Tax (Details 2)
Income Tax (Details 2) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal tax benefit, net of state tax effects | 19.00% | 31.00% |
State income taxes | 8.84% | 8.84% |
Provisional remeasurement of deferred taxes | (13.00%) | |
Nondeductible/nontaxable items | (1.00%) | (4.00%) |
Change in valuation allowance | (26.84%) | (22.84%) |
Effective income tax rate | 0.00% | 0.00% |
Income Tax (Details Textual)
Income Tax (Details Textual) | 1 Months Ended |
Dec. 22, 2017 | |
Income Tax (Textual) | |
Corporate tax rate, description | Among the significant changes to the U.S. Internal Revenue Code, the Tax Act lowers the U.S. federal corporate income tax rate ("Federal Tax Rate") from 35% to 21% effective January 1, 2018. The 21% Federal Tax Rate will apply to earnings reported for the full 2018 fiscal year. In addition, the Company must re-measure its net deferred tax assets and liabilities using the Federal Tax Rate that will apply when these amounts are expected to reverse. As of December 31, 2017, the Company can determine a reasonable estimate for certain effects of tax reform and recorded that estimate as a provisional amount. The provisional remeasurement of the deferred tax assets and allowance valuation of deferred tax assets at December 31, 2017 resulted in a net effect of $0 discrete tax expenses (benefit) which lowered the effective tax rate by 14% for the year ended December 31, 2017. |
Loss per Share (Details)
Loss per Share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Numerator: | ||
Net loss | $ (4,101,303) | $ (4,242,860) |
Weighted-average shares outstanding: | ||
Weighted-average shares outstanding - Basic | 213,884,105 | 213,321,921 |
Stock options | ||
Weighted-average shares outstanding - Diluted | 213,884,105 | 213,321,921 |
Loss per share | ||
-Basic | $ (0.02) | $ (0.02) |
-Diluted | $ (0.02) | $ (0.02) |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Commitments and Contingencies (Textual) | ||
Rental expense | $ 7,497 | $ 49,245 |
Pro Forma Financial Statement_2
Pro Forma Financial Statements (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Current Assets | |||
Cash and cash equivalents | $ 40,044 | $ 93,332 | $ 18,645 |
Accounts receivable - related parties, net | 40,000 | ||
Due from related parties | 2,550,000 | ||
Total Current Assets | 96,273 | 2,643,332 | |
Deferred tax assets | 913,954 | 594,501 | |
Total Assets | 96,273 | 2,643,332 | |
Current Liabilities | |||
Convertible notes payable | 300,000 | ||
Convertible notes payable - related parties | 250,000 | ||
Total Current Liabilities | 5,568,224 | 4,400,247 | |
Convertible notes payable - related parties | 250,000 | ||
Total Liabilities | 5,845,691 | 4,400,247 | |
Equity | |||
Common stock | 213,927 | 213,747 | |
Additional paid-in capital | 13,914,556 | 13,805,936 | |
Accumulated deficit | (19,877,901) | (15,776,598) | |
Total Stockholders’ deficit | (5,749,418) | (1,756,915) | $ (6,519,455) |
Total Liabilities and Equity | 96,273 | $ 2,643,332 | |
Pro Forma Adjustment [Member] | |||
Current Assets | |||
Cash and cash equivalents | |||
Restricted cash and cash equivalents | |||
Accounts receivable, net | |||
Accounts receivable - related parties, net | |||
Other receivable | |||
Due from related parties | (59,810) | ||
Inventory | |||
Prepaid expense and other current assets | |||
Total Current Assets | (59,810) | ||
Goodwill, net | 43,531,445 | ||
Total Assets | 43,471,635 | ||
Current Liabilities | |||
Short-term bank loan | |||
Long-term bank loan - current portion | |||
Notes payable | |||
Accrued expenses and other current liabilities | |||
Due to related parties | (58,684) | ||
Total Current Liabilities | (58,684) | ||
Long-term bank loan | |||
Tenant security deposit | |||
