Quarterly report pursuant to Section 13 or 15(d)

Equity Method Investment

v3.21.1
Equity Method Investment
3 Months Ended
Mar. 31, 2021
Equity Method Investments and Joint Ventures [Abstract]  
EQUITY METHOD INVESTMENT

NOTE 5 – EQUITY METHOD INVESTMENT


As of March 31, 2021 and December 31, 2020, the equity method investment amounted to $532,199 and $521,758, 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 three months ended March 31, 2021 and 2020, the Company’s share of Epicon’s net loss was $18,514 and $9,084, respectively, which was included in loss from equity method investment in the accompanying condensed consolidated statements of operations and comprehensive loss.


In the three months ended March 31, 2021, activity recorded for the Company’s equity method investment in Epicon is summarized in the following table:


Equity investment carrying amount at January 1, 2021   $ 521,758  
Payment made for equity method investment     30,844  
Epicon's net loss attributable to the Company     (18,514 )
Foreign currency fluctuation     (1,889 )
Equity investment carrying amount at March 31, 2021   $ 532,199  

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


    March 31,
2021
    December 31,
2020
 
Current assets   $ 13,071     $ 13,023  
Noncurrent assets     255,884       264,390  
Current liabilities     14,351       6,615  
Noncurrent liabilities     -       -  
Equity     254,604       270,798  

    For the Three Months
Ended March 31,
 
    2021     2020  
Net revenue   $ -     $ -  
Gross profit   -     -  
Loss from operation     46,286       22,711  
Net loss     46,286       22,711