Annual report pursuant to Section 13 and 15(d)

Equity Method Investment

v3.20.1
Equity Method Investment
12 Months Ended
Dec. 31, 2019
Equity Method Investments and Joint Ventures [Abstract]  
EQUITY METHOD INVESTMENT

NOTE 8 – EQUITY METHOD INVESTMENT

 

As of December 31, 2019 and 2018, the equity method investment amounted to $483,101 and $385,162, respectively. The investment represents the Company's subsidiary, Avalon Shanghai's interest in Epicon Biotech Co., Ltd. ("Epicon"). Epicon was incorporated on August 14, 2018 in PRC. Avalon Shanghai and the other unrelated company, Jiangsu Unicorn Biological Technology Co., Ltd. ("Unicorn"), accounted for 40% and 60% of the total ownership, respectively. Epicon is focused on cell preparation, third party testing, biological sample repository for commercial and scientific research purposes and the clinical transformation of scientific achievements.

 

The Company treats the equity investment in the consolidated financial statements under the equity method. Under the equity method, the investment is initially recorded at cost, adjusted for any excess of the Company's share of the incorporated-date fair values of the investee's identifiable net assets over the cost of the investment (if any). Thereafter, the investment is adjusted for the post incorporation change in the Company's share of the investee's net assets and any impairment loss relating to the investment.

 

For the year ended December 31, 2019 and for the period from August 14, 2018 (inception) through December 31, 2018, the Company's share of Epicon's net loss was $55,776 and $52,969, respectively, which was included in loss from equity-method investment in the accompanying consolidated statements of operations and comprehensive loss.

 

Activity recorded for the Company's equity method investment in Epicon is summarized in the following table:

 

Equity investment carrying amount at January 1, 2018   $ -  
Payment made for equity method investment     453,159  
Epicon's net loss attributable to the Company     (52,969 )
Foreign currency fluctuation     (15,028 )
Equity investment carrying amount at December 31, 2018     385,162  
Payment made for equity method investment     159,192  
Epicon's net loss attributable to the Company     (55,776 )
Foreign currency fluctuation     (5,477 )
Equity investment carrying amount at December 31, 2019   $ 483,101  

 

The tables below present the summarized financial information, as provided to the Company by the investee, for the unconsolidated company:

 

    December 31, 2019     December 31, 2018  
Current assets   $ 77,272     $ 301,714  
Noncurrent assets     247,590       7,015  
Current liabilities     324       38  
Noncurrent liabilities     -       -  
Equity     324,538       308,691  

 

    For the Year Ended December 31, 2019     For the Period from August 14, 2018 (Inception) through December 31, 2018  
Net revenue   $ -     $ -  
Gross profit     -       -  
Loss from operation     139,439       132,423  
Net loss     139,439       132,423