Convertible notes payable | |||
Convertible notes payable - related parties | |||
Accrued interest | |||
Total Liabilities | (58,684) | ||
Equity | |||
Preferred stock | (18,633,097) | ||
Common stock | (4,121) | ||
Common stock to be issued | 74,998 | ||
Common stock to be issued | (771,793) | ||
Common stock to be issued | 7,428 | ||
Common stock to be issued | 22,133 | ||
Additional paid-in capital | (70,877) | ||
Additional paid-in capital | (82,265) | ||
Additional paid-in capital | 44,312,285 | ||
Additional paid-in capital | (10,000,000) | ||
Stock subscription receivable | 1,667 | ||
Accumulated deficit | 18,677,586 | ||
Accumulated deficit | 6,817,848 | ||
Accumulated deficit | 2,295,716 | ||
Accumulated deficit | 10,000,000 | ||
Other comprehensive income | (14,689) | ||
Treasury stock | (6,750,000) | ||
Treasury shares outstanding | (2,350,000) | ||
Total Stockholders’ deficit | 43,530,319 | ||
Noncontrolling interest | |||
Total Equity | 43,530,319 | ||
Total Liabilities and Equity | 43,471,635 | ||
Pro Forma [Member] | |||
Current Assets | |||
Cash and cash equivalents | 863,354 | ||
Restricted cash and cash equivalents | 16,093 | ||
Accounts receivable, net | 43,204 | ||
Accounts receivable - related parties, net | 147,848 | ||
Other receivable | 39,005 | ||
Due from related parties | 59,477 | ||
Inventory | 1,318 | ||
Prepaid expense and other current assets | 223,895 | ||
Total Current Assets | 1,394,194 | ||
Property and equipment, net | 568,216 | ||
Goodwill, net | 43,531,445 | ||
Long-term investments | 3,448,169 | ||
Deferred tax assets | 1,347,995 | ||
Security Deposits | 37,858 | ||
Total Assets | 50,367,877 | ||
Current Liabilities | |||
Short-term bank loan | 899,250 | ||
Long-term bank loan - current portion | 39,835 | ||
Notes payable | 510,447 | ||
Accrued expenses and other current liabilities | 1,326,184 | ||
Due to related parties | 7,745,096 | ||
Convertible notes payable | 300,000 | ||
Convertible notes payable - related parties | 250,000 | ||
Total Current Liabilities | 11,070,812 | ||
Long-term bank loan | 15,257 | ||
Tenant security deposit | 2,880 | ||
Convertible notes payable | |||
Convertible notes payable - related parties | 250,000 | ||
Accrued interest | 27,467 | ||
Total Liabilities | 11,366,416 | ||
Equity | |||
Preferred stock | |||
Common stock | 318,486 | ||
Additional paid-in capital | 59,018,959 | ||
Accumulated deficit | (12,209,446) | ||
Other comprehensive income | 655,852 | ||
Treasury stock | (9,100,000) | ||
Total Stockholders’ deficit | 38,683,851 | ||
Noncontrolling interest | 317,610 | ||
Total Equity | 39,001,461 | ||
Total Liabilities and Equity | 50,367,877 | ||
ABVC [Member] | |||
Current Assets | |||
Cash and cash equivalents | 40,044 | ||
Restricted cash and cash equivalents | 16,093 | ||
Accounts receivable, net | |||
Accounts receivable - related parties, net | |||
Other receivable | |||
Due from related parties | 40,000 | ||
Inventory | |||
Prepaid expense and other current assets | 136 | ||
Total Current Assets | 96,273 | ||
Property and equipment, net | |||
Goodwill, net | |||
Long-term investments | |||
Deferred tax assets | |||
Security Deposits | |||
Total Assets | 96,273 | ||
Current Liabilities | |||
Short-term bank loan | |||
Long-term bank loan - current portion | |||
Notes payable | |||
Accrued expenses and other current liabilities | 555,449 | ||
Due to related parties | 4,462,775 | ||
Convertible notes payable | 300,000 | ||
Convertible notes payable - related parties | 250,000 | ||
Total Current Liabilities | 5,568,224 | ||
Long-term bank loan | |||
Tenant security deposit | |||
Convertible notes payable | |||
Convertible notes payable - related parties | 250,000 | ||
Accrued interest | 27,467 | ||
Total Liabilities | 5,845,691 | ||
