|12 Months Ended|
Dec. 31, 2019
|Subsequent Events [Abstract]|
NOTE 22 – SUBSEQUENT EVENTS
On February 5, 2020, the Company drew down $300,000 from its credit facility under that certain credit line agreement with Wenzhao Lu, a significant shareholder and director of the Company, which provides the Company with a $20 million line of credit. As a result of this draw down, the Company has approximately $17.1 million remaining available under the Line Credit. This draw down increased the total principal amount outstanding under the Credit Line to $2.9 million.
On December 13, 2019, we entered into an Open Market Sale AgreementSM (the "Sales Agreement") with Jefferies LLC, as sales agent ("Jefferies"), pursuant to which we may offer and sell, from time to time, through Jefferies, shares of our common stock, par value $0.0001 per share, having an aggregate offering price of up to $20.0 million. From January 1, 2020 to April 2, 2020, Jefferies sold an aggregate of 980,358 shares of common stock at an average price of $1.66 per share to investors. The Company received net cash proceeds of $1,549,265, net of cash fee paid for sales agent's commission and other offering expenses of $74,319.
On February 20, 2020, the Company entered into (i) a Letter Agreement with Dr. David Jin, Chief Executive Officer of the Company, pursuant to which the term of Dr. Jin's Executive Employment Agreement entered between the Company and Dr. Jin dated December 1, 2016 was extended an additional three years and granted Dr. Jin a Stock Option to acquire 400,000 shares of common stock at an exercise price of $1.52 per share for a period of ten years, (ii) a Letter Agreement with Meng Li, Chief Operating Officer of the Company, pursuant to which the term of Ms. Li's Executive Employment Agreement entered between the Company' subsidiary and Ms. Li dated January 11, 2017 was extended an additional three years and granted Ms. Li a Stock Option to acquire 300,000 shares of common stock at an exercise price of $1.52 per share for a period of ten years and (iii) a Letter Agreement with Luisa Ingargiola, Chief Financial Officer of the Company, granting Ms. Ingargiola a Stock Option to acquire 400,000 shares of common stock at an exercise price of $1.52 per share for a period of ten years.
On February 28, 2020, Beijing Genexosome signed an agreement to lease its office space under operating lease. Pursuant to the signed lease, monthly rent is RMB 833 (approximately $120) with a required security deposit of RMB 5,000 (approximately $700). The term of the lease is 13 months commencing on March 15, 2020 and expires on April 14, 2021 with one month of free rent. The total rent is RMB 10,000 (approximately $1,400) and paid in full in March 2020.
On February 24, 2020, Avalon Shanghai entered into a lease for office space in Beijing, China, with a third party (the "Beijing Office Lease"). Pursuant to the Beijing Office Lease, the monthly rent is RMB 50,586 (approximately $7,000) with a required security deposit of RMB 164,764 (approximately $24,000). In addition, Avalon Shanghai needs to pay monthly maintenance fees of RMB 4,336 (approximately $600). The term of the Beijing Office Lease is 12 months commencing on March 1, 2020 and expires on February 28, 2021.
On March 11, 2020, the World Health Organization declared the outbreak of the coronavirus (COVID-19) a pandemic. While the disruption is currently expected to be temporary, there is considerable uncertainty about its possible duration. As a result, significant economic uncertainties have arisen which are likely to negatively impact our tenants, employees and consultants. A return of recessionary conditions and/or other negative developments in the domestic or international credit markets or economies may significantly affect the markets in which we do business, and our ongoing operations, costs and profitability. These negative events may cause us to incur losses and may adversely affect our liquidity and financial condition. Other negative financial and operational impacts could occur although such potential impact is unknown and cannot be reasonably estimated at this time.
On April 1, 2020, the Company entered into a Subscription Agreement with WLM Limited ("WLM"), an entity owned by Wenzhao "Daniel" Lu, Chairman of the Board of Directors of the Company, pursuant to which WLM purchased 645,161 shares of the Company's common stock at a price per share of $1.55 for an aggregate purchase price of $1,000,000. The closing occurred on April 1, 2020.
During the first quarter of 2020, the Company issued a total of 222,577 shares of its common stock for services rendered and to be rendered. These shares were valued at $213,300, the fair market values on the grant dates using the reported closing share prices on the dates of grant and the Company recorded stock-based compensation expense of $156,093 for the quarter ended March 31, 2020 and recorded prepaid expense of $57,207 as of March 31, 2020 which will be amortized over the rest of corresponding service periods.
The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef