Annual report pursuant to Section 13 and 15(d)

Equity Method Investment

v3.22.1
Equity Method Investment
12 Months Ended
Dec. 31, 2021
Equity Method Investments and Joint Ventures [Abstract]  
EQUITY METHOD INVESTMENT

NOTE 7 – EQUITY METHOD INVESTMENT

 

As of December 31, 2021 and 2020, the equity method investment amounted to $515,632 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 years ended December 31, 2021 and 2020, the Company’s share of Epicon’s net loss was $60,463 and $51,673, respectively, which was included in loss from equity method investment in the accompanying consolidated statements of operations and comprehensive loss.

 

In the years ended December 31, 2021 and 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, 2020   $ 483,101  
Payment made for equity method investment     57,972  
Epicon’s net loss attributable to the Company     (51,673 )
Foreign currency fluctuation     32,358  
Equity investment carrying amount at December 31, 2020     521,758  
Payment made for equity method investment     40,301  
Epicon’s net loss attributable to the Company     (60,463 )
Foreign currency fluctuation     14,036  
Equity investment carrying amount at December 31, 2021   $ 515,632  

 

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

 

    December 31,
2021
    December 31,
2020
 
Current assets   $ 5,479     $ 13,023  
Noncurrent assets     216,864       264,390  
Current liabilities     56,626       6,615  
Noncurrent liabilities    
-
     
-
 
Equity     165,717       270,798  

 

    For the Years
Ended
December 31,
 
    2021     2020  
Net revenue   $
-
    $
-
 
Gross profit    
-
     
-
 
Loss from operation     151,158       129,316  
Net loss     151,158       129,183