Equity | |||
Preferred stock | |||
Common stock | 213,927 | ||
Additional paid-in capital | 13,914,556 | ||
Accumulated deficit | (19,877,901) | ||
Other comprehensive income | |||
Treasury stock | |||
Total Stockholders’ deficit | (5,749,418) | ||
Noncontrolling interest | |||
Total Equity | (5,749,418) | ||
Total Liabilities and Equity | 96,273 | ||
BioKey [Member] | |||
Current Assets | |||
Cash and cash equivalents | 636,666 | ||
Restricted cash and cash equivalents | |||
Accounts receivable, net | 43,204 | ||
Accounts receivable - related parties, net | 147,848 | ||
Other receivable | |||
Due from related parties | |||
Inventory | |||
Prepaid expense and other current assets | |||
Total Current Assets | 827,718 | ||
Property and equipment, net | 58,150 | ||
Goodwill, net | |||
Long-term investments | |||
Deferred tax assets | |||
Security Deposits | 10,440 | ||
Total Assets | 896,308 | ||
Current Liabilities | |||
Short-term bank loan | |||
Long-term bank loan - current portion | |||
Notes payable | |||
Accrued expenses and other current liabilities | 83,026 | ||
Due to related parties | |||
Convertible notes payable | |||
Convertible notes payable - related parties | |||
Total Current Liabilities | 83,026 | ||
Long-term bank loan | |||
Tenant security deposit | 2,880 | ||
Convertible notes payable | |||
Convertible notes payable - related parties | |||
Accrued interest | |||
Total Liabilities | 85,906 | ||
Equity | |||
Preferred stock | 18,633,097 | ||
Common stock | 774,293 | ||
Additional paid-in capital | 82,265 | ||
Stock subscription receivable | (1,667) | ||
Accumulated deficit | (18,677,586) | ||
Other comprehensive income | |||
Treasury stock | |||
Total Stockholders’ deficit | 810,402 | ||
Noncontrolling interest | |||
Total Equity | 810,402 | ||
Total Liabilities and Equity | 896,308 | ||
BioLite [Member] | |||
Current Assets | |||
Cash and cash equivalents | 186,644 | ||
Restricted cash and cash equivalents | |||
Accounts receivable, net | |||
Accounts receivable - related parties, net | |||
Other receivable | 39,005 | ||
Due from related parties | 79,287 | ||
Inventory | 1,318 | ||
Prepaid expense and other current assets | 223,759 | ||
Total Current Assets | 530,013 | ||
Property and equipment, net | 510,066 | ||
Goodwill, net | |||
Long-term investments | 3,488,169 | ||
Deferred tax assets | 1,347,995 | ||
Security Deposits | 27,418 | ||
Total Assets | 5,903,661 | ||
Current Liabilities | |||
Short-term bank loan | 899,250 | ||
Long-term bank loan - current portion | 39,835 | ||
Notes payable | 510,447 | ||
Accrued expenses and other current liabilities | 687,709 | ||
Due to related parties | 3,341,005 | ||
Convertible notes payable | |||
Convertible notes payable - related parties | |||
Total Current Liabilities | 5,478,246 | ||
Long-term bank loan | 15,257 | ||
Tenant security deposit | |||
Convertible notes payable | |||
Convertible notes payable - related parties | |||
Accrued interest | |||
Total Liabilities | 5,493,503 | ||
Equity | |||
Preferred stock | |||
Common stock | 4,121 | ||
Additional paid-in capital | 10,862,995 | ||
Accumulated deficit | (11,445,109) | ||
Other comprehensive income | 670,541 | ||
Treasury stock | |||
Total Stockholders’ deficit | 92,548 | ||
Noncontrolling interest | 317,610 | ||
Total Equity | 410,158 | ||
Total Liabilities and Equity | $ 5,903,661 |
Pro Forma Financial Statement_3
Pro Forma Financial Statements (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | ||
Cost of revenues | ||
Gross profit | ||
Operating expenses | ||
Selling, general and administrative expenses | 695,148 | 811,685 |
Research and development expenses | 669,668 | 3,171,665 |
Stock based compensation | 28,800 | 155,400 |
Total operating expenses | 1,393,616 | 4,138,750 |
