ABVC Biopharma (ABVC) risk factors, FY2025 10-K

Risks Related to the Company’s Business

1. 01Unfavorable global economic conditions, including as a result of health and safety concerns, could adversely affect our business, financial condition or results of operations
2. 02The Company is a development stage biopharmaceutical company and is thus subject to the risks associated with new businesses in that industry
3. 03BioLite and BioKey are expected to continue to have limited revenue and remain unprofitable for an indefinite period of time
4. 04If the Company fails to raise additional capital, its ability to implement its business model and strategy could be compromised
5. 05The Company has no history in obtaining regulatory approval for, or commercializing, any new drug candidate
6. 06Our growth is dependent on our ability to successfully develop, acquire or license new drugs
7. 07We may be subject to product liability claims in the future, which could divert our resources, cause us to incur substantial liabilities and limit commercialization of any products that we may develop
8. 08We have conducted, and may in the future conduct, clinical trials for certain of our product candidates at sites outside the United States, and the FDA may not accept data from trials conducted in such locations
9. 09If clinical trials of our product candidates fail to demonstrate safety and efficacy to the satisfaction of the FDA and comparable non-U.S. regulators, we may incur additional costs or experience delays in completing, or ultimately be unable to complete the development and commercialization of our product candidates
10. 10Even if any of our product candidates receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third party payors and others in the medical community necessary for commercial success and the market opportunity for the product candidate may be smaller than we estimate
11. 11We may seek to enter into collaborations with third parties for the development and commercialization of our product candidates. If we fail to enter into such collaborations, or such collaborations are not successful, we may not be able to capitalize on the market potential of our product candidates
12. 12ABVC, through BioLite, may not be able to receive the full amounts available under the collaboration agreement by and between BioLite, Inc. and BioHopeKing, which could increase its burden to seek additional capital to fund the business operations
13. 13ABVC and its Subsidiaries may not be successful in establishing and maintaining additional strategic partnerships, which could adversely affect ABVC’s ability to develop and commercialize products, negatively impacting its operating results
14. 14ABVC’s licensors may choose to terminate any of the license agreements with ABVC. As a result, ABVC’s research and development of new drug candidates that contain the underlying API may be terminated abruptly
15. 15ABVC’s Subsidiary BioLite depends on one supplier for the API of ABV-1703, ABV-1519, ABV-1502 and ABV-1501 and any failure of such supplier to deliver sufficient quantities of the API that meets its quality standard could have a material adverse effect on its research of these four drug candidates
16. 16ABVC may use hazardous chemicals and biological materials in its business. Any claims relating to improper handling, storage or disposal of these materials could be time consuming and costly
17. 17The facilities where the samples of drug candidates are manufactured need to be maintained and monitored in compliance with the good manufacturing practice standards, the failure of such maintenance could contaminate the results of our clinical trials and adversely affect our operations
18. 18Cybersecurity incidents and decentralization of documents may hurt the company’s business, damage its reputation, increase its costs, and cause losses

Risks Related to Intellectual Property

1. 19Pharmaceutical patents and patent applications involve highly complex legal and factual questions, which, if determined adversely to the Company, could negatively impact its respective licensors’ patent position and interrupt its research activities
2. 20Developments in patent law could have a negative impact on the Company’s Licensors’ patent positions and the Company’s business
3. 21If the Company is unable to protect the confidentiality of its trade secrets, its business and competitive position would be harmed, respectively
4. 22Third parties may assert that the Company’s employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets
5. 23ABVC’s ability to compete may decline if it does not adequately protect its proprietary rights or if it is barred by the intellectual property rights of others
6. 24The Company and its respective licensors may not be able to enforce their intellectual property rights throughout the world
7. 25The Company is subject to various government regulations
8. 26The Company cannot be certain that it will be able to obtain regulatory approval for, or successfully commercialize, any of its current or future product candidates
9. 27These same risks apply to applicable foreign regulatory agencies from which the Company, through BioLite, may seek approval for any of our new drug candidates
10. 28The Company faces substantial competition from companies with considerably more resources and experience than the Company has, which may result in others discovering, developing, receiving approval for, or commercializing products before or more successfully than the Company
11. 29The Company competes with a large number of well-established pharmaceutical companies that may have more resources than the Company does in developing therapeutics in the fields of CNS, oncology/hematology and ophthalmology

Risks Relating to Doing Business Outside the United States

1. 30The Company may be exposed to liabilities under the U.S. Foreign Corrupt Practices Act (“FCPA”) and Chinese anti-corruption law
2. 31International operations expose the Company to currency exchange and repatriation risks, and the Company cannot predict the effect of future exchange rate fluctuations on its business and operating results
3. 32We conduct our operations internationally and the effect of business, legal and political risks associated with international operations may seriously harm our business
4. 33A small number of licensees account for a substantial portion of the revenue we generate and the loss of one or more of these key licensees would negatively impact our revenue and cash flowNew
5. 34We do not have long-term license arrangements with any of our licensees and they can cancel their agreements at any time. A reduction in or termination of these license agreements from these licensees would negatively impact our revenue and cash flowNew

Risks Related to the Company’s Financial Condition

1. 35Our existing indebtedness may adversely affect our ability to obtain additional funds and may increase our vulnerability to economic or business downturns23% rewritten
2. 36Failure to remediate a material weakness in internal accounting controls could result in material misstatements in our financial statements
3. 37Our articles of incorporation allow for our board to create new series of preferred stock without further approval by our shareholders, which could adversely affect the rights of the holders of our Common Stock
4. 38We may not be able to secure financing needed for future operating needs on acceptable terms, or on any terms at all
5. 39Our internal computer systems, or those of our third-party contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product development programs
6. 40The elimination of personal liability against our directors and officers under Nevada law and the existence of indemnification rights held by our directors, officers and employees may result in substantial expenses

Risks Related to the Company’s Common Stock

1. 41The share price of our Common Stock is volatile and may be influenced by numerous factors, some of which are beyond our control
2. 42Insiders might have substantial influence over us, which could delay or prevent a change in our corporate control even if our other shareholders wanted it to occur45% rewritten
3. 43The market price of our Common Stock may be volatile and there may not be sufficient liquidity in the market for our securities in order for investors to sell their securities
4. 44We have never paid any cash dividends on our Common Stock and do not anticipate paying any cash dividends in the foreseeable future, and any return on investment may be limited to the value of our Common Stock. We plan to retain any future earnings to finance growth
5. 45If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and any trading volume could decline
6. 46Future sales and issuances of our Common Stock or rights to purchase Common Stock, including pursuant to our equity incentive plan or otherwise, could result in dilution of the percentage ownership of our shareholders and could cause our stock price to fall41% rewritten
7. 47Our Common Stock may be subject to the “penny stock” rules of the Securities and Exchange Commission, which may make it more difficult for shareholders to sell our Common Stock
8. 48Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of the Company’s Common Stock if and when such shares are eligible for sale and may cause a decline in the market value of its stock
9. 49Our failure to meet the continued listing requirements of the Nasdaq Capital Market could result in a delisting of our Common Stock24% rewritten
10. 50On May 13, 2025, the Company received a notification letter from Nasdaq notifying the Company that the Staff has determined that the Company has met the Bid Requirement and therefore the matter is closed. Accordingly, no reverse stock split is necessary at this timeNew
11. 51We will continue to incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance requirements as a result of our Common Stock being listed on the Nasdaq Capital Market