Business Context and Reporting Period
This Form 8-K is filed by American BriVision (Holding) Corporation (also referenced as ABVC Biopharma, Inc.) on March 12, 2018. The report addresses a non-reliance on previously issued financial statements for the quarters ended December 31, 2016, March 31, 2017, and June 30, 2017.
Key Financial Metrics
The filing does not provide current revenue, profit, cash flow, or debt metrics. Instead, it details a specific accounting correction regarding $160,000 in capital received from related parties:
- LionGene Corporation: $70,000 previously recorded as revenue.
- Rgene Corporation: $90,000 previously recorded as revenue.
- Correction: Both amounts are to be reclassified as additional paid-in capital.
Material Changes Versus Prior Period
The material change involves the restatement of the Company's consolidated financial statements for the three quarters mentioned above. The new independent auditor, KCCW Accountancy Corp., identified that transactions with LionGene and Rgene were related-party transactions under common control. Consequently, the revenue recognition for these transactions was deemed incorrect.
Guidance, Outlook, and Risks
Management Commentary: The Board of Directors determined on March 11, 2018, that the previously filed Quarterly Reports (Form 10-Q) should not be relied upon. The Company intends to file restated reports on or before March 16, 2018.
Risks and Contingencies: The primary risk is the reliability of historical financial data due to the misclassification of related-party capital as revenue. The filing notes the Company is working with professional advisors to resolve the restatement.
Investor Verification Checklist
- Verify the filing of the restated Form 10-Q reports by the March 16, 2018 deadline.
- Confirm the reclassification of the $160,000 from revenue to additional paid-in capital in the restated statements.
- Review the relationship disclosures between the Company, LionGene Corporation, Rgene Corporation, and YuanGene Corporation.
- Assess the impact of the revenue reduction on the Company's historical profitability and financial ratios.