Loss from operations | (1,393,616) | (4,138,750) |
Other income (expense) | ||
Interest income | 93 | 180 |
Interest Expense | (155,930) | (103,460) |
Investment loss | (549) | |
Total other income (expenses) | (2,705,837) | (103,280) |
Loss before provision for income tax | (4,099,453) | (4,242,030) |
Provision for income tax (benefit) | 1,850 | 830 |
Net loss attributable to ABVC and subsidiaries | $ (4,101,303) | $ (4,242,860) |
Net loss per share attributable to common stockholders | ||
Basic and diluted | $ (0.02) | $ (0.02) |
Weighted average number of common shares outstanding | ||
Basic and diluted | 213,884,105 | 213,321,921 |
Pro Forma Adjustment [Member] | ||
Revenues | ||
Cost of revenues | ||
Gross profit | ||
Operating expenses | ||
Selling, general and administrative expenses | ||
Research and development expenses | ||
Stock based compensation | ||
Total operating expenses | ||
Other income (expense) | ||
Interest income | ||
Interest Expense | ||
Rental income | ||
Impairment loss | ||
Investment loss | ||
Gain/Loss on foreign exchange changes | ||
Gain/Loss on investment in equity securities | ||
Other income (expense) | ||
Total other income (expenses) | ||
Loss before provision for income tax | ||
Provision for income tax (benefit) | ||
Net loss | ||
Net loss attributable to noncontrolling interests | ||
Net loss attributable to ABVC and subsidiaries | ||
Foreign currency translation adjustment | ||
Comprehensive Income (Loss) | ||
Net loss per share attributable to common stockholders | ||
Basic and diluted | ||
Weighted average number of common shares outstanding | ||
Basic and diluted | ||
Pro Forma Combined [Member] | ||
Revenues | $ 517,153 | |
Cost of revenues | 190,089 | |
Gross profit | 327,064 | |
Operating expenses | ||
Selling, general and administrative expenses | 2,258,040 | |
Research and development expenses | 1,419,638 | |
Stock based compensation | 28,800 | |
Total operating expenses | 3,706,478 | |
Loss from operations | (3,379,414) | |
Other income (expense) | ||
Interest income | 9,810 | |
Interest Expense | (462,751) | |
Rental income | 11,924 | |
Impairment loss | (63,663) | |
Investment loss | (396,025) | |
Gain/Loss on foreign exchange changes | 7,307 | |
Gain/Loss on investment in equity securities | (2,741,914) | |
Other income (expense) | (4,524) | |
Total other income (expenses) | (3,639,836) | |
Loss before provision for income tax | (7,019,250) | |
Provision for income tax (benefit) | (364,297) | |
Net loss | (6,654,953) | |
Net loss attributable to noncontrolling interests | 489,151 | |
Net loss attributable to ABVC and subsidiaries | (7,144,104) | |
Foreign currency translation adjustment | 86,786 | |
Comprehensive Income (Loss) | $ (7,230,890) | |
Net loss per share attributable to common stockholders | ||
Basic and diluted | $ (0.03) | |
Weighted average number of common shares outstanding | ||
Basic and diluted | 214,156,988 | |
ABVC [Member] | ||
Revenues | ||
Cost of revenues | ||
Gross profit | ||
Operating expenses | ||
Selling, general and administrative expenses | 695,148 | |
Research and development expenses | 669,668 | |
Stock based compensation | 28,800 | |
Total operating expenses | 1,393,616 | |
Loss from operations | (1,393,616) | |
Other income (expense) | ||
Interest income | 93 | |
Interest Expense | (155,930) | |
Rental income | ||
Impairment loss | ||
Investment loss | (549) | |
Gain/Loss on foreign exchange changes | ||
Gain/Loss on investment in equity securities | (2,549,451) | |
Other income (expense) | ||
Total other income (expenses) | (2,705,837) | |
Loss before provision for income tax | (4,099,453) | |
Provision for income tax (benefit) | 1,850 | |
Net loss | (4,101,303) | |
Net loss attributable to noncontrolling interests | ||
Net loss attributable to ABVC and subsidiaries | (4,101,303) | |
Foreign currency translation adjustment | ||
Comprehensive Income (Loss) | $ (4,101,303) | |
Net loss per share attributable to common stockholders | ||
Basic and diluted | $ (0.02) | |
Weighted average number of common shares outstanding | ||
Basic and diluted | 213,884,105 | |
BioKey [Member] | ||
Revenues | $ 510,197 | |
Cost of revenues | 4,809 | |
Gross profit | 505,388 | |
Operating expenses | ||
Selling, general and administrative expenses | 669,322 | |
Research and development expenses | 430,917 | |
Stock based compensation | ||
Total operating expenses | 1,100,239 | |
Loss from operations | (594,851) | |
Other income (expense) | ||
Interest income | 4,598 | |
Interest Expense | ||
Rental income | ||
Impairment loss | ||
Investment loss | ||
Gain/Loss on foreign exchange changes | ||
Gain/Loss on investment in equity securities | ||
Other income (expense) | 630 | |
Total other income (expenses) | 5,228 | |
Loss before provision for income tax | (589,623) | |
Provision for income tax (benefit) | 800 | |
Net loss | (590,423) | |
Net loss attributable to noncontrolling interests | ||
Net loss attributable to ABVC and subsidiaries | (590,423) | |
Foreign currency translation adjustment | ||
Comprehensive Income (Loss) | $ (590,423) | |
Net loss per share attributable to common stockholders | ||
Basic and diluted | ||
Weighted average number of common shares outstanding | ||
Basic and diluted | ||
BioLite [Member] | ||
Revenues | $ 6,956 | |
Cost of revenues | 185,280 | |
Gross profit | (178,324) | |
Operating expenses | ||
Selling, general and administrative expenses | 893,570 | |
Research and development expenses | 319,053 | |
Stock based compensation | ||
Total operating expenses | 1,212,623 | |
Loss from operations | (1,390,947) | |
Other income (expense) | ||
Interest income | 5,119 | |
Interest Expense | (306,821) | |
Rental income | 11,924 | |
Impairment loss | (63,663) | |
Investment loss | (395,476) | |
Gain/Loss on foreign exchange changes | 7,307 | |
Gain/Loss on investment in equity securities | (192,463) | |
Other income (expense) | (5,154) | |
Total other income (expenses) | (939,227) | |
Loss before provision for income tax | (2,330,174) | |
Provision for income tax (benefit) | (366,947) | |
Net loss | (1,963,227) | |
Net loss attributable to noncontrolling interests | 489,151 | |
Net loss attributable to ABVC and subsidiaries | (1,474,067) | |
Foreign currency translation adjustment | 86,786 | |
Comprehensive Income (Loss) | $ (1,560,862) | |
Net loss per share attributable to common stockholders | ||
Basic and diluted | ||
Weighted average number of common shares outstanding | ||
Basic and diluted |
Pro Forma Financial Statement_4
Pro Forma Financial Statements (Details 2) | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
BioLite [Member] | |
Outstanding shares as of December 31, 2018 | 41,207,444 |
Exchange of each BioLite share of common stock outstanding as of December 31, 2018, for 1.82 shares of ABVC common stock | $ / shares | $ 1.82 |
ABVC common stock to be issued to BioLite as a result of the Merger | 74,997,548 |
Par value $0.001 per share of ABVC | $ | $ 74,998 |
BioKey [Member] | |
Outstanding shares as of December 31, 2018 | 7,428,134 |
Exchange of each BioLite share of common stock outstanding as of December 31, 2018, for 1.82 shares of ABVC common stock | $ / shares | $ 1 |
ABVC common stock to be issued to BioKey as a result of the Merger | 7,428,134 |
Par value $0.001 per share of ABVC | $ | $ 7,428 |
Pro Forma Financial Statement_5
Pro Forma Financial Statements (Details 3) - BioKey [Member] | Dec. 31, 2018USD ($)shares |
BioKey’s total shares of preferred stock outstanding as of December 31, 2018 | 22,133,097 |
Exchange of each BioKey share of preferred stock outstanding as of December 31, 2018, for one share of ABVC common stock | 1 |
ABVC common stock to be issued to BioKey as a result of the Merger | 22,133,097 |
Par value $0.001 per share of ABVC | $ | $ 22,133 |
Series A [Member] | |
BioKey’s total shares of preferred stock outstanding as of December 31, 2018 | 7,000,000 |
Series B [Member] | |
BioKey’s total shares of preferred stock outstanding as of December 31, 2018 | 1,160,000 |
Series C [Member] | |
BioKey’s total shares of preferred stock outstanding as of December 31, 2018 | 13,973,097 |
Pro Forma Financial Statement_6
Pro Forma Financial Statements (Details 4) - shares | Dec. 31, 2018 | Dec. 31, 2017 |
Total common stock of the combined company outstanding following the Merger | 213,926,475 | 213,746,647 |
Merger [Member] | ||
ABVC common stock issued as of December 31, 2018 | 213,926,475 | |
ABVC common stock held by BioLite pursuant to the BioLite Collaborative Agreement (see Note {g}) | (3,487,500) | |
ABVC common stock held by BioLite for cash issuance (see Note {h}) | (1,468,750) | |
ABVC common stock to be issued to BioLite as a result of the Merger | 74,997,548 | |
ABVC common stock to be issued to BioKey as a result of the Merger | 29,561,231 | |
Total common stock of the combined company outstanding following the Merger | 313,529,004 |
Pro Forma Financial Statement_7
Pro Forma Financial Statements (Details 5) | 12 Months Ended | |
Dec. 31, 2018USD ($) | ||
Purchase consideration: | ||
Common stock | $ 44,341,847 | [1] |
Estimated Fair Value of Assets Acquired: | ||
Cash and cash equivalents | 636,666 | |
Accounts receivable | 43,204 | |
Accounts receivable - related parties | 147,848 | |
Property and equipment | 58,150 | |
Security deposits | 10,440 | |
Total assets acquired | 896,308 | |
Estimated Fair Value of Liabilities Assumed: | ||
Due to shareholders | ||
Accrued expenses and other current liabilities | 83,026 | |
Tenant security deposit | 2,880 | |
Total liabilities assumed | 85,906 | |
Total net assets acquired | 810,402 | |
Goodwill as a result of the Merger | $ 43,531,445 | |
[1] | 29,561,231 shares of ABVC common stock to be issued to BioKey in connection with the Merger. Those shares were valued at $1.50 per share, the closing share price of ABVC on February 5, 2019. |
Pro Forma Financial Statement_8
Pro Forma Financial Statements (Details Textual) - USD ($) | May 06, 2016 | Dec. 29, 2015 | Jul. 24, 2017 | Feb. 28, 2017 | Aug. 26, 2016 | Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 |
Pro Forma Adjustments (Textual) | ||||||||
Common stock newly issued, value | $ 80,000 | $ 5,850,000 | ||||||
Fully expense entire amount | 10,000,000 | |||||||
Aggregate amount | $ 10,000,000 | |||||||
Common stock, par value | $ 0.001 | $ 0.001 | ||||||
ABVC [Member] | ||||||||
Pro Forma Adjustments (Textual) | ||||||||
Due from related parties | $ 59,810 | |||||||
Due to related parties | $ 58,684 | |||||||
Common stock newly issued, shares | 29,561,231 | |||||||
Closing share price | $ 1.50 | |||||||
BioLite, Inc., [Member] | ||||||||
Pro Forma Adjustments (Textual) | ||||||||
Common stock newly issued, value | $ 1,468,750 | |||||||
Net proceeds from offering | $ 2,350,000 | |||||||
Common stock, par value | $ 0.001 | |||||||
Purchase price per share | $ 1.60 | |||||||
Collaborative Arrangement [Member] | ||||||||
Pro Forma Adjustments (Textual) | ||||||||
Amount received from BriVision | $ 100,000,000 | $ 3,000,000 | ||||||
Description of payment settlement | Upfront payment shall upon the signing of this BioLite Collaborative Agreement: 3.5% of total payment. After receiving upfront payment from BriVision, BioLite has to deliver all data to BriVision in one week. Upon the first IND submission, BriVision shall pay, but no later than December 15, 2016: 6.5% of total payment. After receiving second payment from BriVision, BioLite has to deliver IND package to BriVision in one week. At the completion of first phase II clinical trial, BriVision shall pay, but no later than September 15, 2017: 15% of total payment. After receiving third payment from BriVision, BioLite has to deliver phase II clinical study report to BriVision in three months. Upon the phase III IND submission, BriVision shall pay, but no later than December 15, 2018: 20% of total payment. After receiving forth payment from BriVision, BioLite has to deliver IND package to BriVision in one week. At the completion of phase III, BriVision shall pay, but no later than September 15, 2019:25% of total payment. After receiving fifth payment from BriVision, BioLite has to deliver phase III clinical study report to BriVision in three months. Upon the NDA submission, BriVision shall pay, but no later than December 15, 2020, BriVision shall pay: 30% of total payment. After receiving sixth payment from BriVision, BioLite has to deliver NDA package to BriVision in one week. | |||||||
Agreement, terms | This BioLite Collaborative Agreement shall, once signed by both Parties, remain in effect for fifteen years as of the first commercial sales of the Product in the Territory and automatically renew for five more years unless either party gives the other party six month written notice of termination prior to the expiration date of the term. | |||||||
Upfront payments | $ 3,500,000 | |||||||
Percentage of payments under collaborative agreement | 3.50% | 50.00% | 15.00% | |||||
Milestone payments to BioLite in cash | $ 2,600,000 | |||||||
Common stock newly issued, value | $ 900,000 | $ 3,000,000 | ||||||
Common stock newly issued, shares | 562,500 | |||||||
Share price | $ 1.60 | $ 2 | ||||||
Accounts payable | $ 15,000,000 | |||||||
Collaborative Arrangement One [Member] | ||||||||
Pro Forma Adjustments (Textual) | ||||||||
Percentage of payments under collaborative agreement | 6.50% | |||||||
Milestone payments to BioLite in cash | $ 650,000 | |||||||
Common stock newly issued, value | $ 5,850,000 | |||||||
Common stock newly issued, shares | 2,925,000 | |||||||
Share price | $ 2 | |||||||
Accounts payable | $ 6,500,000 | |||||||
BioLite Collaborative Agreement [Member] | ||||||||
Pro Forma Adjustments (Textual) | ||||||||
Common stock newly issued, value | $ 6,750,000 | |||||||
Common stock newly issued, shares | 3,487,500 | |||||||
Investment loss recognized write-off amount | $ 4,313,725 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Jan. 08, 2019 | Jan. 21, 2019 |
Subsequent Event [Member] | Loan Agreement [Member] | ||
Subsequent Events (Textual) | ||
Exceeding amount | $ 500,000 | |
Cathay Bank [Member] | ||
Subsequent Events (Textual) | ||
Received loan amount | $ 500,000 | |
Principal amount | $ 1,000,000 | |
Cathay Bank [Member] | Subsequent Event [Member] | ||
Subsequent Events (Textual) | ||
Maturity date | Jan. 1, 2020 | |
Regular interest rate, description | The Note executed in connection with the Loan Agreement bears an interest rate (the "Regular Interest Rate") equal to the sum of one percent (1%) and the prime rate as published in the Wall Street Journal (the "Index") and the accrued interest shall become payable each month from February 1, 2019. Pursuant to the Note, the Company shall pay the entire outstanding principal plus accrued unpaid interest on the Maturity Date and may prepay portion or all of the Note before the Maturity Date without penalty. If the Company defaults on the Note, the default interest rate shall become five percent (5%) plus the Regular Interest Rate. |